The Effects of European Integration on Regional Employment - Specialization of Austrian Regions

This paper focuses on employment effects since Austria joined the European Union. The location of economic activity and thus employment has been of interest for the economics profession for a long time. In this respect the question on the employment effects of integration in common markets is of special interest as the hypothesis can be raised that because of increased competition regions will specialize and industries will concentrate. Therefore it is asked how regions have specialized and how industries have concentrated by using various concentration/specialization measures. Moreover, the role of foreign direct investments are observed in explaining concentration/specialization as well as regional employment shifts. It is shown (i) that no general trends in specialization/concentration can be detected, so that on a general level the hypothesis of joining a common market necessarily leads to specialization/concentration must be refused, but for specific industries and regions interesting patterns can be observed and (ii) foreign direct investments have an significant impact on employment in regions.