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Does distance matter for determining regional income in the European Union? An approach through the market potential concept

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  • Jesus Lopez-Rodriguez
  • J. Andres Faina

Abstract

This paper focuses on the relationship between market potential and income for the European Union (EU) regions over the period 1982-1999. It is proved that closeness to large consumer markets or in other words, market potential, is an important explanatory variable for regional income in the early 1980s, but it has decreased its significance in determining EU regions income in the 1990s. Thus dynamic income regions have also emerged in the EU periphery, and need not necessarily be close to rich regions.

Suggested Citation

  • Jesus Lopez-Rodriguez & J. Andres Faina, 2006. "Does distance matter for determining regional income in the European Union? An approach through the market potential concept," Applied Economics Letters, Taylor & Francis Journals, vol. 13(6), pages 385-390.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:6:p:385-390
    DOI: 10.1080/13504850600650073
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    References listed on IDEAS

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    1. Redding, Stephen & Venables, Anthony J., 2004. "Economic geography and international inequality," Journal of International Economics, Elsevier, vol. 62(1), pages 53-82, January.
    2. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    3. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
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    Cited by:

    1. Hering, Laura & Poncet, Sandra, 2009. "The impact of economic geography on wages: Disentangling the channels of influence," China Economic Review, Elsevier, vol. 20(1), pages 1-14, March.

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