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Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary

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  • Anna Iara
  • Iulia Traistaru

Abstract

This paper investigates the impact of market integration on regional production structures and regional growth differentials in Hungary over the period 1994-2000. Our analysis indicates a relocation of manufacturing towards border regions, in particular towards regions bordering the European Union. On average, regional manufacturing specialization increased. We find a positive relationship between knowledge spillovers proxyed with a measure of foreign direct investment intensity and regional growth as well as between regional manufacturing specialization and regional growth. The change in regional specialization is also positively related to regional growth. Our empirical results show that on average, other things equal, high growth rates are associated with high initial levels of GDP per capita. This finding shows up even when controlling for regional economic structures, change in manufacturing specialization, the degree of openness and geographical proximity to western markets. Our research suggests that in the first stage of market integration divergence forces tend to prevail leading to relative winners and losers across space. Key words: Economic integration, Location of economic activity, Regional growth JEL Classification: F15, R11, R12

Suggested Citation

  • Anna Iara & Iulia Traistaru, 2004. "Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary," ERSA conference papers ersa04p298, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa04p298
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    Cited by:

    1. Soltwedel, Rüdiger & Krieger-Boden, Christiane, 2007. "The impact of European integration and enlargement on regional structural change and cohesion: EURECO. Final report," Open Access Publications from Kiel Institute for the World Economy 4243, Kiel Institute for the World Economy (IfW Kiel).
    2. Vasile Alecsandru STRAT & Oana Cristina POPOVICI, 2015. "FDI Convergence versus Real and Structural Convergence at the EU Level. An Approach Based on the GINI Coefficient," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 18(1), pages 150-162, June.
    3. Csáki, Csaba & Fogács, Csaba (ed.), 2008. "Agricultural economics and transition: What was expected, what we observed, the lessons learned. Proceedings (Volume II)," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 44, number 92319, September.
    4. Vassilis Monastiriotis, 2014. "Regional Growth and National Development: Transition in Central and Eastern Europe and the Regional Kuznets Curve in the East and the West," Spatial Economic Analysis, Taylor & Francis Journals, vol. 9(2), pages 142-161, June.
    5. Francisco Diniz & Maria Teresa Sequeira, 2015. "Portrait Of Portugal’s Nut Iii Regions In Productive Location Clusters," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 104-114.
    6. Anna Iara, 2005. "Regional growth in Hungary - The impact of European economic integration," ERSA conference papers ersa05p342, European Regional Science Association.
    7. Vassilis Monastiriotis, 2011. "Regional Growth Dynamics in Central and Eastern Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 33, European Institute, LSE.
    8. Rita De Siano & Marcella D'Uva, 2010. "Specialization and growth in Italy: what spatial econometric analysis tells us," Discussion Papers 1_2010, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    9. Thiess Büttner & Peter Egger & Peter Huber & Anna Iara & Michael Pfaffermayr & Johannes Rincke & Yvonne Wolfmayr, 2004. "The Impact of Integration on Wages and Employment in Border Regions," WIFO Studies, WIFO, number 25326.

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    More about this item

    Keywords

    economic integration; location of economic activity; regional growth jel classification: f15; r11; r12;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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