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New economic geography meets Comecon

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  • Marius Brülhart
  • Pamina Koenig

Abstract

We analyse the internal spatial wage and employment structures of the Czech Republic, Hungary, Poland, Slovakia and Slovenia, using regional data for 1996-2000. A new economic geography model predicts wage gradients and specialization patterns that are smoothly related to the regions' relative market access. As an alternative, we formulate a 'Comecon hypothesis', according to which wages and sectoral location are not systematically related to market access except for discrete concentrations in capital regions. Estimations support both the NEG (new economic geography) prediction and the Comecon hypothesis. However, when we compare internal wage and employment gradients of the five new member states with those of Western European countries, we find that the former are marked by significantly stronger discrete concentrations of wages and service employment in their capital regions, confirming the ongoing relevance of the Comecon hypothesis. Copyright (c) The European Bank for Reconstruction and Development, 2006.

Suggested Citation

  • Marius Brülhart & Pamina Koenig, 2006. "New economic geography meets Comecon," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(2), pages 245-267, April.
  • Handle: RePEc:bla:etrans:v:14:y:2006:i:2:p:245-267
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    References listed on IDEAS

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    1. repec:spo:wpecon:info:hdl:2441/10191 is not listed on IDEAS
    2. Simonetta Longhi & Peter Nijkamp & Iulia Traistaru, 2003. "Determinants of Manufacturing Location in EU Accession Countries," ERSA conference papers ersa03p310, European Regional Science Association.
    3. Kristian Behrens, 2003. "International trade and internal geography revisited," Working Papers hal-01526511, HAL.
    4. Head, Keith & Mayer, Thierry, 2004. "The empirics of agglomeration and trade," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 59, pages 2609-2669 Elsevier.
    5. Takatoshi Tabuchi & Kristian Behrens & Andrea R. Lamorgese, 2004. "Testing the Home Market Effects in a Multi-country World: The Theory," Econometric Society 2004 Far Eastern Meetings 595, Econometric Society.
    6. Bernard Fingleton, 2007. "Testing the ‘New Economic Geography’: A Comparative Analysis Based on EU Regional Data," Chapters,in: New Directions in Economic Geography, chapter 3 Edward Elgar Publishing.
    7. Marius Brülhart & Pamina Koenig, 2005. "New Economic Geography meets Comecon: Regional Wages and Industry Location in Central Europe," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 05.01, Université de Lausanne, Faculté des HEC, DEEP.
    8. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
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    Cited by:

    1. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2009. "Do New Economic Geography agglomeration shadows underlie current population dynamics across the urban hierarchy?," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 445-466, June.
    2. repec:fau:fauart:v:67:y:2017:i:2:p:140-164 is not listed on IDEAS
    3. Sabyasachi Tripathi, 2013. "Do Large Agglomerations Lead To Economic Growth? Evidence From Urban India," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 25(3), pages 176-200, November.
    4. Christian Volpe Martincus, 2010. "Spatial Effects Of Trade Policy: Evidence From Brazil," Journal of Regional Science, Wiley Blackwell, vol. 50(2), pages 541-569.
    5. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    6. Partridge, Mark D. & Rickman, Dan S. & Ali, Kamar & Olfert, M. Rose, 2009. "Agglomeration spillovers and wage and housing cost gradients across the urban hierarchy," Journal of International Economics, Elsevier, vol. 78(1), pages 126-140, June.
    7. Mark D. Partridge, 2010. "The duelling models: NEG vs amenity migration in explaining US engines of growth," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 513-536, August.
    8. Mark D. Partridge & Dan S. Rickman, 2012. "Integrating Regional Economic Development Analysis and Land Use Economics," Economics Working Paper Series 1203, Oklahoma State University, Department of Economics and Legal Studies in Business.

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