INCOME DISPARITIES IN THE ENLARGED EU: SOCIO‐ECONOMIC, SPECIALISATION AND GEOGRAPHICAL CLUSTERS

Abstract

ABSTRACT The paper contains a non‐parametric analysis of regional convergence in the enlarged EU over the period 1998–2005. It finds overall convergence but growing within country disparities, especially due to the behaviour of newcomer regions. It also finds strong (but falling) spatial correlation of per‐capita income. Starting from this evidence, the paper considers the role of socio‐economic features, specialisation patterns and geographical factors in explaining within countries disparities. Overall we find that partly specialisation but more evidently socio‐economic clusters have a good explanatory power while simple geographical factors do not explain within countries divergence. This does not mean that spatial factors are not important: rather it means that agglomeration alone cannot explain a complex and variegated pattern of growth where structural and socio‐economic factors appear to be playing an important and increasing role.