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Growth, Integration, and Regional Disparities in the European Union

Author

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  • George Petrakos

    (Department of Planning and Regional Development, University of Thessaly, Pedion Areos, 38334 Volos, Greece)

  • Andrés Rodríguez-Pose

    (Department of Geography and Environment, London School of Economics, Houghton Street, London WC2A 2AE, England)

  • Antonis Rovolis

    (Department of Geography, Harokopio University, El Venizelou 70, 17671 Athens, Greece)

Abstract

In this paper we challenge the ability of the conventional methods initiated by Barro and Sala-i-Martin in the early 1990s to detect actual convergence or divergence trends across countries or regions and suggest an alternative dynamic framework of analysis, which allows for a better understanding of the forces in operation. With the use of a SURE model and time-series data for eight European Union (EU) member states, we test directly for the validity of two competing hypotheses: the neoclassical (NC) convergence hypothesis originating in the work of Solow and the cumulative causation hypothesis stemming from Myrdal's theories. We also account for changes in the external environment, such as the role of European integration on the level of regional disparities. Our findings indicate that both short-term divergence and long-term convergence processes coexist. Regional disparities are reported to follow a procyclical pattern, as dynamic and developed regions grow faster in periods of expansion and slower in periods of recession. At the same time, significant spread effects are also in operation, partly offsetting the cumulative impact of growth on space. Similar results are obtained from the estimation of an intra-EU model of disparities at the national level, indicating that the forces in operation are independent of the level of aggregation. Our findings challenge the view of economic growth as the main driver for a reduction of regional disparities and contribute to the growing scientific evidence that points towards the need to rethink current EU-wide regional development policies.

Suggested Citation

  • George Petrakos & Andrés Rodríguez-Pose & Antonis Rovolis, 2005. "Growth, Integration, and Regional Disparities in the European Union," Environment and Planning A, , vol. 37(10), pages 1837-1855, October.
    • Handle: RePEc:sae:envira:v:37:y:2005:i:10:p:1837-1855
    DOI: 10.1068/a37348
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    References listed on IDEAS

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    Cited by:

    1. Panagiotis Artelaris, 2021. "Regional economic growth and inequality in Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 141-158, February.
    2. Stefania Oppido & Stefania Ragozino & Gabriella Esposito De Vita, 2023. "Peripheral, Marginal, or Non-Core Areas? Setting the Context to Deal with Territorial Inequalities through a Systematic Literature Review," Sustainability, MDPI, vol. 15(13), pages 1-36, July.
    3. Hans Kramar, 2016. "Regional convergence and economic development in the EU: the relation between national growth and regional disparities within the old and the new member states," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 6(1), pages 1052-1052.
    4. Manolis Christofakis & Athanasios Papadaskalopoulos, 2011. "Cohesion policy and regional disparities: The recent experience of Greece," Local Economy, London South Bank University, vol. 26(6-7), pages 517-531, September.
    5. Arvanitidis Paschalis & Kollias Christos, 2016. "Converging Defence Burdens? Some Further Findings," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(4), pages 365-375, December.
    6. Kyriacou, Andreas & Morral-Palacín, Noemí, 2015. "Secessionism and the Quality of Government: Evidence from a Sample of OECD Countries," MPRA Paper 116307, University Library of Munich, Germany.
    7. Panagiotis Artelaris & George Petrakos, 2016. "Intraregional Spatial Inequalities and Regional Income Level in the European Union," International Regional Science Review, , vol. 39(3), pages 291-317, July.
    8. Riccardo Crescenzi & George Petrakos, 2016. "The European Union and its neighboring countries: The economic geography of trade, Foreign Direct Investment and development," Environment and Planning C, , vol. 34(4), pages 581-591, June.

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