J. Andrés Faíña

Does distance matter for determining regional income in the European Union? An approach through the market potential concept

This paper focuses on the relationship between market potential and income for the European Union (EU) regions over the period 1982–1999. It is proved that closeness to large consumer markets or in other words, market potential, is an important explanatory variable for regional income in the early 1980s, but it has decreased its significance in determining EU regions income in the 1990s. Thus dynamic income regions have also emerged in the EU periphery, and need not necessarily be close to rich regions.

Market access and human capital accumulation: the European Union case

This study evaluates the role that market access plays in determining the spatial distribution of educational attainment levels among EU regions. Evidence is provided showing that in the EU educational attainment levels are higher in those regions with greater market access. This finding proves that remoteness is a penalty for the economic development and convergence of the European Union regions.

The Economic Geography of EU Income: Evolution Since the Eighties

This paper evaluates the role that geography plays in determining the spatial distribution of EU income. We argue that geography matters for income disparities among EU regions, providing evidence that the geography of access to markets is statistically significant and quantitatively important in explaining cross-regions variation in EU per capita income. However, we also proved that its explanatory power in the levels of EU per capita income has been decreasing since the eighties. Thus, dynamic income regions have also emerged in the periphery, and need not necessarily be close to rich regions.

Objective 1 regions versus non-objective 1 regions. What does the Theil Index tell us?

The evolution of regional income disparities between two blocks of regions, objective 1 regions and non-objective 1 regions is analysed for the period 1982 to 1997, by using a Generalized entropy index such as the Theil index. The results show that between 1982 and 1987 the income disparities between objective 1 regions and non-objective 1 regions have increased, while from 1987 onwards objective 1 regions catch up with the non-objective 1 regions.

Regional Development and Structural Change: The Productivity Paradox of Spanish Peripheral Regions

Spanish objective 1 regions are mainly peripheral regions which traditionally have suffered from low accessibility to the main markets and low levels of education and entrepreneurial and management capacities. Once Spain became member of the EU the combined effects of competition in the so called “single” European market and the investments in transport and accessibility infrastructures as well as in education (tertiary education, vocational training and compulsory secondary education from 1994 onwards) boosted regional development in Spain. Spanish objective 1 regions have experienced a very important structural adjustment and a noticeable process of convergence with Europe. The effect of competition of the Central and Eastern European countries, putting aside the changes in the FDI flows, has not had an immediate impact on the Spanish regions. After joining the euro in 1999, the possibilities of generous funding at very low interest rates generated a very fast growth process during the 2000s. This growth cycle was mainly of the “extensive” type, boosted by a real state bubble which originated a huge expansion in the housing sector followed up by important increases in low productivity job creation. The competitive disadvantages of the Spanish regions have shown they side effects with the financial crisis, the burst of the real state bubble and the subsequent recession since the beginning of 2008 to the present times. The limitations of the structural change in the 2000s has placed the Spanish objective 1 regions in a very weak position to face the competition arising from other areas and countries with lower salaries and has deepened the consequences of the current crisis with unemployment levels close to 30%.