A model of optimal allocation of investment across regions is developed. It is shown that the optimality conditions may lead to increasing inequalities at the spatial level. Introducing an element of endogenous innovation dualistic situation emerges. An empirical analysis, using data for the...

This paper investigates the extent of regional cohesion amongst European regions; an issue of emerging importance in the fast growing literature on regional economics. This paper aims toshed some further light on the question of regional cohesion by taking into account the impactof the existing...