Productivity Differences in the European Union: National, Regional and Spatial Effects

Using panel data on European regions and applying Analysis of Covariance, our study provides an empirical assessment of the relative importance of national, regional and spatial factors for explaining variations of productivity. Our analysis shows that initial economic conditions or agglomeration and centrality are indeed relevant for differences in productivity levels. What is far more important, however, is which country a region belongs to. Productivity differences in the European Union are thus obviously dominated by national regimes. In light of the historically strong influence of the nation states, this result may come as no surprise. What is surprising is the fact that the role of countries has not decreased over time, despite intensive integration efforts (European Single Market, Economic and Monetary Union).Regional productivity, agglomeration and centrality, panel data econometrics

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy.Regional growth; Agglomeration; Markov chains

Regional productivity differences in the European Union - Theoretical predictions and empirical evidence

The analysis of regional income and productivity differences in the European Union (EU) has some tradition. The theoretical framework of most empirical studies on these subjects is the neoclassical growth model. Thus, research has focussed on convergence of income and productivity among EU regions. While spatial clustering is an issue in a number of studies, geography is rarely taken into account. This paper takes an explicitly spatial perspective, so we are able to look at an alternative theoretical approach, the New Economic Geography (NEG). Our regional classification is a modified version of the NUTS2 level. We use the degree of agglomeration and the geographical location (core vs. periphery) as geographical indicators. This allows for the empirical evaluation of some of the ideas of NEG regarding the pattern and development of regional productivity differences of EU regions. The analysis covers the period from 1982 to 2000. We develop a two-stage estimation strategy. Using panel data analysis in the first stage we estimate region-specific effects on productivity and its dynamics in terms of production and employment growth. In the second stage we apply Analysis of Covariance in order to explain those region-specific effects through other time-invariant factors and to estimate the impact of these factors on productivity. Our results indicate a strong significance of region-specific factors for productivity differences in the EU. The geographical indicators are significant but their impact appears to be rather limited. While the estimated parameters of the categorial spatial variables are consistent with predictions of the NEG, unobserved heterogenity at the national level is much more important. State-specific effects can explain a major part of variation in regional productivity. This implies that the regional pattern of productivity in the EU still is largely determined by national "productivity regimes". Regarding the productivity dynamics in the EU, we find a tendency towards convergence. This is in line with most other empirical studies on this subject. However the decrease of regional productivity differences is the result of two opposite processes: There is convergence of production but divergence of employment. Again national factors appear to dominate. We find that the dynamics of regional development in terms of output and employment growth are strongly determined by state-specific effects and these effects are varying significantly over time. A tentative interpretation of our results is that the economic development of regions within the EU can not be easily explained by either neoclassical theory or NEG. The reduction in regional productivity differences appears to be formed to a large extent by factors at the national level. Examples are the downsizing of low productivity agriculture in southern european countries or the boost in part-time employment in the Netherlands during the eighties. Further empirical research will have to establish whether the national component in regional development is attenuating and a European pattern of productivty growth is emerging.

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy. --Regional growth,agglomeration,Markov chains

Regional disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. One of the “stylised facts” from the empirical literature is that the process of absolute convergence observed for decades has slowed down or even petered out during the 1980s. In this paper we analyse whether it has resumed and persisted in the 1990s when European integration made huge steps forward. We construct a typology of regions in order to examine whether there are overlapping trends of regional development, in particular, overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Both of our approaches, Marcov chain analysis and dynamic panel estimation, provide evidence that regional convergence in the EU15 has become stronger in the 1990s. At the same time there appears to exist a tendency towards further agglomeration of high income economic activities. Keywords: Regional growth, agglomeration, dynamic panel estimation

A near-field study on the transition from localized to propagating plasmons on 2D nano-wedges

In this manuscript we report on a near-feld study of two-dimensional plasmonic gold nano-wedges using electron energy loss spectroscopy in combination with scanning transmission electron microscopy, as well as discontinuous Galerkin time-domain computations. With increasing nano-wedge size, we observe a transition from localized surface plasmons on small nano-wedges to non-resonant propagating surface plasmon polaritons on large nano-wedges. Furthermore we demonstrate that nano-wedges with a groove cut can support localized as well as propagating plasmons in the same energy range

Regional Disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. In this paper we examine whether there are overlapping trends of regional development in the EU: overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Kernel density estimation, Markov chain analysis and cross-sectional regressions provide evidence that convergence of regional per-capita income in the EU15 has become considerably stronger in the 1990s. The reduction of income disparities, however, is a phenomenon between nations but not between regions within the EU countries. European integration (and possibly European regional policy) foster the catching-up of lagging countries but at the same time forces for agglomeration of economic activities tend to increase disparities within the EU member states. Obviously, the productive advantages of spatial proximity do not vanish in the knowledge economy

Regional productivity differences in the European Union - Theoretical predictions and empirical evidence

The analysis of regional income and productivity differences in the European Union (EU) has some tradition. The theoretical framework of most empirical studies on these subjects is the neoclassical growth model. Thus, research has focussed on convergence of income and productivity among EU regions. While spatial clustering is an issue in a number of studies, geography is rarely taken into account. This paper takes an explicitly spatial perspective, so we are able to look at an alternative theoretical approach, the New Economic Geography (NEG). Our regional classification is a modified version of the NUTS2 level. We use the degree of agglomeration and the geographical location (core vs. periphery) as geographical indicators. This allows for the empirical evaluation of some of the ideas of NEG regarding the pattern and development of regional productivity differences of EU regions. The analysis covers the period from 1982 to 2000. We develop a two-stage estimation strategy. Using panel data analysis in the first stage we estimate region-specific effects on productivity and its dynamics in terms of production and employment growth. In the second stage we apply Analysis of Covariance in order to explain those region-specific effects through other time-invariant factors and to estimate the impact of these factors on productivity. Our results indicate a strong significance of region-specific factors for productivity differences in the EU. The geographical indicators are significant but their impact appears to be rather limited. While the estimated parameters of the categorial spatial variables are consistent with predictions of the NEG, unobserved heterogenity at the national level is much more important. State-specific effects can explain a major part of variation in regional productivity. This implies that the regional pattern of productivity in the EU still is largely determined by national "productivity regimes". Regarding the productivity dynamics in the EU, we find a tendency towards convergence. This is in line with most other empirical studies on this subject. However the decrease of regional productivity differences is the result of two opposite processes: There is convergence of production but divergence of employment. Again national factors appear to dominate. We find that the dynamics of regional development in terms of output and employment growth are strongly determined by state-specific effects and these effects are varying significantly over time. A tentative interpretation of our results is that the economic development of regions within the EU can not be easily explained by either neoclassical theory or NEG. The reduction in regional productivity differences appears to be formed to a large extent by factors at the national level. Examples are the downsizing of low productivity agriculture in southern european countries or the boost in part-time employment in the Netherlands during the eighties. Further empirical research will have to establish whether the national component in regional development is attenuating and a European pattern of productivty growth is emerging

Productivity Differences in the European Union : National, Regional and Spatial Effects

Using panel data on European regions and applying Analysis of Covariance, our study provides an empirical assessment of the relative importance of national, regional and spatial factors for explaining variations of productivity. Our analysis shows that initial economic conditions or agglomeration and centrality are indeed relevant for differences in productivity levels. What is far more important, however, is which country a region belongs to. Productivity differences in the European Union are thus obviously dominated by national regimes. In light of the historically strong influence of the nation states, this result may come as no surprise. What is surprising is the fact that the role of countries has not decreased over time, despite intensive integration efforts (European Single Market, Economic and Monetary Union)

Regional disparities in the European Union: Convergence and Agglomeration

Economic disparities between the regions of the European Union are of constant concern both for policy and economic research. One of the “stylised facts” from the empirical literature is that the process of absolute convergence observed for decades has slowed down or even petered out during the 1980s. In this paper we analyse whether it has resumed and persisted in the 1990s when European integration made huge steps forward. We construct a typology of regions in order to examine whether there are overlapping trends of regional development, in particular, overall convergence on the one hand and persistent or even increasing spatial concentration (agglomeration) on the other. Both of our approaches, Marcov chain analysis and dynamic panel estimation, provide evidence that regional convergence in the EU15 has become stronger in the 1990s. At the same time there appears to exist a tendency towards further agglomeration of high income economic activities. Keywords: Regional growth, agglomeration, dynamic panel estimatio