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Spatial fragmentation of industries by functions

  • Franz-Josef Bade

    (University of Dortmund)

  • Eckhardt Bode

    (Kiel Institute for the World Economy)

  • Eleonora Cutrini

    (University of Macerata)

We explore to what extent key functions in manufacturing are spatially clustered with, or dispersed from,each other within industries, and how these clustering or dispersion patterns have changed during recent decades. Estimating the levels and changes (1992–2007) of localizations and colocalizations of selected functions (production, headquarter services, R&D) within 27 West German industries by means of K densities, we identify two broad groups of industries. In “fragmenting” industries,which account for one half of manufacturing employment, functions were more clustered with each other than the industry as a whole after the fall of the Iron Curtain but have, in accordance with regional theories of spatial fragmentation, been unbundled spatially from each other subsequently. In “integrating” industries, by contrast, which account for one third of manufacturing employment, functions were initially dispersed from each other but have subsequently been rebundled spatially with each other. We hypothesize that this spatial rebundling is a consequence of offshoring, i.e., international fragmentation.

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Paper provided by Macerata University, Department of Studies on Economic Development (DiSSE) in its series Working Papers with number 39-2012.

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Date of creation: Feb 2012
Date of revision: Feb 2012
Handle: RePEc:mcr:wpaper:wpaper00039
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  1. Görg, Holger & Hanley, Aoife, 2009. "Services outsourcing and innovation: An empirical investigation," CEPR Discussion Papers 7390, C.E.P.R. Discussion Papers.
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  17. Kristin Aarland & James Davis & J Vernon Henderson & Yukako Ono, 2004. "Spatial Organization of Firms: The Decision to Split Production and Administration," Working Papers 04-03, Center for Economic Studies, U.S. Census Bureau.
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