Explaining Regional Disparities in Central and Eastern Europe

26 Pages Posted: 5 Jun 2018

See all articles by Sheila Chapman

Sheila Chapman

LUMSA University

Valentina Meliciani

LUISS Guido Carli University - LUISS Business school

Date Written: July 2018

Abstract

The paper analyses the determinants and the evolution of income disparities across regions within Central and Eastern European Countries (CEECs) over 1991–2011. We add to the literature in different ways. First, we adapt the categories that Rodriguez‐Pose used for studying convergence among old EU members to CEECs regions. This allows us to assess the relevance of geo‐sectoral groups (urban areas, old industrialized areas and peripheral areas) for newcomer regions. Second, we introduce a new category, that of ‘successful Foreign Direct Investment (FDI)‐based restructuring’ in order to capture regions that, often through considerable FDI, manage to reconvert their old industrial base. We then analyze whether this group helps understand catching‐up/falling behind processes in CEECs. We test the relevance of these groups by means of both non‐parametric and spatial regression analyses. We find that they help explain the increase in within‐countries’ regional disparities especially after the turn of the century.

Keywords: Regional disparities, Central and Eastern European Countries, geography, specialization, structural change, foreign direct investment

Suggested Citation

Chapman, Sheila and Meliciani, Valentina, Explaining Regional Disparities in Central and Eastern Europe (July 2018). Economics of Transition, Vol. 26, Issue 3, pp. 469-494, 2018. Available at SSRN: https://ssrn.com/abstract=3190749 or http://dx.doi.org/10.1111/ecot.12154

Sheila Chapman (Contact Author)

LUMSA University ( email )

Valentina Meliciani

LUISS Guido Carli University - LUISS Business school ( email )

Viale Pola 12
Rome, 00198
Italy

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