Regional Growth Paths and Resilience: A European Analysis

TLDR

Studies suggest that long‑run growth paths may influence how regions respond to shocks, yet little is known about which trajectories foster resilience. The study investigates how regional and national growth trajectories relate to regional resilience by clustering regions by growth path similarity, assessing national influence, and classifying resilience to the 2007–2008 crisis. Using a novel clustering approach, the authors grouped regions by growth path similarity, quantified national growth’s influence on regional growth, and classified regions’ resilience to the 2007–2008 crisis. The analysis finds that regions possess distinct long‑run, path‑dependent trajectories linked to industrial employment shares and resilience outcomes, that national trajectories strongly shape these paths, and that higher employment in demand‑stable sectors predicts more stable growth and greater resilience.

Abstract

Research highlighting the differential resilience of economies to shocks opens up the possibility that long-run growth paths are associated with how regions cope with and recover from such shocks. To date, however, there has been limited exploration into whether long-run evolutionary growth paths or trajectories influence regional economic resilience and what types of trajectories might be more associated with resilience. This article explores the connections between regional economic resilience and regional and national growth trajectories by utilizing a novel set of methods to group regions according to the similarity of their growth paths, identifying the relative importance of national growth for regional growth, and categorizing regions according to their resilience to the 2007–2008 economic crisis. The results suggest that regions have empirically identifiable long-run and path-dependent development trajectories that are significantly associated with industrial employment shares and observed resilience outcomes. Critically, however, these regional growth paths are significantly shaped by national trajectories. Furthermore, regions with greater employment shares in sectors that are less susceptible to demand fluctuations are likely to experience more stable growth rates and be more resilient to economic downturns. This has implications for understanding the importance of evolutionary trends and specifically the role of national contexts and industrial legacies in shaping regional resilience.