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Does Economic Integration Affect the Structure of Industries? Empirical Evidence from the CEE

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  • D'artis Kancs

Abstract

In this paper we study the impacts of regional integration on the structure of industries in the Central and Eastern European (CEE) transition economies. Our empirical analysis is based on the economic geography framework, which is able to predict not only the industry location after integration, but also to capture other general equilibrium effects, such as transition to market economy, which turn out to be highly significant in the CEE. Our empirical results complement previous findings that industry location is strongly related to economic integration. We also find that CEE integration of the Council on Mutual Economic Assistance (CMEA) has distorted the industry location pattern predicted by the underlying economic geography theory. These distortions are higher in those regions that were more integrated in the CMEA. Our ex-ante simulation results suggest a convergence in regional specialisation after CEE integration with the EU.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economic Systems Research.

Volume (Year): 19 (2007)
Issue (Month): 1 ()
Pages: 73-97

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Handle: RePEc:taf:ecsysr:v:19:y:2007:i:1:p:73-97

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Keywords: Economic development; regional integration; input-output linkages;

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  1. Julda Kielyte, 2008. "Estimating Panel Data Models in the Presence of Endogeneity and Selection," Journal of Economics and Econometrics, Economics and Econometrics Research Institute (EERI), Brussels, Economics and Econometrics Research Institute (EERI), Brussels, vol. 51(2), pages 1-19.
  2. J. Peter Neary, 2000. "Of Hype and Hyperbolas - Introducing the new Economic Geography," Working Papers, School Of Economics, University College Dublin 200019, School Of Economics, University College Dublin.
  3. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
  4. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the 'New Economic Geography'," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, 08.
  5. Krugman, Paul R & Venables, Anthony J, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 110(4), pages 857-80, November.
  6. Karl Aiginger & Stephen W. Davies, 2004. "Industrial specialisation and geographic concentration: Two sides of the same coin? Not for the European Union," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 231-248, November.
  7. repec:fth:iniesr:430 is not listed on IDEAS
  8. 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.
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Cited by:
  1. Curran, Louise & Zignago, Soledad, 2012. "EU enlargement and the evolution of European production networks," Research in International Business and Finance, Elsevier, Elsevier, vol. 26(2), pages 240-257.
  2. James Anderson, 2001. "Migration, FDI, and the Margins of Trade," EERI Research Paper Series EERI_RP_2001_05, Economics and Econometrics Research Institute (EERI), Brussels.
  3. Kancs, d'Artis & Kielyte, Julda, 2010. "European Integration and Labour Migration," European Integration online Papers (EIoP), European Community Studies Association Austria (ECSA-A), vol. 14, November.
  4. d'Artis Kancs & Pavel Ciaian, 2007. "Blue Cards, Blue Prospects?," LICOS Discussion Papers, LICOS - Centre for Institutions and Economic Performance, KU Leuven 19407, LICOS - Centre for Institutions and Economic Performance, KU Leuven.

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