The paper examines the pattern of regional convergence and the determinants of regional growth in Europe, providing a discussion of the issues that are of relevance to the theoretical conceptions and the subsequent design of regional development policy, supported by an illustrative empirical analysis. The analysis covers 249 NUTS II regions of the European Union in the period 1990–2003. Using as its basis the standard framework of (absolute) β-convergence, the paper detects a mirror-image J-shaped relationship between regional growth and regional development levels. This type of relationship indicates that regional divergence factors are getting stronger, and, eventually, dominate, at more advanced levels of development. On the basis of a regional growth model, factors such as agglomeration economies, geography, economic integration and economic structure seem to create an overall unfavourable economic environment for lagging (and, possibly, less favoured) regions. Such an environment generates dilemmas and questions concerning the mix of policies that may promote growth and at the same time reduce regional inequalities in the European Union.

The paper studies the role of path-dependence in the resilience of EU regions. Particularly, employing a nonparametric analysis, the paper demonstrates that historical adjustments of EU regions materialized by productivity improvements, primarily in the manufacturing sector and incidentally in the sectors of construction, financial and non-market services, during the period 1995–2008 secured high(er) levels of regional resilience during the economic crisis period 2008–2013. Such a finding provides implications not only for theory but also for policy. Policies aiming at boosting regional productivity and competitiveness, which through a positive regional performance of high growth rates is concealed, a well-structured and robust production restructuring, might affect regional resilience in a way that shields regional economies not only from current imbalances but also from any future downturns.

Peripheral European economies are often characterized by unfavorable structural regularities and geographical coordinates, making the process of economic integration an experience possibly associated with welfare losses at the regional level. Such types of arguments are at variance with the neoclassical understanding of the operation of the spatial economy, making the study of a weak industrial base in the EU periphery an interesting assignment with implications for theory and policy. We develop an empirical model accounting for industrial (manufacturing) growth and decline in the Greek regions in the period following EU membership (1981–2005). Given that Greek regions are characterized as lagging behind and structurally weak for the entire period under consideration, understanding the factors behind their industrial experience may have a value added for many regions with similar characteristics, especially in the new and potential EU member states.

This research analyses the effects of international trade, relative specialization and regional industrial structure on Greek regional employment growth over the 1995-2003 period. For this purpose, it employs trade-adjusted shift-share analysis, along with linear model extensions. The results obtained highlight the importance of local conditions and regional deviations from business cycles and sectoral trends. Relative regional specialization has, on average, a positive effect on regional employment growth. The direction of industry-mix effects depends on specializing on growing or declining sectors. Imports have negative employment effects; the exports' positive effect is weak and domestic demand remains an important positive factor. Copyright (c) 2009 the author(s). Journal compilation (c) 2009 RSAI.