Exploring the recent upsurge in productivity disparities among European regions

Abstract

The convergence of per capita income across regions is one of the most prominent issues on the European Union (EU) agenda. Recent studies based on historical regional data corroborate that over the course of almost half a century, from 1950 to 1990, per capita income across Western European

Au revoir Paris! Spanish regions closer to the EU average and further away from the leaders

“…Such advances are even more noticeable when the European regions are ranked in descending order according to their GVA per worker in 2015 (columns 3 and 4). Again we see a similar pattern to that observed in Europe (Gómez‐Tello et al, 2020), in which the richest regions make the most progress in terms of productivity per worker in 2000–2015, while medium‐ and low‐income regions hardly change. Thus, the Basque Country rises 64 places in the European ranking, Navarra 30, Madrid 15 and Catalonia 18.…”

“…This situation still largely persists in Europe. Using a Theil decomposition, Gómez‐Tello et al (2020) find that between 74% and 80% of income per capita disparities in the 156 European regions are explained by differences in productivity per worker. In what follows, we will therefore explore the position of Spanish regions in relation to European regions in terms of this measure.…”

“…Over recent years, regional inequality has taken on a new shape and become significantly more challenging, especially for the European Union (EU) and its Member States (Fratesi & Rodríguez‐Pose, 2016). Globalization and EU economic integration processes, the Great Recession and a wave of technological change driven mainly by information and communications technologies (ICT) have triggered the start of a new phase of divergence between European regions (Gómez‐Tello et al, 2020; Iammarino et al, 2019). While these forces have strengthened the competitive advantages of some large city‐regions and revalued their local factor endowments and assets, the comparative advantages of low‐ and middle‐income regions seem to have been eroded.…”

“…In Europe, there is no conclusive evidence in support of a positive relationship between city size and productivity growth. However, the upsurge in regional disparities since the 2008 crisis has been accompanied by the rise of some regions that are home to large cities (Gómez‐Tello et al, 2020). Ile de France, London, Stockholm and Brussels are stretching the upper limit of regional income distribution in Europe.…”

Rethinking the political economy of place: challenges of productivity and inclusion

“…In Figure 2 , this trend is shown for the development of average income across the 50 states in the USA. But thereafter, regional economic convergence gave way to divergence, and over the past four decades, inequalities have increased between more economically prosperous regions, cities and localities, or ‘pulling ahead places’, on the one hand, and less economically prosperous and buoyant regions, cities and localities, the ‘left behind places’, on the other ( Carrascal-Incera et al, 2020 ; Gómez-Tello et al, 2020 ; Iammarino et al, 2019 ). Many of the latter have borne the brunt of the negative aspects of deindustrialisation and globalisation, and more recently, the austerity policies that several OECD countries introduced to reduce public debt and spending following the bailing out of the banks in the global financial crisis of 2007–2008.…”