The Cohesion vs Growth Tradeoff - Evidence from EU Regions (1980-2000)

Konferenzbeitrag

This paper provides an empirical investigation of the cohesion versus growth tradeoff on European regions at a fine geographical disaggregation level. We use data on gdp per capita at the NUTS3 level for 1980-2000 to estimate the influence of income dispersion within NUTS1 on their economic growth. We analyze the existence of the tradeoff using Redding and Venables'(2004) approach. From a simple new economic geography model in which we add a technological externality in order to allow for local growth, we derive an estimable equation linking the level of factor prices in a region to the level of inequalities inside that region, as well as the region's access to markets. Our results show a positive relation between the gdp per capita growth rate of a region and the change in the level of inequalities inside the region. Finally, an increase in market potential, as expected, has an unambiguous positive impact on local growth.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: 45th Congress of the European Regional Science Association: "Land Use and Water Management in a Sustainable Network Society", 23-27 August 2005, Amsterdam, The Netherlands

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Crozet, Matthieu ; Koenig, Pamina
• Event: Veröffentlichung
• (who): European Regional Science Association (ERSA)
• (where): Louvain-la-Neuve
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/117821
• Last update: 10.03.2025, 11:42 AM CET