Determinants of regional resilience to economic crisis: a European perspective

The impact of the economic crisis has been highly asymmetric across the European regions. The objective of this paper is to investigate the determinants of resilience to economic crisis across European regions. Regional economic resilience was assessed based on employment changes during 2008–2013, while socioeconomic determinants were analysed pre-crisis (2002–2007). A highly heterogeneous pattern of resilience was observed within countries, while significant differences were also revealed between the continental northern-central regions and the southern periphery. A multilevel logistic regression model indicated the magnitude of country-effects on the performance of regional employment during crisis periods. Both EU-referenced and country-referenced regional resilience identified the positive effect of accessibility and the negative effect of a large manufacturing sector in the ability of regions to withstand recessionary shocks. Education and economic development level positively affected the resilience of both large and small regional European economies. Investing in education enhances the spatial homogeneity across Europe in terms of its ability to react to economic shocks. The results reveal the importance of narrowing disparities among regions and formulating targeted and differentiated regional development policies at country level, taking into consideration the size of the economy of the regions.     

RECESSIONARY SHOCKS AND REGIONAL EMPLOYMENT: EVIDENCE ON THE RESILIENCE OF U.K. REGIONS*

ABSTRACT We analyze the resilience of U.K. regions to employment shocks. Two basic notions of resilience are distinguished. With engineering resilience, there is an underlying stable growth path to which a regional economy rebounds following a shock. With ecological resilience, shocks can permanently affect the growth path of the regional economy. Our data set consists of quarterly employment series for 12 U.K. regions (NUTS I) for the period 1971–2010. Using a seemingly unrelated regression (SUR) model specification, we test for the relevance of (engineering) resilience of U.K. regional employment to the four recessionary shocks in our sample. It turns out that U.K. regions do indeed differ in their resilience, but that these differences mainly concern the initial resistance to these shocks and not so much the recovery stage. The SUR model does not allow shocks to have permanent effects and it also does not take the possibility of time differentiated shock spillovers between the 12 regions into account. To this end, we also estimate a vector error‐correction model (VECM) specification where employment shocks can have permanent effects and where also interregional employment linkages are included. We find that employment shocks typically have permanent effects when it concerns the own‐region effects. Permanent effects can also be found for the impact on other regions but the interregional effects are typically only significant for nearby regions.     

The Global Economic Crisis and Foreign Investment in Russia from the EU: Empirical Evidence from Firm-Level Data

This paper empirically examines the impact of the recent global economic crisis on foreign investment from EU countries in Russia by estimating a location choice model for foreign firms' entry in Russian regions for the period 1997-2011. It also examines the relative importance of various determinants of location choice on the redistribution of foreign-owned firms among Russian regions before and after the crisis. Strong evidence during the post-crisis period (2008-2011) of a decrease in market-seeking foreign investment in manufacturing and resource-seeking foreign investment in trade is examined not only in light of the crisis but also (in the latter case) within the context of the new Russian law for foreign investment in strategic industries, which went into effect in 2008.     

European Corridors as Carriers of Dynamic Agglomeration Externalities?

Transport corridors are viewed as a promising way forward in European Union (EU) transport policy, assumed to contribute positively to regional economic development. However, the validity of this assumption is not evident. The aim of this paper is to empirically test whether agglomeration economies in European transport corridor regions are positively related to indicators of regional economic development compared to regions outside the scope of corridors. The results build on the notion that the type of agglomeration economy in combination with the structure of the economy matters for prospects of structural economic growth in different regions. In this way, the analysis not only contributes to enhancing the empirical scrutiny of the corridor concept in EU transport policy, but also provides new insights into how corridors contribute to regional economic growth. We find only limited evidence for a corridor effect across European regions on productivity and employment growth externalities. Instead, we find a large degree of spatial heterogeneity interacting with corridors—a heterogeneity that has been little recognized in EU policies. We suggest that recent attention to place-based development strategies may accord well with the kinds of agglomeration effects related to corridor development observed in this study.     

FACTOR ACCUMULATION,EXTERNALITIES, AND ABSORPTIVE CAPACITY IN REGIONAL GROWTH: EVIDENCE FROM EUROPE

This paper proposes a model that incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive capacity. This model is estimated using a sample of EU regions, over a period including the enlargement of the single‐market area in the middle of the first decade of the 21st century. Results confirm the relevance of local absorptive capacity that is directly linked with the process of making the most of externalities. Capital deepening reduced the role of capital in explaining the regional productivity gap, but was not enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.     

Policy governance from an autopoietic perspective: revisiting Hungary’s regionalization experience

This perspective on Hungary’s post-socialist regional policy governance is informed by an approach that relates region-building and regional governance to social autopoiesis and the self-referential and self-(re)producing nature of social systems such as states. Following debates in regional studies that reflect tensions between the local constitution and external determination of regional governance, we will demonstrate how Hungary has incorporated European Union (EU) policy frameworks through specific appropriations of territorial politics and regional ideas. These appropriations reflect Hungary’s post-socialist transformation not only in terms of responses to global forces, but also as specific spatial practices and regionalization experiences. As we argue, this has in effect resulted in a regionalism without regions – a strategy of Europeanizing territorial politics without creating institutional structures that directly challenge existing power relations. Autopoiesis thus helps explain the resilience of social systems, not only their resistance to institutional change but also their capability to ‘domesticate’ external influences. While criticisms of Hungary’s technocratic and post-political regionalization projects cannot be ignored, our analysis indicates why externally driven intervention in self-organizing governance processes, for example through EU conditionality, has had less impact than expected.     

Does EU cohesion policy work? Theory and evidence

This paper evaluates the effectiveness of European Cohesion Policy in the regions of 12 EU countries in the period 1991–2008, on the basis of a spatial growth model, which allows for the identification of both direct and indirect effects of EU funds on GDP per worker growth. We find that “Objective 1” funds are characterized by strong spatial externalities and a positive and concave effect on the growth of GDP per worker, which reaches a peak at the ratio funds/GDP of approximately 3 percent and becomes non‐significant after 4 percent. “Objective 2” and “Cohesion” funds have nonsignificant effects, while all the other funds exert a positive and significant effect, but their size is very limited. EU Cohesion Policy, moreover, appears to have increased its effectiveness over time. In the period 2000–2006 Objective 1 funds are estimated to have a median multiplier equal to 1.52, and to have added 0.37 percent to the GDP per worker growth. Overall, in the period 1991–2008, funds are estimated to have added 1.4 percent to the median annual growth, and to have reduced regional disparities of 8 basis points in terms of the Gini index.     

Border-regional resilience in EU internal and external border areas in Finland

European border regions have witnessed a long history of remarkable mobility shocks stemming from complex ecological and economic changes and geopolitical events. The experience of near-continuous regional and global crisis has increased interest towards the idea of resilience, that is, the ability of communities and regions to adapt and cope with disturbances and transitions. Inspired by the literature of regional resilience and the evolutionary approach, this paper will examine the difference that borders and geopolitical conditions make from the perspective of regional resilience and especially ‘border-regional resilience’. Particular focus will be on irregular cross-border mobilities and consequent transitions in EU external and internal border towns, here the Finnish towns of Lappeenranta and Tornio. The study points out that the geopolitical environment and the openness of the border partly determine the regional development trajectories and the ways of coping with cross-border mobility-related changes. Although the border location entails some vulnerability, formal and informal cross-border institutions and relations of trust are of crucial importance from the perspective of border-regional resilience. The paper proposes a research agenda for studying border-regional resilience in the context of environmental, economic and social changes and geopolitical events.     

‘General interests’ as a rationale for the US–Republic of Korea alliance between 1998 and 2008

The US–Republic of Korea (ROK) alliance had significantly developed asset specificities and common social identities attached to it during the cold war period. If institutional features and ideational factors originating from the cold war threat can account for alliance resilience in the post-cold war period, the US–ROK alliance should be a ‘most likely case’ to support those causal links. This article shows that such is not the case. This article, instead, argues that the US–ROK alliance went beyond being an instrument of threat response to becoming a more complicated mechanism for serving ‘general interests’ in relation to North-East Asian regional order maintenance and order-building, which drove the US–ROK alliance between 1998 and 2008.     

EUROPEAN UNION REGIONAL PRODUCTIVITY DYNAMICS: A “DISTRIBUTIONAL” APPROACH*

ABSTRACT Working within the “distributional approach,” this research offers evidence of past and future polarization in aggregate regional labor productivity in EU‐15. This finding is robust to alternative definitions of the spatial units used and does not appear to be the result of regional structural change. Spatial effects are found but are of rather localized nature. Turning to separate sectoral analyses suggests that past and future polarization in labor productivity across European regions may be associated with regional productivity differences in the services sectors.     

Spatial and sectoral differentiation of support to innovative companies from EU funds in Czechia

This paper aims to introduce a case study of Czechia in distribution of the EU funds and their spatial patterns. EU funds receive plenty attention from both European society and the scientific community. However, there is a lack of detailed evaluations of spatial and sectoral differentiation, which might bring a better understanding to the whole EU funds system. This paper attempts to fill this gap with a method of geographical differentiation analysis of the Czech operational programme Enterprise and Innovations 2007–15, which should increase the competitiveness of industry and develop services for commercial activities. Historically, subsidies often go to peripheral regions at the borderland with Slovakia and Poland, while regions along the borders with Germany and Austria receive only a low level of support. Jurisdictions of the major recipients from hi-tech sectors are mainly in the close vicinity of the largest cities (Praha, Brno), which are natural centres of high technologically demanding sectors, but a high share of high-tech subsidies goes to some peripheral districts as well. These findings can contribute not only to the academic discussion about contradictory developmental impacts of subsidies but to the all-European debate on the EU funds purposes as well.     

Economic resilience of metropolitan,old industrial,and rural regions in two subsequent recessionary shocks

ABSTRACT

In this paper, we focus on the question of how particular types of regions react to economic shocks. Drawing on a case study of Czech microregions, we aim to determine if the old industrial regions differ significantly from other types of regions (metropolitan, urban, rural) in (post)crisis economic development. Two aspects of regional resilience (measured by unemployment growth) were considered: recession and recovery. We focused on the comparison of two subsequent recessionary shocks: the 2008–2010 global recession and the 2012–2013 austerity crisis. Metropolitan regions showed relatively stable economic development. Old industrial regions were more resilient than expected. Rural regions exhibited highly diverse reactions: lower resistance was characteristic for regions specialized (mostly) in automotive and some labour-intensive industries. The first wave of recession increased unemployment mostly in (rural) regions dependent on export-oriented manufacturing, the second wave especially hit larger cities with metropolitan functions. Regions that experienced a sharp unemployment increase in the first recession were generally more resistant in the second wave. All types of regions were internally highly diverse in their reactions to economic crises, which points to the importance of micro-regional variations of economic resilience, the performance of individual local firms and subsidiaries, and extra-regional factors of regional development.     

The Regional Impact of EU Eastern Enlargement: A View from Germany

Based on a relational concept of regional analysis this contribution emphasizes that European Union (EU) Eastern enlargement will primarily lead to a restructuring or intensification of interregional economic relations. However, it rejects the widespread view that at first the border regions at the present EU Eastern boundary would be affected by Eastern enlargement. This view relies on the problematic assumption that the regions' transnational relations are subject to a logic of geographical nearness. The most important nodes of transnational economic relations in an enlarged EU are not the border regions, but certain regional development centres in the interior of the European economic space. Thus the regional impact of EU Eastern enlargement should be differentiated with regard to different types of regions: Particular advantages come towards the structurally strong regions in the interior of the present EU as well as the accession countries, whereas the structurally weak regions at the present EU Eastern boundary can gain advantages from Eastern enlargement only to the extent that they manage to overcome their endogenous blockades concerning cross-border economic cooperation and a positive attitude of the regions' population towards European integration.     

An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority Objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We therefore consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as Data Envelopment Analysis (DEA), which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in creasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods like regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is run in all the models.     

Premature exit from and delayed entrance into the less developed status: An empirical appraisal of the structural funds allocation criterion

This paper investigates the impact of the main criterion employed by the European Commission for the allocation of the largest portion of Structural Funds, based on the threshold of the 75% of European Union (EU) average gross domestic product (GDP) per capita. We focus on the 2014–2020 programming period and on EU-15 regions to analyze if this criterion has penalized some of them, as a consequence of the 2004 EU enlargement, which has represented an exogenous shock in the allocation process, due to the economic backwardness of new member states. Through the application of Synthetic Control Methods and Difference-in-Differences estimators at different geographical scales, we show that regions that did not obtain the less developed status in both the programming period 2007–2013 and 2014–2020, but that would have obtained it in the period 2014–2020 without the 2004 EU enlargement, experienced a significantly lower GDP per capita growth between −10.5% and −5.7%. Conversely, territories that in the period 2014–2020 lost the less developed status, previously obtained in the time frame 2007–2013, were not characterized by a significantly lower economic growth, providing some evidence of the effectiveness of the safety net.     

An Impact Analysis of the European Structural Funds on the Variation of the Rate of Employment and Productivity in Objective 1 Regions

Regional policies seek to enable regions to increase their competitiveness and development, and as such one priority objective of activities financed by Structural Funds is higher employment, higher productivity and economic activity. How efficiently the regions apply the funds is a fundamental issue for the development and continuity of regional policies. We, therefore, consider that determining the efficiency of European regional policies is an issue of high importance, and this is the main aim of this study. We have considered it appropriate to use the available information to apply a mathematical technique known as data envelopment analysis, which allows us to calculate the technical efficiency and inefficiency of the Structural Funds applied in the Objective 1 regions for the period 2000–2006. Furthermore, we wish to determine if the regions have been more efficient in increasing their levels of employment or in increasing productivity. Our study applies this methodology along with other methods such as regression analysis, profit analysis and factorial analysis to determine the variation in the rate of unemployment and productivity in these European Regions. The study reveals that only eight regions are efficient, although none of them is in all the models run.     

EMU versus the regions? Regional convergence and divergence in Euroland

There is currently considerable interest in and debate overthe impact of increasing European economic and monetary integration(EMU) on the regions of the EU. Opinion is sharply divided overwhether EMU is leading to regional economic convergence or regionaleconomic divergence. This paper examines the theoretical argumentsand empirical evidence for these opposing views, and presentssome additional analysis of patterns of regional productivitytrends and employment growth over the period 1975–98.The picture that emerges is a complex one: whilst worker productivityshows only very weak convergence across the EU regions (a processwhich halted altogether after the mid-1980s), regional employmentgrowth has been sharply divergent. Although there is littlesupport for the claim that EMU will lead to regional convergence,these findings suggest that until much more detailed investigationof the specific impacts on particular types of region is undertaken,the regional implications of EMU will remain a contentious issue.     

The dynamics of the community support framework for Greece and its contribution to regional convergence

The objective of this paper is to shed light on the dynamic aspects of the Community Support Framework for Greece and to further explore its contributions to regional convergence. Given that, the majority of the Greek regions have been classified among the poorest regions of the European Union (EU) with a major inter and intra regional divergence gap, the issue of catching up the convergence factors acquires paramount importance in view of the new trends of European Community (EC) Regional Policies. Unquestionably, the convergence of the Greek regions requires a series of macroeconomic management devices and the encouragement of a series of soft and hard infrastructure projects which will restructure, upgrade and adjust their regional economy. The analysis of this paper will focus on the assistance stemming from the Regional and Structural Funds of the EU, plus the Cohesion Fund with the aim to uncover the factors which determine the extension and intensity of the convergence and divergence procedure. Using the data from the Community Support Framework (CSF I) (1989–1993), which has already been completed, attention will be paid to some of the basic problems which decisively impedes the real convergence of the Greek regions. The author will also examine in depth the criteria used by the competent authorities in allocating the funds to the regional bodies in relation with the existing regional imbalances and then he will propose a new synthetic method considering more factors which influence the final allocation approach. The conclusions of the paper might systematically unravel a series of problems facing the regions both socio‐economic and administrative which if they are not effectively confronted may possibly enlarge the existing divergence gap of the Greek regions.     

Governance, institutional capacity and partnerships in local economic development: theoretical issues and empirical evidence from the Humber Sub-region

Recent research on local and regional economic development has focused upon transformations in local governance and institutional capacity. It has been argued that local authorities have ceded power to other actors and institutions involved in economic development and regeneration, and that the success of local and regional economic development is closely related to the strength of 'institutional capacity' within an area. In this paper, we examine these claims with reference to the operation of EU Structural Funds in the Humber Sub-region of the UK. Previous research on local governance and institutional capacity has had a limited empirical focus, drawing conclusions from studies of either economically 'successful' regions or regions undergoing regulatory and institutional transformation and precluding analysis of the nature and conditions of local governance and institutional capacity in less developed regions. Our case study evidence not only suggests that arguments about the declining influence of the local state are overdrawn, but also indicates a need for more nuanced accounts of the role of institutional capacity in regional development.     

地方性环境立法与经济全要素生产率关系的研究

本文在测算2004—2017年区域层面全要素生产率指数基础上,运用双重差分法全面考察了地方政府环境立法对于全要素生产率的影响。研究发现：中国整体全要素生产率面临严峻的下滑,尤其在2009—2014生产面全要素生年间更加明显,且东中西部区域间TFP指数分布情况在空间上呈“非线性”特征。地方环境立法对地方全要素生产率具有显著的促进作用,然而过度的环境规制措施却不能显著推动经济质量的提升、实现波特效应。