Naslov
Effects of specialization on income convergence in Croatian counties

Autori
Bačić, Katarina

Vrsta, podvrsta i kategorija rada
Sažeci sa skupova, sažetak, znanstveni

Izvornik
Diverse Regions: Building Resilient Communities and Territories / - : Regional Studies Association, 2014, 9-9

ISBN
978-1-897721-47-6

Skup
Diverse Regions: Building Resilient Communities and Territories

Mjesto i datum
İzmir, Turska, 15.06.2014. - 18.06.2014

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
Croatian regions; income growth path; regional specialisation; employment structure

Sažetak
Sectoral transformation in European transition economies has been inevitable. The process was driven mostly by deindustrialisation and increasing tertiarisation and coupled with the countries’ integration into the international trade and investment flows. Croatia is no exception to this scenario. Relaying on the policy idea that FDI will bring about positive spillovers and eventually raise the rate of growth prove unfounded as the bulk of investment flows into the services sector in the capital city with little effect on other sectors and regions. Ten years following the onset of transition, country is constituted of 21 counties or NUTS level III with the capital city forming a metropolitan region, and the country is strategically headed towards the EU integration. Deindustrialisation becomes apparent throughout the transition period as a continuation of widening structural weaknesses that have taken root as early as 1980es with no persistence in investment policy to slow down the trend or support a reversal. In 2000, when the data for Croatian regions becomes available, using hierarchical cluster analysis, four clusters of counties are identified for their distinct sectoral characteristics and the level of development. The capital city region is services-oriented, along with two more counties in the Adriatic region and they are the most prosperous counties. Counties are clustered geographically, and a specific form of clusters-concentric circles formed around the capital point to its economic influence. Clusters also followed the four major cities pattern, reinforcing the role of these cities as historical development hubs of Croatian regions. Using the same procedure for 2011 yields a different structure of counties and this can be taken as an indication of further structural transformation. The capital’s sectoral transformation towards specialisation in services is unparalleled to the rest of the country and the capital grows faster. Industry-oriented cluster splits into two new clusters with diverging performance, pointing to both unresolved structural weaknesses and to the rise of new entrepreneurial activity in this sector. Most-specialised counties are mostly specialised in industry and agriculture and remain so throughout the period, but simultaneously, more urban counties increase their specialisation in services. The result of the specialisation dynamics is that sectoral structure among counties is becoming less similar on average. Further on, industry- and agriculture-oriented clusters have proven more vulnerable in the recession period. A number of statistical and econometric techniques are employed to overcome the weakness of the data, with the purpose to establish whether a common growth pattern between counties exists and if it can be linked to the changes in the economic structures. Results show that counties follow their individual growth path. Within-cluster convergence is more likely than the within-counties convergence, and this finding resembles the club convergence. This can be extended to the results on the interrelatedness of sectoral structures and income growth path that have shown mixed. Counties with similar sectoral structures both are positively and negatively correlated in income growth patterns, suggesting that a number of counties with similar sectoral structures are sharing a common growth path and that a number of them diverge in economic performance and in development levels. Unobserved factors that can be accounted for these results may be lack of restructuring, intrinsic characteristic of activities and branches within sectors, differences in factor endowments and regional development policies.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA