Article thumbnail

Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary

By Anna Iara and Iulia Traistaru

Abstract

This paper investigates the impact of market integration on regional production structures and regional growth differentials in Hungary over the period 1994-2000. Our analysis indicates a relocation of manufacturing towards border regions, in particular towards regions bordering the European Union. On average, regional manufacturing specialization increased. We find a positive relationship between knowledge spillovers proxyed with a measure of foreign direct investment intensity and regional growth as well as between regional manufacturing specialization and regional growth. The change in regional specialization is also positively related to regional growth. Our empirical results show that on average, other things equal, high growth rates are associated with high initial levels of GDP per capita. This finding shows up even when controlling for regional economic structures, change in manufacturing specialization, the degree of openness and geographical proximity to western markets. Our research suggests that in the first stage of market integration divergence forces tend to prevail leading to relative winners and losers across space. Key words: Economic integration, Location of economic activity, Regional growth JEL Classification: F15, R11, R12

OAI identifier:

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.

Suggested articles

Citations

  1. (2002a): Does Geographical Agglomeration Foster Economic Growth? And Who Gains and Looses from it?, CEPR Discussion Paper No. 3135, London: Centre for Economic Policy Research.
  2. (1992). A model of growth through creative destruction, in:
  3. (2003). Data
  4. (2003). Economic Geography and Public Policy,
  5. (1995). Economic Growth,
  6. (1991). Economic Integration and Endogenous Growth, in:
  7. (2000). Economic structure and change in the Balkan region – implications for integration, transition and economic cooperation, in:
  8. (1990). Endogenous technological change, in:
  9. (1996). Equilibrium locations of vertically linked industries, in:
  10. European Commission (2001a): Real convergence in candidate countries. Past performance and scenarios in the pre-accession economic programes, European Commission, Directorate for Economic and Financial Affairs,
  11. European Commission (2001b): Real convergence and catching-up in the EU, in: European Economy,
  12. (2001). Evolving Geographical Specialisation of European Manufacturing Industries, in:
  13. (1991). Geography and Trade,
  14. (2001). Global Income Divergence, Trade and Industrialization: The Geography of Growth Take-Off, in:
  15. (1995). Globalisation and the inequality of nations,
  16. (1999). Growing Locations: Industry Location in a Model of Endogeneous Growth, in:
  17. (2001). Growth and Agglomeration, in:
  18. (2000). Growth Theory, second edition,
  19. (1991). Increasing returns and economic geography, in:
  20. (1986). Increasing returns and long-run growth, in:
  21. (1991). Innovation and growth in the global economy,
  22. (1933). Interregional and international trade,
  23. (1988). On the mechanics of economic development, in:
  24. (2003). Openess and Growth: What’s the Empirical Relationship?,
  25. (2001). Outward-Orientation and Development: Are Revisionists Right?,
  26. (2000). Regional labour market differentials during transition in Hungary,
  27. (2000). Regional specialisation and concentration
  28. (2002). Regional Specialisation and Concentration of Industrial Activity in EU Accession Countries, ZEI Working Paper B02-16,
  29. (2003). Second progress report on Economic and Social Cohesion, Luxemburg: Office for Official Publications of the European Communities.
  30. (1996). Shifts in regional development in Estonia during the transition, in:
  31. (2003). Spatial Implications of Economic Integration in EU Accession Countries,
  32. (1999). Specialisation and (geographic) concentration of European manufacturing, Enterprise DG Working Paper No 1, Background Paper for the ‘The competitiveness of European industry:
  33. (1999). Specialisation patterns in Europe, in:
  34. (2002). Specialization and Growth Prospects in Border Regions of Accession Countries,
  35. (1996). The Bulgarian economy in transition: the regional effect, in:
  36. (2002). The CEECs in the Enlarged Europe: Convergence Patterns, Specialization, and Labour Market Implications, The Vienna Institute for Comparative Economic Studies (WIIW),
  37. (2000). The Core-Periphery Model and Endogeneous Growth: Stabilising and De-Stabilising Integration, in:
  38. (1919). The effect of foreign trade on distribution of income, in:
  39. (2000). The new regional structure in Hungary,
  40. (1996). The regional dimension of transition in Eastern and Central European Countries: An assessment, in:
  41. (2002). The Spatial Aspects of Development
  42. (1999). The spatial economy,
  43. (2000). The spatial impact of East-West integration,
  44. (2001). Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross National Evidence,
  45. (2003). What have we learned (before and) after Myrdal? Growth theory and disparities, Paper prepared for the conference on “Cohesion Reform in a Larger Union”, College of Europe, Brugges,