Are cities the real engines of growth in the EU?

Between 2001 and 2021, capital metro regions had the fastest productivity growth in the EU, followed by non-metro regions, while it was much lower in other metro regions. Capitals reduced their sectoral concentration, while the other regions increased it. Our shift-share analysis confirms that capitals relied entirely on productivity growth within sectors, while the other two types benefitted also from shifting jobs to more productive sectors. Our regression analysis showed that convergence and being a capital boosted productivity growth. Population density also strengthened productivity growth, but not enough to prevent other-metro regions from lagging behind the non-metro regions.