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  • 7/28/2019 Impact Liberalisation

    1/132

    The impact of globalisation and increased trade liberalisation on European regions

    Final Report

    1

    The impact of globalisation andincreased trade liberalisation on

    European regions

    Study for DG Regio

    Final report

    IGEAT ULBPolitecnico di Milano

    UMS Riate

    December 2008

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    The impact of globalisation and increased trade liberalisation on European regions

    Final Report

    2

    Table of Contents

    Table of Figures ..........................................................................................................3Tables ..........................................................................................................................4Abstract.......................................................................................................................6Executive summary ....................................................................................................8Introduction............................................................................................................... 171. Vulnerable sectors................................................................................................ 19

    1.1. The vulnerable sectors according to international trade .................................................. 19

    1.2 Identifying Europe's vulnerable sectors............................................................................ 23

    1.3. The relationship between sectoral growth and external competition............................... 27

    2. Vulnerable regions................................................................................................333. Spatial diversity of performances regarding vulnerability................................. 37

    3.1. The impact of trade on economic growth at national level.............................................. 37

    3.2. The impact of regional specialization in vulnerable sectors on regional economic

    performances........................................................................................................................... 403.2.1. The Effects of Regional Specialisation on the Performance of Vulnerable Sectors. 40

    3.2.2. The impact of regional specialization in vulnerable sectors on global regional

    performances ...................................................................................................................... 45

    3.2.3. Classifications of vulnerable regions according to their economic performances ... 53

    3.3. The evaluation of the social consequences of vulnerability to global competition ......... 61

    4. Success factors of vulnerable regions................................................................ 664.1. Structural features of vulnerable regions ......................................................................... 66

    4.2. Success factors of vulnerable regions through regression analysis ................................. 69

    4.3. Qualitative factors of success of vulnerable regions through case studies ...................... 73

    4.3.1. Main structural features of the vulnerable regions ................................................... 73

    4.3.2. Marshallian textile districts ..................................................................................... 74

    4.3.3. Old industrial metal regions ..................................................................................... 764.3.4. Innovative electric and electronic regions .......................................................... 79

    4.3.5. Exogenous development regions .............................................................................. 80

    4.3.6. Conclusions .............................................................................................................. 82

    4.4 Typology of vulnerable regions according to risk ............................................................ 84

    5. Prospective analysis: regions at risk ..................................................................895.1. General scenario assumptions.......................................................................................... 89

    5.2. Scenarios description ....................................................................................................... 96

    5.3. Scenario results .............................................................................................................. 102

    5.3.1 Aggregate results ..................................................................................................... 102

    5.3.2. Baseline scenario .................................................................................................... 105

    5.3.3. Scenario A - An aggressive Europe in a high-quality competitive world .............. 110

    5.3.4. Scenario B - A defensive Europe in a price-competitive world ............................. 1125.4. Disentangling the specific effects behind general trends............................................... 118

    5.5. Main findings for the vulnerable regions....................................................................... 126

    6. Conclusion.......................................................................................................... 1286.1 Major scientific conclusions ........................................................................................... 128

    6.2 Major policy conclusions................................................................................................ 130

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    The impact of globalisation and increased trade liberalisation on European regions

    Final Report

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    Table of Figures

    Figure 1. The space-time diffusion of textile in the Euro-Mediterranean space ........... 21Figure 2. Evolution of the EU-27 external balance trade (in millions Euros) in theindustrial NACE sectors, from 1999 to 2006. ..............................................................26Figure 3. Evolution of the ratio (%) between imports and GVA for EU-27, by NACEsector, 1999-2005....................................................................................................... 26Figure 4. International competition and employment growth by sector in EU27 between1999 and 2005............................................................................................................29Figure 5. International competition and added value growth by sector in EU27 between1999 and 2005............................................................................................................29Figure 6a. Typology of the vulnerable regions according to the sectoral component ofvulnerability, in 2002. NUTS2-NUTS3 version............................................................. 35

    Figure 6b. Typology of the vulnerable regions according to the sectoral component ofvulnerability, in 2002. NUTS2 version ......................................................................... 36Figure 8. The relationship between value added growth and specialization in vulnerablesectors........................................................................................................................ 44Figure 9: Typology of regions used for the analysis and basic statistical description ofthese combinations.....................................................................................................48Figure 10. Impact of vulnerable sectors on GDP growth, without control for nationaltrends (1995-2004) .....................................................................................................50Figure 11. Impact of vulnerable sectors on GDP growth, with control for national trends(1995-2004) ................................................................................................................50Figure 12. Impact of vulnerable sectors on industrial employment growth, with controlfor national trends ....................................................................................................... 52

    Figure 13a. Typology of vulnerable regions according to economic performances andsectoral specialization, 1995-2004. NUTS2/NUTS3 version........................................ 54Figure 13b. Typology of vulnerable regions according to economic performances andsectoral specialization, 1995-2004. NUTS2 version. ................................................... 55Figure 14. Industrial growth patterns of vulnerable regions 1995-2002 .................... 57Figure 15. Industrial growth patterns of vulnerable regions 1995-2002. NUTS2....... 58Figure 16. Structural features associated with each industrial growth pattern ............. 59Figure 17. Typology of vulnerable regions according to the structural features related tosuccess.......................................................................................................................87Figure 18. The structure of the new MASST model (source: Capello and Fratesi, 2008)...................................................................................................................................92Figure 19. Future alternative trajectories in globalisation patterns............................... 93

    Figure 20. Future alternative trajectories for European member States strategies ...... 94Figure 21. Future alternative trajectories for European Commission strategies........... 94Figure 22. The selected scenarios..............................................................................95Figure 23. Average annual GDP growth rate 2005-2020 Baseline scenario........... 107Figure 24. GDP per person in 2020 Baseline scenario...........................................