Industrial specialisation and geographic concentration: two sides of the same coin? Not for the European Union

Aiginger, Karl and Davies, Stephen W. (2004) Industrial specialisation and geographic concentration: two sides of the same coin? Not for the European Union. Journal of Applied Economics, VII (2). pp. 231-248. ISSN 1514-0326

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Abstract

Some recent studies have shown that specialisation of countries has tended to increase, while regional concentration of countries has tended to decrease. This seems to be counterintuitive at first glance. In this paper, we use the entropy index - as the indicator of structural change with the neatest aggregation properties to show how this divergence can happen. The main purpose of the paper is methodological, but we also apply the methodology to a specific case study: Manufacturing in the European Union since 1985. We confirm for this interesting period that increasing industrial specialisation has been offset by faster growth in the smaller Member States, with the net effect that industries have become somewhat less geographically concentrated. In terms of economic geography the evidence is in line with the second part of the inverted U-curve (where decreasing transport costs eventually foster de-concentration). This is no contradiction to increasing specialisation of countries in specific industries as predicted by many models in the old as well as the new trade theory.

Item Type: Article
Faculty \ School: Faculty of Social Sciences
Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Industrial Economics
Faculty of Social Sciences > Research Centres > Centre for Competition Policy
Related URLs:
Depositing User: Vishal Gautam
Date Deposited: 01 Nov 2004
Last Modified: 20 Jun 2023 14:42
URI: https://ueaeprints.uea.ac.uk/id/eprint/16552
DOI:

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