This paper analyses the level of relative specialisation in terms of gross fixed capital formation in EU regions for the period between 1985 and 1994. Controlling for heteroscedasticity and potential endogeneity problems, we get consistent econometric results. Larger market and regional sizes diminish relative investment specialisation while a higher unemployment rate, population density, the fact of being a central region, the distance to the economic centre, and economic liberalisation increase its level. The variation of the specialisation level of one region over time, however, cannot be explained econometrically, it thus might underlie random disturbances. --
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number
02-36.
Find related papers by JEL classification: F15 - International Economics - - Trade - - - Economic Integration F2 - International Economics - - International Factor Movements and International Business C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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