Prof. Hasan Engin Duran, Prof. Ugo Fratesi (p), Prof. Robert Hassink

The term “shock” often represents negative (sudden) externalities in the economic literature. The unexpected rise of disequilibrating forces in output, labor or capital markets might trigger economic turbulence (Lütkepohl, 2008; Margalit, 2019). The shocks, however, are not bound with negative ones. On the other side of the coin, economies may also face positive externalities. Such technological advancements, discovery of new products or processes, i.e. digital transformation, productivity jumps, and unanticipated expansionary policies may represent some of them (Boschma, 2015; Martin, 2018). However, the empirical literature largely fails to consider the resilience with respect to positive shocks. This paper investigates the geographical patterns and determinants of positive resilience of Chinese provinces with respect to the productivity jump that occurred during the first decade of the Millennium. The dataset is obtained from NBS, OECD, World Bank and PWT websources (Feenstra et al. 2015). Having applied a range of empirical tools, such as Markov-Regime Switching Regressions, Panel Unit Root Tests, Panel Lagrange Multiplier Tests, Hausman Test and Spatial Panel regressions, we reach two main results (Anselin, 1988; Hamilton, 1989; Levin et al. 2002; Anselin et al. 1996; Millo and Piras, 2012; Baltagi, 2013a; 2013b; Elhorst, 2014a; 2014b; Bivand et al. 2021) First, resilience behavior of provinces with respect to the productivity jump is spatially very heterogeneous, in both initial response (transition capability) and post-shock behavior (positive adaptability). Second, we provide a set of strong evidence showing that the industrially specialized provinces benefit more from the productivity increase rather than specializations in services and agriculture sectors. This most likely arises from productivity gains through the Marshallian externalities; internal economies of scale, localization economies, agglomeration externalities, intra-industry knowledge spillovers, process and product innovation

Prof. Vinko Mustra (p), Prof. Blanka Šimundić, Dr. Zvonimir Kuliš

The concept of the regional development trap has recently gained recognition in the literature, identifying regions that struggle to sustain economic dynamism relative to their national and European peers (Iammarino et al., 2020; Diemer et al., 2022; Rodríguez-Pose et al., 2024). A regional development trap occurs when a region experiences persistent stagnation in income, productivity, and employment, struggle to sustain economic dynamism relative to their national and European peers (Iammarino et al., 2020; Diemer et al., 2022). While prior researchers have identified the structural and institutional determinants of development traps (Iammarino et al., 2020; Diemer et al., 2022), the relationship between these traps and a region’s capacity for resilience during turbulent periods remains underexplored.
Understanding the dynamics of regional development traps is crucial, as their persistence can lead to widening territorial disparities, economic discontent, and long-term stagnation (Iammarino et al., 2020; Diemer et al., 2022; Rodríguez-Pose et al., 2024). Without effective interventions, development-trapped regions risk falling further behind, exacerbating socio-economic inequalities and fueling dissatisfaction with national and EU-level policies (Rodríguez-Pose et al., 2024).
This paper addresses this gap by investigating how regional economic resilience influences the likelihood of falling into or escaping a development trap. A region’s ability to withstand, adapt to, and recover from economic shocks has significant implications for its long-term development trajectory. This issue has become even more pressing as we are experiencing periods of more frequent and intense shocks—ranging from financial crises and trade disruptions to pandemics and geopolitical conflicts—placing additional strain on regional economies. In this context, resilience plays a preventive role by helping regions avoid stagnation and a corrective role by facilitating recovery for those already trapped.
Our empirical analysis of NUTS 2 regions in the EU finds that higher levels of economic resilience represent a significant positive determinant for escaping a regional development trap. These findings highlight the need for policymakers to adopt forward-looking strategies that enhance regional resilience rather than relying solely on remedial policies. Strengthening resilience can serve as a crucial mechanism to counteract the growing divide between dynamic superregions and left-behind areas in Europe, helping to prevent long-term economic stagnation and the rise of territorial inequalities.

Prof Paolo DI Caro, Prof. Federico Fantechi, Dr. Paolo Ferrara (p), Prof. Ugo Fratesi

Resilience refers to the ability of countries and regions to effectively handle crises, adapt, and swiftly return to stability, a key topic in worldwide economic debates. In the past fifteen-plus years, different shocks – Great Recession; Covid-19 crisis; Ukraine-Russian war; inflation surge – have produced hard consequences on societies and economies with uneven patterns across people and places. To understand the overall impact of the crises and, in particular, the factors behind the different spatial trajectories observed during and after shocks, the decade-old concept of regional economic resilience has regained popularity among researchers and practitioners. The fast-growing resilience literature, however, has primarily used data at regional level and made comparisons across territories with different economic levels. What is missing is the analysis of resilience trajectories in lagging regions, namely, regions that show low-economic levels compared to other areas. Equally remarkable is the study of the presence of firm-, local- and sector-specific patterns when looking at the economic performance within lagging regions. The objective of this work is twofold. First, we provide novel, micro evidence on the resilience of lagging regions in the South of Italy, the so-called Mezzogiorno, during and after the Great Recession. Secondly, we study the performance of firms and local areas in the Italian lagging regions after the Great Recession and make comparisons across and within such regions in order to show which factors can help explaining differences in territorial resilience in less advanced regions. We finally discuss the key results of our work and the main policy implications, also in the light of the recent territorial asymmetries registered during the post-pandemic recovery phase.