Centre-Periphery and Specialization in the E. U. : An Analysis From a New Economic Geography Perspective

Abstract

This paper attempts an assessment of a number of basic statistical indicators of EU regions and countries from a New Economic Geography (NEG) perspective. After a brief overview of the underlying theoretical framework, two important hypotheses of NEG’s theoretical models are examined for the case of EU regions: (a) the existence of a center-periphery pattern, with the use of indicators measuring the “home market effectâ€; (b) the existence of Marshall-type “economies of localizationâ€, as well as of “dynamic external economiesâ€, on the basis of “knowledge-intensive†and “human capital†indicators. This analysis takes place on a regional scale. An assessment of the evolution of specialization in EU countries is also undertaken with the use of an index of “regional specializationâ€. The analysis provides clear indications that, the deepening of European integration led to both phenomena described by NEG models: (a) the strengthening of two types of concentrations – “the enlargement of the home market†and “local external economies†- in the traditional industrial centres of the EU; (b) an increase in the degree of specialization of its member-states. Policy implications point to the strengthening of factors that could lead to the development of new dynamic centres in peripheral EU regions.