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From convergence to divergence? Some new insights into the evolution of the European Union

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  • Bolea, Lucía
  • Duarte, Rosa
  • Chóliz, Julio Sánchez

Abstract

The promotion of economic, social, and territorial cohesion has been one of the main pillars of the construction of the European Union. This general principle has been manifest in the objectives of achieving a higher level of economic convergence, territorial competitiveness, and fostering employment creation in EU countries. The recent economic crisis has implied profound changes, not only in the path of growth but also in the structural and technological characteristics of EU countries, with these elements highly conditioning their inter-dependencies, economic outcomes, and convergence. This paper analyzes the role that the evolution of economic structures has played in the evolution of recent convergence in Europe expanding the traditional measures of economic convergence extended to a multi-regional input-output framework. Our study shows a trend towards convergence among EU countries and a significant breakpoint with the arrival of the economic crisis in 2008. Moreover, we observe a continuous change in the role of different components, raising the participation of trade (intra and extra European trade) in income for most of the countries and sectors analyzed. In addition, the different behavior of services, in particular, knowledge intensive services in the EU countries notably condition income generation in countries. Nevertheless, our results show that despite services economy explains significantly income growth in Europe over the period 2000–2014, income growth in Eastern Europe countries has notably relied on the positive reliance of manufacturing sectors (particularly medium and low technology sectors), and the expansion of conventional services, with a lower representativeness of the knowledge intensive sectors. Domestic and intra-EU markets are dominant, although also with an increasing share of extra-EU exports. The opposite can be said for central EU economies, which a smoother evolution over the period but a clear dominance of the knowledge intensive services and, in some cases, the high and medium-high technology industry.

Suggested Citation

  • Bolea, Lucía & Duarte, Rosa & Chóliz, Julio Sánchez, 2018. "From convergence to divergence? Some new insights into the evolution of the European Union," Structural Change and Economic Dynamics, Elsevier, vol. 47(C), pages 82-95.
    • Handle: RePEc:eee:streco:v:47:y:2018:i:c:p:82-95
    DOI: 10.1016/j.strueco.2018.07.006
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    2. Ignatov Augustin, 2019. "Institutional Efficiency, Entrepreneurship, and the Premises of Economic Development in the Eastern European Countries," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 64(2), pages 12-32, August.
    3. Łukasz Markowski & Kamil Kotliński & Aleksandra Ostrowska, 2023. "Sustainable Consumption and Production in the European Union—An Attempt to Assess Changes and Convergence from the Perspective of Central and Eastern European Countries," Sustainability, MDPI, vol. 15(23), pages 1-23, December.
    4. Lichner, Ivan & Lyócsa, Štefan & Výrostová, Eva, 2022. "Nominal and discretionary household income convergence: The effect of a crisis in a small open economy," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 18-31.
    5. Rosik, Piotr & Pomianowski, Wojciech & Komornicki, Tomasz & Goliszek, Sławomir & Szejgiec-Kolenda, Barbara & Duma, Patryk, 2020. "Regional dispersion of potential accessibility quotient at the intra-European and intranational level. Core-periphery pattern, discontinuity belts and distance decay tornado effect," Journal of Transport Geography, Elsevier, vol. 82(C).
    6. Desli, E. & Gkoulgkoutsika, A., 2020. "World economic convergence: Does the estimation methodology matter?," Economic Modelling, Elsevier, vol. 91(C), pages 138-147.
    7. Bolea, Lucía & Duarte, Rosa & Hewings, Geoffrey J.D. & Sánchez-Chóliz, Julio, 2021. "Disintegration scenarios in the European Union: A case study of Eastern European economies," Economic Modelling, Elsevier, vol. 95(C), pages 1-12.
    8. Domínguez, Alvaro & Santos-Marquez, Felipe & Mendez, Carlos, 2021. "Sectoral productivity convergence, input-output structure and network communities in Japan," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 582-599.
    9. Martínez-García Miguel Á. & Cámara Ángeles, 2022. "Impact of an Economic Crisis on Youth Employment: Evidence from 2008 Financial Crisis in Spain," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 16(1), pages 276-287, January.

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