1. Territorial capital: theory, empirics and critical remarks Tóth Balázs István Assistant Lecturer, PhD candidate University of West Hungary Faculty of Economics Annual Meeting of Hungarian Regional Science Association Kaposvár, 21-22 November 2013

2. Introduction: some ‘preconditions’ of TC Why has the concept of TC become remarkable in recent years? – Increasing complexity of world economy, intensification of globalization – Appreciation of local values, endogenous resources (territorial assets), endogenous growth and path-dependency – Fragile and unequal development (especially in the EU) – Criticism of the cohesion policy of the European Union – Changing concepts of ‘sustainability’ – Diversified ideologies of regional science: Need for a new interpretation and explanation of regional development Shift from hard and technical analyses to soft, speculative and critical examinations Resurgence of supply-oriented approaches

3. Finka Zonne- veld- Waterhout Waterhout Camagni The ‘evolution’ of TC 199920012005201020112013201220092008 OECD Territorial Outlook LEADER EO Camagni, R. Regional Competitiveness: Towards a Concept of Territorial Capital Basic theory and model Empirical investigations Application of the concept Empirics (empirics+theory) Affuso- Camagni Capello et al. Veneri Camagni et al. Brasili Pompili- Martinoia Casi- Resmini Caragliu- Nijkamp Brasili et al. Percucca Tóth Camagni- Capello Attractiveness Servillo et al. ATTREG Atkinson Rural development V. Berkel- Verburg Copus et al. Ventura et al. Coutney et al. Kunzmann Giffinger- Suitner Territorial governance 2007 Regional growth, territorial competitiveness Territorial cohesion Giffinger Camagni- Capello Davoudi et al. Giffinger- Hame- dinger Rota Marsh Capello Sarmiento- Mirwardt Zonne- veld- Waterhout ONLY CONCEPTUALISATION European Commission Tóth Source: own construction Giffinger- Hame- dinger

4. Main types of capital in some ‘capital frameworks’: a comparison Built capital Cognitive capital Creative capital Cultural capital Economic capital Entrepreneurial capital Environmental capital Financial capital Human capital Infrastructural capital Institutional capital Natural capital Physical capital Political capital Produced capital Relational capital Settlement capital Social capital Symbolic capital Types of capital in publications not relating to the concept of TC Kitson et al. (2004) XXXXXX Emery–Flora (2006) XXXXXXX Agarwal et al. (2009) XXXXX Stimson et al. (2011) XXXXX Carayannis et al. (2012) XXXXX Types of capital in publications relating to the concept of TC Camagni (2008) XXX Affuso–Camagni (2010) XXXXX Ventura et al. (2010) XXXXXX X Brasili (2011) XXXXX Brasili et al. (2012) XXXXXXXX Mazzola et al. (2012) XXXXXXXX Servillo et al. (2012); Atkinson (2013) XXXXXXX Tóth (2011) XXXXXXXXX X Source: own construction

5. Measuring TC: a comparison Applied method(s)Case studyPeriodDimensions of territorial capital Affuso–Camagni (2010) MASST-model (econometric model) Provinces of ‘Latin Arc’ Long term approach Infrastructural capital, settlement structure, sectoral and natural specificities, social and relational capital Brasili (2011) Principal component analysis 118 cities of the EU 2006-2007 Productive capital, cognitive capital, environmental capital, infrastructural capital, settlement capital Camagni et al. (2011) Descriptive analysis Cluster analysis Analysis of variance Spatial autocorrelation Italian provinces (NUTS 3) 2006 (most of the data) Relational capital, human capital Pompili–Martinoia (2011) Factor analysis Cluster analysis Italian provinces (NUTS 3) Long term approach Cultural capital, natural capital, human capital, economic performance, tourism, labour Veneri (2011) Principal component analysis Italian provinces (NUTS 3) 2001 (most of the data) Social capital, socio-cultural identity, spatial organization of activities and governance Brasili et al. (2012) Standardizing Indexing Italian provinces (NUTS 3) 2002-2004, 2009 Productive capital, cognitive capital, social capital, relational capital, environmental capital, human capital, settlement capital, infrastructural capital Mazzola et al. (2012) Descriptive analysis Panel with fixed and random effects Italian provinces (NUTS 3) 1999-2011 Social capital, natural capital, physichal capital, human capital, institutional-relational capital, entrepreneurial- relational capital, cognitive capital, public-private capital Camagni–Capello (2013) MASST-model (econometric model) 259 regions of the EU (NUTS 2) 2015 (forecast, scenario) Entrepreneurship, creativity, social overhead capital, receptivity Perucca (2013) Principal component analysis Analysis of variance Multiple lin. regression Italian provinces (NUTS 3) 1999-2008 Public capital, attractiveness, private capital, social capital, human capital, relational capital Tóth (2011; 2013a) Factor analysis Cluster analysis Hungarian medium-sized cities 2009; 2010 Profit, added value and income, natural and built environment, supply and services, education and community culture, social features, attractiveness Tóth (2013b) Discriminant analysis Hungarian sub- regions (LAU 1) 2006-2011 Economic capital, natural capital, built capital, human capital, cultural capital, social capital Source: own construction

6. Measuring TC: a comparison Indicators relating to… Affuso– Camagni (2010) Brasili (2011) Camagni et al. (2011) Pompili– Martinoia (2011) Veneri (2011) Brasili et al. (2012) Mazzola et al. (2012) Camagni – Capello (2013) Perucca (2013) Tóth (2011, 2013a) Tóth (2013b) … bank sector XX … business environment, entrepreneurship XXXXX … community culture XXXXXXX … crimes XXXXX … education, knowledge, creativity XXXXXXXX … employment XXXXXXXXX … foreign trade, export and import XXXX … income, capital stock XXXX … infrastructure XXXXXX … migration XXX … natural environment, environmental protection XXXXX … number of population, population density XXX … patent applications XXXXXX … public institutions XXX … (public) transport XXXX … receptivity X … research and development X … social conditions, social features XXX … supply and services XX … tourism XXXXX … voluntary activity XXXXXXX Source: own construction

7. Hajdúböszörmény Törökszentmiklós Makó Békés Orosháza Hajdúszoboszló Jászberény Baja Keszthely Kiskunfélegyháza Nagykőrös Kiskunhalas Szentes Gödöllő Szentendre Mosonmagyaróvár Pápa Ajka Salgótarján Esztergom Hatvan Vác Tata Nagykanizsa Várpalota Gyöngyös Hódmezővásárhely Karcag Siófok Gyula Cegléd Dunaújváros Tatabánya Komló Ózd Kazincbarcika Dunakeszi Érd Vecsés Gyál Szigetszentmiklós Dunaharaszti Budaörs Sopron Szombathely Békéscsaba Kaposvár Szekszárd Szolnok Zalaegerszeg Veszprém Eger Hubs of significant territorial capital (7) Medium-sized cities with considerable territorial capital (5) Medium-sized cities with considerable capacity in tangible assets and with moderate capacity in intangible assets (6) Medium-sized cities with average (moderate) territorial capital (29) Developing or territorial capital- deficient medium- sized cities (5) Types of Hungarian medium-sized cities based on territorial capital Source: own calculations

8. Built capital – Human capital + Built capital + Human capital – Economic capital – Cultural capital – Economic capital + Cultural capital + Function 2 Function 1 1 2 3 Centroid Sub-regions of lower permanent domestic emigrations Sub-regions of higher permanent domestic emigrations Sub-regions of permanent domestic immigrations FunctionsFunction 1 Function 2 Structure matrix 1. Economic capital I. (private fixed capital) 0,807 (0,000)* 2. Economic capital II. (income, tax) 0,749 (0,000)* 3. Cultural capital (community culture) 0,235 (0,037)* 4. Built capital (accessibility, institutions) 0,801 (0,000)* 5. Human capital (education, patents) 0,462 (0,027)* 6. Natural capital (green public spaces) -0,203 (0,334)** 7. Social capital (crimes, poverty, aid) -0,123 (0,813)** Eigenvalue 0,6750,156 % of Variance 81,3%18,7% Canonical correlation 0,6350,367 Wilks’ Lambda 0,5170,865 Chi-square; df; Sig. 110,994; 14; 0,000 24,291; 6; 0,000 Attractiveness of Hungarian sub-regions based on some dimensions of territorial capital Source: own calculations

9. Some critical remarks It is still unclear whether there is a common understanding of TC: – Since OECD (2001) no additional definitions were published – There are problems with the OECD definition: is it a real definition or a list of territorial assets? TC is not adequate for many criteria of ’capital’: – TC is rather not ’capital’ according to e.g. Elster (1997), Adler-Kwon (1999), Arrow (1999), Solow (1999), Robison et al. (2002) Not every component of TC is appropriate for statistical analyses: – There is no consensus which dimensions of TC should be measured – There are great differences concerning the applied methods, the indicators and case studies – Is it a static or a dynamic phenomenon?

10. Some critical remarks It is still unclear whether there are relations between TC and some other terms used in regional economics / regional (local) economic development: – Competitive advantages, regional specialization, regional development, territorial competitiveness, location factors, economies of scale, intelligent specialisation etc. ‘Territorial capital paradigm’  fundamental research problem: – TC is a new paradigm following the basic meaning of Oxford English Dictionary – TC is not a paradigm following T. Kuhn’s definition (1970) on paradigm – In stead of ‘paradigm’: ‘change in style’ (Hacking 1985), ‘change in the discipline’s core model of reality’ (Lakatos 1978), ‘evolutionary process’ (Popper 1972), ‘self correcting process’ (Sagan 2002) etc. may be more appropriate

11. Some critical remarks TC concept is still missing from local economic development strategies: – All strategies identify the characteristics of regions well, but do not include them in the development of vision (Banski 2013):  There is a need not only for TC diagnosis, but for TC synthesis as well  Exploration and analysis + formulating vision + defining goals are based on TC

12. Conclusions and proposals The concept of TC is of great importance but has not been researched in the necessary depth yet Further scientific research needs to be completed: – Through the concept of TC scientists may get a better picture in relation of the main ideologies and theories in economics and in regional science: TC provides an appropriate analytical framework to study regional economic processes – TC may be appropriate to explain territorial development more precisely: scientists are able to systemize the endogenous factors of territorial development more accurately The approach of territorial capital can widen the visions of territorial development policies, providing new techniques and methods for strengthening territorial competitiveness in Central and South East Europe, also in Hungary

13. Thank you for your attention! tothbalazsistvan@ktk.nyme.hu