IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

The Portuguese Economic Divergence with European Union: A Call for Corporate Strategy in Light of New Economic Geography Principles

Listed author(s):

New Economic Geography (NEG), a new branch of Spatial Economics that was developed at the beginning of the 90s, supports that “peripheral” European Union’s economies (like Portugal, Greece, Ireland or even Spain) are predestined to diverge from the developed European “centers” like France or Germany. This new field of Economics seems to be supporting the incapacity of European structural policies to battle against this divergence trend, and ultimately an inevitable catastrophe of the Single European Currency, and thus, of the European integration project as a whole. The recent evolution of the main EU’s peripheral economies(e.g. Greece, Portugal and Ireland) confirming their divergence trend from the developed core EU’s countries, seems to support these NEG forecasts. However, in our paper we support that, taking into consideration some identified pitfalls of NEG’s principles, and on the other hand, considering the potentialities that may arise from the capacity of enterprises to put in place effective Corporate Strategies (which its related with the need to develop their strategic capabilities), peripheral countries/regions may be able to overcome this apparent fatalness. Thus, more important than just funding is the aptitude of these peripheral economies – through their economic agents’ capabilities – to use these funding and profit from them adequately. This will lead us to support, not just the continuation of the European structural funds’ policies, with the positive impacts arising from the inherent redistribution effects, but also to conclude on the urgent need to develop strategic capabilities of main economic agents of these regions. Using an empirical survey, performed during the transition period of the introduction of the Euro (1999-2001), to companies operating in Portugal, we conclude by demonstrating that the lack of corporate strategic capabilities may well be an important explanation for the present difficult economic situation, explaining most of the existing problems of Portugal and that, only through a real change in the prevailing paradigm, regarding the action of these companies, we may be able in a near future to sustainably overcome the present difficulties.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
File Function: Full text
Download Restriction: no

Paper provided by CIEO-Research Centre for Spatial and Organizational Dynamics, University of Algarve in its series Spatial and Organizational Dynamics Discussion Papers with number 2011-1.

in new window

Length: 16 pages
Date of creation: 31 Mar 2011
Handle: RePEc:ris:cieodp:2011_001
Contact details of provider: Postal:
University of Algarve, Faculty of Economics, Campus de Gambelas, 8005-139 Faro, Portugal, email of President of the Centre:

Phone: +351 289 244 406
Fax: 351-289-818303
Web page:

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

in new window

  1. Paul Krugman, 1999. "The Role of Geography in Development," International Regional Science Review, , vol. 22(2), pages 142-161, August.
  2. Philippe Martin, 1999. "Are European regional policies delivering?," Sciences Po publications info:hdl:2441/9343, Sciences Po.
  3. Findlay, Ronald, 1996. "Modeling Global Interdependence: Centers, Peripheries, and Frontiers," American Economic Review, American Economic Association, vol. 86(2), pages 47-51, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ris:cieodp:2011_001. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Silvia Fernandes)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.