Location of Services in Mediterranean Countries and NMS

Abstract

Based on New Economic Geography theory, this paper aims at highlighting location of services industries in Mediterranean Partner Countries (MPC) at comparing it with the location of these services in the EU15 and NMS and at assessing whether or not agglomeration economies were its cause. Therefore, we rely on Gini coefficient to measure the degree of concentration and analyse the actual and potential effect of the Euro-Mediterranean Partnership. Services appear more evenly distributed inside trade areas (EU15, NMS and MPC) than within the Euro-Mediterranean zone: convergence is much slower there. Concentration is time-decreasing when the EU is included. Financial intermediation and business services are the most agglomerated activities. Location of services diverges between the EU and NEPC (Neighbourhood European Policy Countries). Labour-intensive business services predominate within the NEPC, whereas high value-added services are still poorly implemented there. The MPC have not yet begun to catch up with the EU15 or with the NMS. Insofar as key enabling services develop by waves, some southern Mediterranean countries may lag behind others. The EC should carefully seek to avoid such increases in inequalities within the MPC.