The impact of economic crisis on regional disparities and the allocation of economic branches in Greek regions

Abstract

Abstract The objective of this paper is to analyse the changes that occurred in the regional disparities and sectoral specialisation of the Greek regions due to the economic crisis. The research problem is to identify the effect that the crisis had on the developmental perspectives of the regions and on regional policy priorities. In this framework, we explore the regional disparities, along with the allocation and specialisation of economic sectors in two separate time periods: the pre-crisis period (2000–2007) and the crisis period (2008–2014). The variable used is regional employment in the branches of economic activity. The methods used are Coefficient of Variation, Location Quotients and Shift-Share Analysis. According to the results, we classify the spatial units into categories and we propose means of regional policy. The results show that the disparities increased during the first period of the crisis and declined in the next, without, however, reaching the levels of 2000. In the first period the dynamic economic sectors are concentrated mainly in the metropolitan region of Attica and in the island region of South Aegean, while local advantages are shown in several regions except Attica. During the period of crisis, Attica and South Aegean lost their sectoral dynamism, while a few regions resisted. Regarding the local share effects, the more urbanised regions show negative local shares. The rest of the regions exhibit local advantages. Thus, according to these results, a concluding remark is that the more traditional activities seem to be more resilient, unlike the modern activities, which seem more sensitive to the crisis and are located mainly in the large cities and the most urbanised regions of the country. Regarding the proposed regional policy means, infrastructure improvement is indicated for most of the urbanised regions in order to improve their developmental environment. For the other regions, a more balanced sectoral structure must be promoted. Of course, in order to propose more targeted policy measures, it is important that regional development features (according to the classification of the regions and the proposed policy measures) be adapted to smaller areas and to a greater number of narrower economic sectors, rather than simply applying them at the regional level. This is also true of the effect that some other factors such as human capital and innovative capacity have on regional resilience. Future research will focus on this.