“…Because of these spatial spillovers, in CEE countries there has been a divergence in regional economic performance that was evident both before and after the financial crisis, suggesting important regional differences in the response to shocks. Shortly after the start of the transition, regional disparities in income and employment had already became increasingly evident ( Petrakos, 1996 , Petrakos, 2001 ) due to the inability of some regions to adapt to the shock of transition to a market economy ( Fazekas, 1996 ) in large part because of their structural characteristics ( Ezcurra & Pascual, 2007 ; Monastiriotis, Kallioras, & Petrakos, 2017 ). Moreover, throughout the past twenty years, higher productivity, per capita GDP and population growth have characterized CEE's capital cities and the regions surrounding them ( Babecký & Komárek, 2020 ; Neumann, Budde, & Ehlert, 2014 ).…”