Economic integration and regional patterns of industry location in transition countries

Recent developments in international trade theory predict that increased globalization will be associated with increase locational concentration of particular economic activities, and hence increased specialisation of national and regional economies. Relative little empirical evidence exists on whether these predictions are correct, mainly as far as Central and Eastern Europe is concerned. This paper aims at exploring and analysing the trade-location relationship in five candidate countries, namely Bulgaria, Estonia, Hungary, Romania and Slovenia, during the 1990s. Three empirical evidence will be provided: current trend in spatial development in the face of rapidly increasing trade at national and regional level; factors explaining such patterns and the role played by the economic integration process with the EU in partially or totally shaping such patterns. This paper combines spatial data on GDP, labour force, wages, and other socio-economic indicators included in REGSPEC database to estimate patterns of development at regional level. Particular emphasis will be devoted to understand these patterns in border regions, which may be disproportionately vulnerable to the enlargement process but also have the potential to exploit geographical proximity to their advantage. Several types of border regions can be identified in transition countries. Two groups of them seem to be worth analysing: internal border regions, i.e. those locating along the border with a present or candidate member to the EU, and external border regions, i.e. regions located at the borders of the "enlarged EU".