Changing market potentials and regional growth in Poland

Resumo

In the first part of this paper we compute Harris (1954) market potential values for the Polish regions for the period 2000-2008 based on the spatial distribution of incomes (measures by GDP) and its accessibility. In the second part of the paper we analyze to which extent the changes in market potentials in Poland have been the cause of the increasing income disparities observed across Polish regions from 1995 to 2008. To do so we derive and estimate a New Economy Geography model which relates per capita GDP growth rates with changes in market potential. The results of the cross-section estimations of the model for the period 1995-2008 point to a positive and significant effect of changing market potentials in per capita GDP growth rates and in widening the gap between poor and rich regions in the country under the period of analysis.