Institutional adaptability: its relevance for enhancing resilience and smart specialization capacity of the European Union’s lagging regions

After the 2008 financial crisis, institutional adaptability and economic diversification through smart specialization have been considered key forces for attaining an effective resilience trajectory of regional economies. Successful policy responses should not capture only limited, conjunctural and transitory measures, but should rather promote pro-active capabilities, able to cope with spatial perturbations and related drastic transformations, thus generating a more efficient regional development pattern. In this process, the economic and institutional factors, the conditions under which changes occur, as well as the actors of change play a pivotal role. The paper traces whether institutional arrangements have a decisive impact on the recovery of the European Union’s lagging regions after the economic crisis and whether these could be instrumental in developing a smart specialization potential, which could make regions even more capable to enhance strong adaptive mechanisms. Using a mix of econometric methods (e.g. panel analysis, logistic regression) to emphasize both institutional and smart specialization aspects in the European Union core-periphery differentiation, the present study is based on a multidisciplinary approach. The results highlight that the existence of smart specialization capacity is associated with higher institutional adaptability; they also distinguish between relevant resilience characteristics of the European regions and formulate appropriate response policies for strengthening their specialization potential.