EU integration and the geographies of economic activity: 1985–2019

Eleonora Cutrini, Ben Gardiner and Ron Martin
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Eleonora Cutrini: Department of Economics and Law, University of Macerata, Macerata, Italy
Ben Gardiner: Cambridge Econometrics, Cambridge, UK
Ron Martin: Department of Geography, University of Cambridge, Cambridge, UK

Environment and Planning A, 2023, vol. 55, issue 2, 274-302

Abstract: One of the central predictions of the new economic geography (NEG) is that the removal of trade barriers and other such frictions should lead to the geographical concentration and specialisation of economic activity, both between and within nations. This prediction has been used to argue that as the European Union becomes more integrated, economic activity would become more regionally concentrated and specialised. Using relative entropy measures applied to a new regional data set for the period of 1985–2019, this paper finds that between 1985 and 2000 localisation and specialisation between European countries increased to some extent but with a widespread fall in specialisation and concentration within countries. After 2000, and particularly after 2007 and the Global financial Crisis, the spatial distribution of economic activities in Europe appears to have become more complex, with some degree of concentration, agglomeration and specialisation both across and within countries. Overall, however, we find little long-run support for the NEG prediction.

Keywords: Geographical concentration; geographical specialisation; relative entropy measures; European Union (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:55:y:2023:i:2:p:274-302

DOI: 10.1177/0308518X221127028

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