The Investigation into Determinants of Regional Exports Base: Panel Analysis for Spanish and Polish Regions

Objective: We use the small open economy concept to identify the determinants of region’s exports at a NUTS-2 level for Poland and Spain over the period 2005-2015. Research Design Methods: We apply the Prais-Winsten method for Panel Corrected Standard Errors (PCSE) on a data panel allowing for heteroskedasticity and autocorrelation estimating a model of regional exports for a joint sample of Polish and Spanish NUTS-2 regions. Findings: We identify a number of factors which statistically significantly determine exports arising from Polish and Spanish regions. These factors are classified into the following main groups: factor conditions, FDI, infrastructure, market conditions, remoteness and geography, spatial agglomeration and technological knowledge base. Implications Recommendations: By going beyond national trade statistics, we provide evidence which can be used at the regional level to increase participation of regions in the world economy. Political decisions which are taken at the regional level seem to matter. Contribution Value Added: This paper combines scientific knowledge from several perspectives: international economics and international business, as well as regional science. We believe that an interdisciplinary approach is necessary to increase the knowledge which goes beyond nations, while not focusing on firms, as units of analysis.