Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 415: Functional Economic Regions, Accessibility and Regional Development

Charlie Karlsson () and Michael Olsson ()
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Charlie Karlsson: Centre of Excellence in Science (CESIS), Jönköping International Business School, Blekinge In-stitute of Technology, & University of Southern Denmark.
Michael Olsson: EFF, & University of Skövde

Abstract: In this paper, we first present how one can create functional economic regions. Then, we elaborate on the economic activity and spatial interaction, which forms functional regions, and the development of the system of functional regions. Our presentation shows that the economy is structured in functional regions, and hence it is important to use functional regions in economic studies, in order to produce correct results, and for regional policy, in order for the policy to be effective. We observe, that the often used NUTS-regions are very large compared to the functional regions. We argue, therefore, that the use of NUTS-regions ought to be replaced by the use of functional regions. This would lead to more reliable results and better policy outcomes.

Keywords: Functional economic region; accessibility; infrastructure; network; regional policy; Europe

JEL-codes: R23; R32; R40; R58

28 pages, June 29, 2015

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