Modeling structural change in the European metropolitan areas during the process of economic integration

•Effects of European economic integration on the specialization of metropolitan areas•Econometric models of sectoral specialization and sectoral dissimilarity•Semiparametric models•Wood's (2012) mgcv R package

The specialization patterns of metropolitan areas are crucial in characterizing the effects of economic integration in Europe. This paper aims to provide and estimate an econometric model that explains both sectoral specialization and sectoral dissimilarity, measured with the GINI and the KRUGMAN indexes, respectively, for 35 European metro areas during the period 1980-2005. A semiparametric approach is proposed to address the issues of non-linearity and separability. The econometric analysis indicates how the deepening of the processes of development and integration occurred in the last decades affected both specialization and similarity of the sectoral metropolitan structure, finally supporting a “specializing alike hypothesis”.