Patrick Möbius, Wilhelm Althammer

• This paper argues for a productivity-based view on competitiveness considering sustainability aspects. A novel composite index of sustainable competitiveness for 272 European NUTS-2 regions in 28 countries is established. Principal component factor analysis and a structural equation model are utilized to identify the drivers of sustainable competitiveness, to explore the relationships between the different components, and to determine the indicator weighting and aggregation. Thereby, five mutual interdependent drivers are identified: social and ecological fundamentals, micro and macroeconomic competitiveness, and intermediate outputs. The index reveals important insight for policy makers into the sustainable competitiveness trajectory of European regions.