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Determinants of Geographical Concentration Patterns in Central and Eastern European Countries

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    Abstract

    The authors investigate the determinants of the location of industries in Central and Eastern European ; countries. Using output and employment data for thirteen manufacturing industries over the years 1993; to 2000, the authors find the concentration of industrial activity to have increased in these ten countries in contrast to the general trend prevailing in Western Europe in the same period. Further, the authors observe differences with respect to absolute and relative concentration as well as output and employment.;; In the analytical part, these developments are explained with factors derived from traditional trade theory (differences in endowments or technologies), new trade theory (expenditure patterns, scale economies) and new economic geography (backward and forward linkages, transport costs). Relative concentration is found to have been driven by differences in FDI levels, productivity differentials and expenditure patterns, absolute concentration to have been determined mainly by differences in human capital levels.;;;;;;;;

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    File URL: http://www.oenb.at/dms/oenb/Publikationen/Volkswirtschaft/Focus-on-European-Economic-Integration/2004/Focus-on-European-Economic-Integration-Q1-04/chapters/determinants_tcm16-20265.pdf
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    Article provided by Oesterreichische Nationalbank (Austrian Central Bank) in its journal Focus on European Economic Integration.

    Volume (Year): (2004)
    Issue (Month): 1 ()
    Pages: 70-95

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    Handle: RePEc:onb:oenbfi:y:2004:i:1:b:2

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    1. Rikard Forslid & Jan I. Haaland & Karen Helene M. Knarvik & Ottar Maestad, 2002. "Integration and transition: Scenarios for the location of production and trade in Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(1), pages 93-117, March.
    2. J. A. Hausman & W. E. Taylor, 1980. "Panel Data and Unobservable Individual Effects," Working papers 255, Massachusetts Institute of Technology (MIT), Department of Economics.
    3. Diego Puga & Anthony J. Venables, 1996. "The spread of industry: spatial agglomeration in economic development," LSE Research Online Documents on Economics 20683, London School of Economics and Political Science, LSE Library.
    4. Mary Amiti, 1999. "Specialization patterns in Europe," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 135(4), pages 573-593, December.
    5. Karl Aiginger, . "Do Industrial Structures Converge? A Survey on the Empirical Literature on Specialisation and Concentration of Industries," WIFO Working Papers 116, WIFO.
    6. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
    7. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 142, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
    8. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, vol. 72(3), pages 389-405, June.
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