European Integration and Regional Specialization

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European Integration and Regional Specialization

• Carlo Menon
• Ca Foscari Venice
• LSE

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Background

• EU (Krugmans) paradox is integration fostering
  more diversification?
• OCA and asymmetric shocks
• Models of endogenous growth and NEG
• Intra-industry trade
• Empirical issues Krugman and Locational Gini
  indexes, geographical units, tradable/not
  tradable, service sector, data

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Distributive approach

• First proposed by D. Quah (1993) as an
  alternative to the ß-convergence test
• Based on the representation of the stochastic
  kernel operator Mu, which codify the relation
  between the probability functions associated to
  the distribution F at time T and t
• It can be represented by a Markov-Chain process
  or by a 3D graph.
• Points of strength focus on distributional
  dynamics and multimodality, possibility of
  applying conditional schemes (i.e. spatial
  dependency).

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Distributive approach to regional specialization

• For a given industry, analysis of the evolution
  of the distribution at time t and T of the share
  of employment in each region, indexed for each
  period by the average value of all regions
• Stochastic kernel 3D plot of P(fTft)
• Possibility of applying different conditional
  schemes (national values, spatial contiguity,
  trade volumes...)

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Example Textile 1990-2001,EU-15, NUTS2
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Regional sectoral labour productivity

• Distributive analysis of dynamics of GVA/L for
  sub-national units, inside each sector
  (surprisingly rare!)
• Speculating that manufacturing and service sector
  have different spatial properties, the
  composition effect may hide relevant results
• First (raw) outcomes
• divergence for manufacturing, persistence/divergen
  ce for service sector
• After applying a contiguity conditioning
  scheme clear convergence for manufacturing,
  persistence for service sector

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Next steps and research problemsspecialisation

• Locational dynamics of each manufacturing branch
  
• Spatial properties of service sector
• Work on data in order to overcome the NUTS2
  classification (toward FUR or continuous space)
• Regional Intra-industry trade
• Accounting for functional urban specialization
  and demanufaturing
• Links to other relevant issue of economic
  geography (cities hierarchy, convergence...)

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Next steps and research problemssectoral
convergence

• Improve the empirical (distributional) approach
  to regional sectoral labour productivity
  convergence
• Explore and explain the differences between
  service and manufacturing
• Shadow effect (negative autocorrelation?)
• Overcome the NUTS2 classification (toward FUR or
  continuous space)

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Thanks
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CONVERGENCE
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PERSISTENCE
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DIVERGENCE
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