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The Annals of Regional Science

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23-01-2022 | Special Issue Paper

Industrial transformations and regional inequalities in Europe

Authors: Roberta Capello, Silvia Cerisola

Published in: The Annals of Regional Science | Issue 1/2023

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Abstract

An important channel through which less developed European countries have grown over the past twenty years is through the industrial transformation of their economies from low to higher value-added activities. The aim of the paper is to address the role of industrial transformation on regional imbalances, by analysing the different components of industrial productivity dynamics, namely the industrial composition, competition and reallocation effects. Based on both a shift-share analysis and a simulation analysis, the paper shows that the reallocation towards higher value-added sectors in Central and Eastern European (CEE) countries could in fact lead to higher regional inequalities. Our empirical results lead us to claim that short-term normative interventions should go in the direction of supporting “modern and technologically advanced traditional sectors” rather than necessarily pushing CEE countries towards a high value-added industry specialization.

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As Table A1 in Appendix shows, the ranking of sectors in terms of productivity growth calculated with GDP in PPS or at constant prices does not change.

Unfortunately, sectoral disaggregation by manufacturing sectors at NUTS2 level is not available for all the European countries.

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Title: Industrial transformations and regional inequalities in Europe
Authors: Roberta Capello
Silvia Cerisola
Publication date: 23-01-2022
Publisher: Springer Berlin Heidelberg
Published in: The Annals of Regional Science / Issue 1/2023
Print ISSN: 0570-1864
Electronic ISSN: 1432-0592
DOI: https://doi.org/10.1007/s00168-021-01097-4

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