Understanding of resilience in the context of regional development using composite index approach: The case of european union NUTS-2 regions

Abstract

Economies have always been prone to different kinds of exogenous shocks, which can destabilize the path and pattern of regional economic growth. Regional economy perturbed by a shock may move onto a new growth path by re-establishing economic linkages, both internally and with other regions. The question why one region is more vulnerable to economic shock than other, impelled to analyze notion of resilience in a regional development context. Despite own limitations of quantitative methods, several approaches in the form of composite indices (CIs) have been proposed by the European Union (EU) and the other institutions. The aim of this paper is to throw light on some of the underlying aspects of regional resilience and provide an overview of a notion as well as analysis of research studies on constructing the territorial CIs. The main results of the paper are overview and comparison of regional resilience literature and empirics of existing CIs that lead to measuring the EU NUTS-2 regions resilience based on constructing own index. CIs construction includes several steps that have to be made and corresponding methods have to be chosen. Primarily, selection of sub-indicators, normalizing methods, weighting schemes and aggregation formulas are fundamental.