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.     

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.     

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.     

韧性概念演变与区域经济韧性研究进展

区域经济韧性试图解释当冲击发生时为何部分区域能够适应恢复,实现区域经济的持续发展,而有的区域不能摆脱冲击影响,步入经济衰退轨迹。本文通过对国内外相关文献的梳理,总结了工程韧性、生态韧性和演化韧性的概念演变以及从均衡论观点到演化观点的转向,据此重新定义了区域经济韧性的概念内涵,认为区域经济韧性是系统面对冲击时,抵抗冲击影响避免脱离发展轨迹或通过适应恢复实现经济持续发展的能力,是一个不断演化的过程。探讨了区域经济韧性研究的三个理论分析方法,对关于区域经济韧性的测度和影响因素的实证研究进行了评述,强调亟需加强韧性理论研究,界定清晰概念内涵,同时加强区域经济韧性定量本土化研究,将区域经济韧性理论应用到我国老工业基地等经济衰退地区的经济振兴与转型问题中,以期对区域经济发展提供科学参考。     

区域经济韧性：研究综述与展望

自金融危机以来，区域经济韧性成为了研究热点。现有文献从均衡论及演化论的视角建构了区域经济韧性的理论框架，认为区域经济韧性不仅是区域发展的结果也是区域发展的动态过程。大量实证研究关注区域发展过程，探讨了不同尺度下经济系统对冲击的抵抗力、恢复力，并分析了经济韧性的影响机理。区域经济韧性是时间维度与空间尺度的统一。现有研究多关注区域本身特性，缺乏从动态性、多主体互动性、多尺度融合视角审视区域经济韧性的形成过程。因此未来研究一方面应当在现有理论基础上与关系经济地理、管理学等领域紧密结合，更重视危机与冲击的异质性，系统揭示行为主体在区域经济韧性形成、维持过程中的重要作用；另一方面应当进一步关注中国发展背景与制度优势，重视韧性研究对经济发展深远的意义，从而增强中国经济在不确定环境下的稳定性。     

The Effect of Business Support on Employment in Manufacturing: Evidence from the European Union Structural Funds in Germany,Italy and Spain

This study investigates employment growth in the business activities supported by the European Cohesion Policy. We examine cross-industry, cross-regional variations in a sample of fourteen manufacturing industries and seventy European regions (in Germany, Italy and Spain) and take advantage of detailed European Union Structural Funds data at the regional level for the period 2000–2006. We show that business support is positively associated with higher employment growth in industries that are initially smaller and in those with higher growth opportunities. The results suggest that direct support to businesses by the European Cohesion Policy contributes to the growth process of employment in different industries. Because previous estimated effects at the aggregate level may in fact conceal large differences across industries, we conclude that our empirical analysis contributes to the understanding of how Structural Funds can affect industrial and regional development as well as adjustment paths.     

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.     

The role of path-dependence in the resilience of EU regions

The paper studies the role of path-dependence in the resilience of EU regions. Particularly, employing a nonparametric analysis, the paper demonstrates that historical adjustments of EU regions materialized by productivity improvements, primarily in the manufacturing sector and incidentally in the sectors of construction, financial and non-market services, during the period 1995–2008 secured high(er) levels of regional resilience during the economic crisis period 2008–2013. Such a finding provides implications not only for theory but also for policy. Policies aiming at boosting regional productivity and competitiveness, which through a positive regional performance of high growth rates is concealed, a well-structured and robust production restructuring, might affect regional resilience in a way that shields regional economies not only from current imbalances but also from any future downturns.     

Do behaviours in cultural markets affect economic resilience? An analysis of Italian regions

The purpose of this paper is to investigate the relation between the economic resilience and cultural behaviour, resorting to the evidence provided by 20 Italian regions at the time of Great Recession. We consider specific cultural behaviours, which provide a specific meaning of culture; its relation with the economic resilience of regions is analysed. We document that higher levels of supplied and demanded quantity of cultural goods in a region are associated with higher regional economic resilience as measured by the ability of limiting employment drop; the relation with the considered cultural behaviours is weaker in the case of economic resilience as measured by the ability of limiting income drop. We propose possible explanations for this asymmetry.     

Critical Events and Labour Mobility: Relocations in the Wake of the Ansett Airlines Collapse

Migration plays an important role in neo-liberal regional adjustment. This paper explores the role of economic shocks in stimulating internal migration within Australia. Drawing on the experiences of retrenched Ansett Airlines employees, it argues that economic crisis impels some households to relocate but traps others in places with restricted employment prospects. For some, the crisis of retrenchment triggers inter-state migration to take up new jobs. For others, it prompts relocation to less expensive housing, often in a geographically proximate location. These opposing responses, which are different outcomes of similar causal processes, exacerbate regional inequalities since they selectively encourage younger skilled workers to enter growing regions. The combination of high housing costs and insecure employment discourages speculative migration. The paper concludes with a brief discussion of the policy implications of these findings.     

Employment Risk in U.S. Metropolitan and Nonmetropolitan Regions: the Influence of Industrial Specialization and Population Characteristics

Abstract.  A dynamic labor market model is used to motivate the inclusion of population characteristics and industrial structure as determinants of regional employment instability. We examine how these factors influence regional employment instability using data from both metropolitan and nonmetropolitan regions in the United States. We find that population characteristics are important determinants of employment volatility and that increased industrial specialization (reduced diversification) increases employment volatility, but the magnitude of that influence drops substantially once population characteristics are considered. We also find that the influence of population characteristics and industrial specialization varies significantly across metropolitan and nonmetropolitan regions.     

Local employment growth patterns and the Great Recession: The case of Spain

The 2008 financial and economic crisis has led to widespread destruction of employment in Spain. Using municipality data, I examine employment growth differences between urban cores, urban hinterlands, and rural areas during the pre‐crisis period and the recession period. The data show that patterns of growth and decline have been very uneven across different types of areas. While in the boom years, hinterlands and rural areas experienced higher growth, urban core areas have done better during the recession years. I then test three strands of explanations for local growth differences: (i) the role of the local sectoral composition, (ii) the role of human capital, and (iii) the role of access to urban core areas. Estimations for employment growth in the two periods show that the crisis has altered some of the drivers of local employment growth and that human capital has been a key determinant of local resilience during the Great Recession.     

Regional economic resilience: the role of national and regional policies

In recent years, economic resilience has become a popular term in both theory and policy practice. This interest was triggered by the fact that some regional economies were extremely vulnerable, while others have managed to overcome, more or less effectively, the worse consequences of the current economic crisis. Within this context, questions arise regarding the role that policies at both the national and subnational levels can play in shaping regional economic resilience. Although high in the academic and political agenda, understanding the policy and governance aspects of resilience still remains a relatively underdeveloped area. The paper contributes to this debate focusing on an area which has been most severely hit by crises, the Region of West Macedonia, in Greece. The case study builds on the historical trajectory of the region in order to explain how different types of policies have influenced the ability of West Macedonia to respond to economic slumps and crises of the last 30 years. Evidence suggests that national protectionist policies largely explain not only resilience of the region against previous crises, but also its vulnerability towards the still ongoing economic crisis.     

Crown corporations and co-operatives as coping mechanisms in regional economic development

This paper focuses attention on two types of businesses, Crown corporations and co-operatives, that have long been associated with attempted solutions to regional economic developmental problems in Canada. The paper argues that co-operatives and Crown corporations can be viewed as coping mechanisms that attempt to make up for shortcomings in Canada's market-based economic system. Consistent with this perspective, the case study of co-operatives and Crown corporations finds that, taken as a single group, these firms are more spatially dispersed than their privately held and publicly traded counterparts at both the Canadian national level and the regional level in Saskatchewan. The study also shows that, taken separately, Crown corporations are highly concentrated within Saskatchewan, while co-operatives are dispersed across the province. A possible explanation for this behaviour, warranting further research, is that Crown corporations in Saskatchewan encourage development provincially by linking with global and national business networks in their respective industries, while co-operatives in Saskatchewan largely focus on facilitating economic development opportunities at a local level across the many smaller town- and city-centred regions of the province. The paper discusses the meaning of these and other findings for regional economic development efforts in Saskatchewan and Canada.     

Impact of European Union development subsidies on Hungarian regions

Since the collapse of the communist system, regional inequalities have increased in Central European Countries. This paper describes an assessment of the impacts of regional development programmes on the development of Hungarian regions at a highly disaggregated level between 2002 and 2008. We construct a multi-dimensional composite indicator to estimate the overall development of rural regions and capture social, economic and environmental dimensions. The impacts of rural development programmes were investigated through counterfactual analysis in combination with Propensity Score Matching and Difference-in-Differences approaches. There has been considerable variation with increasing concentration in the level of subsidies distributed during the analysed period. From a policy perspective, the results are disappointing. Irrespective of the subsidy measures or methodology employed, the impact of the former is very close to zero or non-significant. Our findings cast serious doubt on the effectiveness of development policy and the long-run convergence of European regions.     

REGIONAL POPULATION–EMPLOYMENT DYNAMICS ACROSS DIFFERENT SECTORS OF THE ECONOMY*

ABSTRACT An important subset of the literature on agglomeration externalities hypothesizes that intrasectoral and intersectoral relations are endogenously determined in models of local and regional economic growth. Remarkably, structural adjustment models describing the spatio‐temporal dynamics of population and employment levels or growth traditionally do not include intersectoral economic dynamics. This paper argues and shows that allowing for economic linkages across sectors in these models adds considerable value, especially in forecasting. An econometric model of population–employment dynamics, in which sectoral variations in economic development are explicitly taken into account, is applied to a large urban planning policy proposal in the Netherlands. The empirical analyses suggest that population dynamics are largely exogenous, population changes drive employment in particular in the industry and retail sectors, and employment in all sectors depends strongly on intersectoral dynamics. Intersectoral dynamics appear as important drivers of regional sectoral employment changes; they are even more important than population changes, and their effect shows up clearly even within the Dutch institutional context where strict regulatory housing and planning restrictions are enforced.     

Unfolding the relationship between resilient firms and the region

ABSTRACT

This research explores organizational resilience in four manufacturing firms in four different regions of Norway. While regional resilience has gained attention in research, there have been few studies with a micro-level focus, investigating firms and their distinctive features of resilience. We chose a qualitative multiple-case study approach and employed a critical incident technique to study resilience in selected firms that had experienced external shocks and shifts in regard to changing markets, globalization and advances in technology. Each, however, had managed to continually develop resilience capacity over time. Our framework considered three dimensions of organizational resilience: the cognitive, the behavioural and the contextual. We address how resilience is sustained over time, the evolutionary nature of organizational resilience in firms and how resilient firms relate to the region. We found that all three dimensions of resilience capacity were evident in each firm, but appeared as a complex and unique blend. Furthermore, each dimension was supported by regional ties and affiliations. The findings suggest that organizational resilience is a dynamic capability conditioned by firm–region interactions, which are cultural, social and economic. Regional resilience is built through the contribution of the firm to the economic and social systems of the region.     

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.     

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.     

When regional innovation policies meet policy rationales and evidence: a plea for policy analysis

In spite of recent advancements regarding regional innovation policy rationales and evidence, there are few analyses about the actual features of existing regional innovation policies. Nevertheless, a policy analysis perspective is important in order to recognize their distinctive patterns across regions, and to understand how rationales and evidence can be translated into policy-making. To this purpose, this paper develops a framework to study the extent to which regional innovation policies have changed during the past few years. Since the mid-2000s, there has been an important development of innovation policy rationales, advocating for more specialization; likewise, greater data availability at the regional level has allowed more sophisticated assessment of innovation performance. Finally, the crisis since 2008 has had ravaging effects in some regions, with job losses and severe economic sluggishness. Therefore, it is reasonable to expect transforming dynamics in regional innovation policies. Against this backdrop, the paper compares the institutional frameworks and budgetary priorities of four Spanish regions during the period 2001–2014: Catalonia, the Basque Country, Galicia and Andalusia. In so doing, it aims at studying the extent to which regional governments have readily addressed past and new challenges related to their regional innovation system, and if so, how.