The Effects of Integration on Regional Disparities: Convergence, Divergence or Both?

53 Pages Posted: 15 Mar 1999

See all articles by Mariassunta Giannetti

Mariassunta Giannetti

Stockholm School of Economics; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swedish House of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: February 1999


In this paper, I identify some stylized facts characterizing regional evolution in Europe during the eighties. In particular, I provide evidence of the existence of convergence clubs based on regional specialization. Afterward, I give an explanation of this empirical evidence based on the process of deeper integration and the different specialization of European regions. In my model, I explore the effects of integration between two symmetric countries characterized by strong regional disparities that originate from a lower productivity in the high-tech sector. If regions with different industrial structure do not benefit in the same measure from international knowledge spillovers, economic integration exacerbates disparities among the regions of a country, even if it accelerates growth and brings convergence between countries. Moreover, regions with a consistent high-tech sector grow faster and converge even if they have initially different productivity levels.

Note: Dr. Giannetti will be at the Banca d'Italia in late April or early May 1999; before that time she can be reached at the Dept. of Economics, UCLA,

JEL Classification: O52, O41, O18, F15, F4

Suggested Citation

Giannetti, Mariassunta, The Effects of Integration on Regional Disparities: Convergence, Divergence or Both? (February 1999). Available at SSRN: or

Mariassunta Giannetti (Contact Author)

Stockholm School of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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European Corporate Governance Institute (ECGI)

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Swedish House of Finance ( email )

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