International vs. Intra-national Convergence in Europe - an Assessment of Causes and Evidence

The article aims to explain the different patterns of economic development in Europe based on an assessment of regional and national performance with regard to innovation, entrepreneurship and difference in the industrial structure. The central hypothesis of the paper is that large intra-regional disparities do not necessarily lead to lower economic growth on the national level than smaller disparities do. On the contrary, the polarization of economic activities can lead to excess growth in some cases, and contribute to a process of convergence between nations. To address the mechanisms behind this process, the long run patterns of convergence and disparities in regional economic performance with regard to GDP and the distribution of employment are analyzed on the regional and the national level for selected European countries. The paper focuses on the apparent contradiction between increasing intra-national disparities on the regional level in most industrialized countries and the overall tendency toward convergence on the national level in Europe and tries to provide some tentative explanations based on empirical as well as theoretical considerations.