Daniela-Luminita Constantin (p)

George Petrakos

In a Europe suffering from a ‘geography of discontent’, the future of the Cohesion Policy and the European growth model point to the need of deeper integration of place-based and people-based approaches, in accordance with the spatial justice desideratum (IMAJINE, 2022) as well as to the ambition “to bring EU closer to citizens and to leave no one behind” (EC, 2023, p.5). When social cohesion challenges are focused on, attention is drawn to a large share of the EU population that is at risk of poverty or social exclusion “often in the poorest regions of the EU but also in and around rich urban agglomerations” (EC, 2023, p.5). Starting from these overall considerations, this paper brings into spotlight the question of the poverty pockets in the Bucharest-Ilfov region – the capital region of Romania, which represents a relevant case taking into consideration that, on the one hand, it is one of richest NUTS 2 regions in the EU, while, on the other hand, when it comes to the share of people at risk of poverty or social exclusion, Bucharest-Ilfov has a rate which, even if it is below the EU average and much lower than the average in Romania, it is by far higher than in other capital regions in Central and Eastern Europe. The research methodology is based on an in-depth analysis which combines the interpretation of the available statistical data with the examination of relevant national and EU documents, reports, the ex-post evaluations of the previous regional operational programmes and a critical assessment of the on-going regional programme and, last but not least, interviews with decision-makers, experts, researchers, etc., seeking for answers to questions regarding: the situation of the poverty pockets in Bucharest-Ilfov in the last 15 years, since Romania’s accession to the EU; the obstacles that impeded to take full advantage of the opportunities provided by the EU funding; the role played by institutional actors; the involvement of local communities; the messages for the regional programme 2021-2027; the synergies between the regional programme and other operational programmes that can support the most disadvantaged areas and social groups, etc. The conclusions can provide useful lessons to be shared with other capital regions confronted with the concerning issue of the poverty pockets and, on this basis, can contribute to enriching the empirical evidence for the orientation towards a Cohesion Policy able “to deliver improved well-being for all” (Rodriguez-Pose, 2022).

Iulia Siedschlag, Juan Duran Vanegas (p)

Daniela-Luminita Constantin

Theoretical models and international evidence have established that foreign direct investment is associated with new technologies, productivity gains, higher wages and wage inequality in the host countries. While most existing studies on foreign direct investment and wage inequality have examined relative wages across skills, occupations and sectors, recent contributions to the theoretical and empirical literature highlight the role of wage dispersion between firms as an important driver of overall income inequality. Understanding what drives wage dispersion between firms across EU regions is thus important for designing policy measures aimed at reducing overall economic, social and spatial inequalities in the European Union. Against this background, this research paper examines wage dispersion between firms across EU regions and the role played by multinational firms with dominant market shares (i.e., market power) within their industry, the so-called “superstar firms”. Firstly, the analysis documents the evolution of wage dispersion between firms and the emergence of multinational superstar firms in Europe at various levels of aggregation (sectoral, regional, national and European). Second, we empirically investigate the role of multinational superstar firms as a driver of wage dispersion between firms across EU regions. The analysis uses firm-level data from the ORBIS Europe data set over the period 2012-202. The econometric methods to identify causal effects include panel data estimation techniques and instrumental variables.

George Petrakos (p), Paschalis Arvanitidis, Spyros Niavis, Alexandra Sotiriou, Maria Tsiapa

Juan Duran

Inequality refers to the allocation of resources among individuals, social groups and places in unfair contexts. It is typically defined as excessive variation in levels of welfare measured by some indicator. Although there are scholars who manage to distinct between fair and unfair inequality, still, scant attention has been paid to the distinction between desirable diversity and inequality. The existing literature does neither indicate at which point differentiation becomes a problem, nor does it provide any criteria to decide what is the critical tolerance level after which socially desirable diversity turns into undesirable inequality.
The paper intends to examine the dialectic relation between diversity and inequality under different market, institutional and social arrangements. It will examine to what extent this relationship and the definition of inequality depends on business cycles, development levels, theoretical, political, cultural or ideological perspectives and expectations.
Related to the definition is the challenge of measuring inequality. Inequalities in their various types (related to outcomes, opportunities, membership, treatment) and dimensions (social, economic, intergenerational, spatial, perceptional) are interrelated to each other in a variety of ways. At the same time their valuation may be subject to judgements arising from different social and cultural contexts. In this respect, the paper will provide a framework that will allow for multidimensional measures and definitions of inequality that are consistent with each other and along social groups and spatial scales.
To the extent that inequality is defined as excessive, or undesired variations in levels of welfare, a critical question is how to assess the tolerance threshold beyond which desirable diversity turns into undesirable inequality at all levels of aggregation. This tolerance threshold is subjective and varies across types and dimensions of inequality. It may additionally depend on the market, institutional, or social arrangements, the level of development, the cultural perspective, expectations or even the business cycle.
The paper will use Questionnaire Survey data and Eurostat Statistics in order to shed new light on the nature and evolution of the dipole diversity-inequality and its tolerance thresholds with the use of functional, conditional or non-linear models. It will also test to what extend spatial inequality affects national performance, to what extend regional development gaps affect catching up, or to what extent economic inequality is a function of diversity in terms of population characteristics (e.g immigrants or other types of initial conditions), or to what extent and after which level inequality and/or diversity affect growth.