This study analyses relative sectoral specialisation of EU regions on the basis of investment and employment patterns. Controlling for heteroscedasticity and potential endogeneity in the econometric analysis, we find that relative specialisation in manufacturing sectors is higher in central regions. Relative specialisation in services sectors, instead, is stronger in administrative centres as well as peripheral regions. A higher local level of sectoral economies of scale and of productivity strongly increases relative investments in manufacturing sectors. Lower (higher) regional labour costs attract, in particular, higher relative employment shares in labour-intensive (human capital-intensive) sectors. --
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number
04-43.
Find related papers by JEL classification: F2 - International Economics - - International Factor Movements and International Business C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General F15 - International Economics - - Trade - - - Economic Integration R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
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