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Integration and Convergence in Regional Europe: European Regional Trade Flows from 2000 to 2010

Author

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  • Mark Thissen

    ()

  • Frank Van Oort
  • Dario Diodato

Abstract

International regional competitiveness developed recently into smart, sustainable and inclusive growth objectives of the Europe 2020 policy programme, as envisioned for the cohesion policy reform after 2013 (EC, 2004). Currently, place-based development policies are proposed for future cohesion policy (Barca, 2009) and have taken the shape of smart specialisation strategies. These strategies are based on a systems way of thinking about innovation and growth (McCann and Ortega-Argilés, 2011) and they place a large emphasis on regional network data and analysis. However, crucial economic data on trade between regions are noticeably missing from European regional databases. This paper, therefore, proposes a new methodology to determine interregional trade and present a unique data set on trade between 256 European NUTS2 regions, for the year 2000. The methodology stays close to a parameter-free approach as proposed by Simini et al. (2012), and deviates therefore from earlier methods based on the gravity model that suffer from analytical inconsistencies. Unlike a gravity model estimation, our methodology stays as close as possible to observed data without imposing any geographical trade patterns. The resulting data can therefore be used as such in other research. We also perform an update of the dataset over the period 2000-2010. In our finding, most trade takes place within one and the same region, although there are large sectoral differences. The data shows that globalisation in trade is still limited with only a very small percentage of goods and services being traded with countries outside Europe. The European regional economy is therefore strongly interconnected, which is part of the explanation of the strong regional spillovers of the present economic crisis in Europe. Opposite to earlier findings (Combes and Overmand, 2004), we show that all eastern European regions catch-up to the rest of the European regions and not only the main economic eastern European centers. We do confirm a faster catch-up in these main economic centres. The banking crisis in 2008 showed a significant decline in trade of European regions with countries outside Europe with a strong recovery immediately afterwards. Trade of European regions with European regions from other countries stayed however permanently at a lower level showing the persistence of the crisis.

Suggested Citation

  • Mark Thissen & Frank Van Oort & Dario Diodato, 2013. "Integration and Convergence in Regional Europe: European Regional Trade Flows from 2000 to 2010," ERSA conference papers ersa13p1116, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa13p1116
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    File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa13/ERSA2013_paper_01116.pdf
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    References listed on IDEAS

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    1. Jan Oosterhaven & Dirk Stelder & Satoshi Inomata, 2008. "Estimating International Interindustry Linkages: Non-survey Simulations of the Asian-Pacific Economy," Economic Systems Research, Taylor & Francis Journals, vol. 20(4), pages 395-414.
    2. Fabrizio Barca & Philip McCann & Andrés Rodríguez‐Pose, 2012. "The Case For Regional Development Intervention: Place‐Based Versus Place‐Neutral Approaches," Journal of Regional Science, Wiley Blackwell, vol. 52(1), pages 134-152, February.
    3. Tobias Kronenberg, 2009. "Construction of Regional Input-Output Tables Using Nonsurvey Methods," International Regional Science Review, , vol. 32(1), pages 40-64, January.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
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    Citations

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    Cited by:

    1. Andries Brandsma & D'Artis Kancs, 2015. "RHOMOLO: A Dynamic General Equilibrium Modelling Approach to the Evaluation of the European Union's R&D Policies," Regional Studies, Taylor & Francis Journals, vol. 49(8), pages 1340-1359, August.
    2. Andries Brandsma & d'Artis Kancs & Philippe Monfort & Alexandra Rillaers, 2015. "RHOMOLO: A dynamic spatial general equilibrium model for assessing the impact of cohesion policy," Papers in Regional Science, Wiley Blackwell, vol. 94, pages 197-221, November.
    3. Christoph Hammer & Aurélien Fichet de Clairfontaine, 2016. "Trade Costs and Income in European Regions," Department of Economics Working Papers wuwp220, Vienna University of Economics and Business, Department of Economics.
    4. Jean Mercenier & Maria Teresa Alvarez Martinez & Andries Brandsma & Francesco Di Comite & Olga Diukanova & d'Artis Kancs & Patrizio Lecca & Montserrat Lopez-Cobo & Philippe Monfort & Damiaan Persyn & , 2016. "RHOMOLO-v2 Model Description: A spatial computable general equilibrium model for EU regions and sectors," JRC Working Papers JRC100011, Joint Research Centre (Seville site).
    5. Brandsma, Andries & Di Comite, Francesco & Diukanova, Olga & Kancs, d’Artis & López-Rodríguez, Jesús & Persyn, Damiaan & Potters, Lesley, 2014. "Assessing policy options for the EU Cohesion Policy 2014-2020," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 17-46.
    6. Baltagi, Badi H. & Fingleton, Bernard & Pirotte, Alain, 2018. "A Time-Space Dynamic Panel Data Model with Spatial Moving Average Errors," MPRA Paper 86371, University Library of Munich, Germany.
    7. Randall Jackson & Christa Court, 2015. "Toward Consistent Cross-Hauling Estimation for Input-Output Regionalization," Working Papers Working Paper 2015-01, Regional Research Institute, West Virginia University.
    8. Márquez-Ramos , Laura, 2016. "Regionalism, subnational variation and gravity: A four-country tale," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 35, pages 7-36.
    9. Baltagi, Badi H. & Fingleton, Bernard & Pirotte, Alain, 2018. "A Time-Space Dynamic Panel Data Model with Spatial Moving Average Errors," IZA Discussion Papers 11587, Institute for the Study of Labor (IZA).

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