Location matters: A spatial econometric analysis of regional resilience in the European Union

Abstract

The aim of this study is to empirically examine regional resilience by assessing economic growth patterns in two distinct groups of regions across the European Union in the aftermath of the 2008 economic and financial crisis. In an effort to consider the regions as interconnected economic areas and account for spillover effects, the model incorporates complex spatial effects that consider both spatial heterogeneity and spatial dependence. The analysis follows a step‐wise approach. First, spatial heterogeneity is assessed by employing Exploratory Spatial Data Analysis, which identifies two distinct spatial regimes, a core and a periphery, based on their initial level of economic development. A Spatial Durbin Model is then employed to estimate the determinants of regional resilience and growth in both regimes, including potential spillover effects. Results indicate that while both spatial regimes experience processes of economic convergence, recent determinants of growth, as well as spillover dynamics, differ across the two. In the core regime, better institutions, higher shares of investment, and an economy specialized in higher value‐added sectors significantly spur domestic growth, with investment also inducing positive spillover effects to neighbouring regions. In the peripheral regime, low shares of lower‐secondary educational attainment and high shares of tertiary educational attainment have a significant positive effect on domestic growth, with higher shares of tertiary educational attainment also inducing positive spillover effects. Moreover, technological readiness is also identified as an important factor in the peripheral regime with positive spillover effects. Upon the bedrock of these findings, initial policy proposals are offered.

Winners and losers of rapid growth in Turkey: Analysis of the spatial variability of convergence

“…Moran's I and Geary's C). While the first step of these approaches (Annoni et al, ; Bourdin, ; Longley & Tobón, ) deviates from Billé et al (); remaining effor to control for spatial mechanisms and check for coefficient stability are identical.…”

“…Impact of economic turmoils can influence the regional convergence performance. Martin (), Cellini and Torrisi (); Capello, Caragliu, and Fratesi (); Cuadrado‐Roura, Martin, and Rodríguez‐Pose (); Webber, Healy, and Bristow () and Annoni, de Dominicis, and Khabirpour () highlight that regional resilience to macroeconomic turmoils is a vital element of regional growth and convergence. Our analyses so far covers the post–2000 period during which Turkey realize substantial level of economic change and development.…”

“…Similarly, Bourdin () apply a procedure in order to distinguish a west‐east duality for Central and Eastern European countries. Recently Annoni et al () analyse the spatial variability of regional growth across the European regions by identifying spatial regimes via exploratory spatial data analyses (i.e. Moran's I and Geary's C).…”

“…Therefore, we disregard the local significance and obtain a LISA score for each province while determining the spatial regimes. Following Annoni et al () we tried seven combinations by using regions within certain clusters and outliers. Next we apply an ANOVA test for each combinations which are given in Table .…”

Heterogeneity of correlation between the locational condition and industrial transformation of regenerative resource‐based cities in China

“…Second, the locational condition affects the effectiveness of industrial transformation. Experiences have shown that the better the locational condition, the less the dependence of urban economic growth on natural resources, and the more it can alleviate the “resource curse” effect, which means that metropolitan areas and high‐accessibility areas are more likely to develop alternative industries and form diversified industrial patterns (Annoni, Dominicis, & Khabirpour, ; Deng, Lu, & Xiao, ). On the contrary, the inferior location had little effect, and it even played a role in fueling its decline (Baldwin & Okubo, ; Guastella & Timpano, ).…”