Extending the regional HERMIN model by adding components of territorial cohesion

Every region functions in its specific interregional environment. Through the structure of socio-economic connections, regions affect each other. Hence, territorial cohesion of an individual voivodship – viewed as a territorial optimum- is determined by what is going on in other regions (e.g. their economic structure, technological progress, changes in aggregated demand and supply, crisis resilience, etc.). The scale of this determination depends upon interregional connections. Due to lack of data we concentrate only on interregional trade flows and take into account two variations of determination of the trade structure: based on a “potential” criterion and on an “accessibility” criterion. In this paper we analyse how structural changes as well as Cohesion Policy interventions affect the development of Polish NUTS-2 regions through the network of interregional trade flows. With the novel system of interrelated HERMIN regional models we try to face that challenge by taking into account economic specifics of all the 16 voivodships. This, in turn, allows us to draw several conclusions concerning territorialisation of development policies which might be carried over to the real policy making process.