Regional Divergence versus European Convergence with Special Emphasis on the Northern Hemisphere

Abstract

We analyze different patterns of economic development in Europe, and particularly in the Nordic and Baltic hemisphere based on an assessment of interregional and intraregional growth and trade performance. The central hypothesis is that large intraregional disparities do not necessarily lead to lower economic growth on a national level than smaller disparities do. We examine the pattern of regional convergence within all EU-countries. The Baltic Region is divided into East Baltic region and West Baltic region. We observe overall convergence. At the national level, divergence is frequently observed in the Baltic hemisphere. Regarding trade hypothesis of trade, a close relation to the level of income is found. Finally, we discuss and evaluate the impacts on economic growth and competitiveness in the Baltic and Nordic hemisphere.