Transnational economic clusters: The case of the Iberian Peninsula

Spain and Portugal are two neighbouring countries, sharing regions with specific socio‐economic challenges. These challenges arise now as promising sources of regional co‐operation, namely in supporting the design of more tailored regional policies. In this context, the main aim of this paper is to discuss how neighbouring spaces within the Iberian Peninsula can be identified as sources for positive economic effects on the surrounding area. For this purpose, we will use Eurostat regional data, taking advantage of spatial autocorrelation analysis. Based on the developments related to Verdoorn's law, we explored the spatial approach for studying the latent correlations between the Iberian regions, in terms of local production. The results show that there are several Iberian contexts of economic success that can be considered as benchmarks for other regions. We also posit that policies' frameworks between neighbouring regions should be enhanced. These findings are relevant outputs to be considered by public institutions in the design of regional policies that promote more regional co‐operation and support spreading effects from poles of development to neighbouring regions (reduction asymmetries).