The border-effect index shows the region's dependence on international relations. For our border-effect analysis, we abandoned the basket approach. The reasons are as follows: (1) a country’s size and the number and density of its NUTS 2 regions have a decisive impact on the indicator, which distorts its universality and comparability for the entire ESPON space at the basket level; (2) for Erasmus student flows, intra-country flows do not exist, so our analysis looks at only two knowledge flows (H2020 and patents).
The obvious conclusion from the analysis is that small countries are more dependent on foreign flows than large countries. Moreover, border regions are usually subject to a greater exchange of international flows than central regions, the most remote from the border. Thus, it is particularly interesting to compare large countries in the ESPON space.
Capital FDI flows take on much more of a mosaic pattern in the large countries of the ESPON space. However, there are compact areas of strong international capital flows. Northern Italy is more internationalized in this respect than southern Italy, and western Germany’s international capital flows are similarly more international than eastern Germany’s. The Central-Eastern Europe states, as well as Denmark and England, are internationalized to a greater extent than other countries of Western Europe, especially the large ones. It is astonishing that the level of internationalization of FDI flows in Ireland is low. While in the UK internationalisation is associated with investment links between UK companies, in Central and Eastern Europe this is the result of FDI inflows from other countries. Against this background, we should note that some of the most peripheral regions of these same countries remain more dependent on domestic capital (e.g. eastern Poland and eastern Romania).
Theme(s): Economy, finance and trade - Economy, Finance and Trade