Competitive network positions in trade and structural economic growth

In this paper, the authors identify two components of European regional economic growth: demand-led growth due to growing export markets and structural growth due to growing market shares in those export markets. Of these two, only structural growth, on average ca. 20% of total growth, is potentially affected by regionally varying locational characteristics. The largest part of regional economic growth (80%) is determined by demand-led growth and cannot be influenced by the region itself.

Applying a neo-classical regional growth model using geographically weighted regression, the paper shows that the degree of revealed competition in trade and services between sectors in a region moderates structural growth in that region. Regions operating on similar international markets share favorable structural growth prospects, with locational determinants playing a more – albeit still limited – significant role due to similar externalities. This emphasizes the importance of region and sector specific regional markets as determinants of regional economic growth. Recently advocated place-based development strategies of European regions are therefore important but should be complemented with competitive regional network strategies.

Authors

Mark Thissen (PBL), Thomas de Graaff (VU University Amsterdam) and Frank van Oort (Erasmus University Rotterdam)

Specifications

Publication title: Competitive network positions in trade and structural economic growth
Publication date: 29 March 2016
Publication type: Publication
DOI: http://dx.doi.org/10.1111/pirs.12224
Magazine: Regional Science
Product number: 2051