Year: 2005
Title:
Determinants of Industrial Location Patterns in CEECs
JEL: F15, F14
Authors:
Antje Hildebrandt (Oesterreichische Nationalbank)
Julia Woerz (wiiw)
Abstract:
We describe concentration tendencies in individual manufacturing industries in Central and Eastern European countries and identify relevant factors causing these patterns. Using output and employment data for 14 manufacturing industries over the years 1993-2002, we observe an increase in concentration of industrial activity (both in output and employment terms). Using panel estimation techniques, we explain these developments by factors derived from traditional trade theory (differences in endowments or technologies), new trade theory (demand patterns, scale economies) and new economic geography (backward and forward linkages, transport costs). Concentration is driven by differences in human capital and the local concentration of demand. While output concentration is strongly influenced by productivity differentials, concentration of the labor force is strongly related to wage differences. Differences in productivity levels influence output concentration patterns in all industries, while the relevance of other factors varies across industries.
Keywords:
: location of industry, relative concentration, Central and Eastern Europe
Contact address: woerz at wiiw.ac.at
Paper URL: http://www.wiiw.ac.at/pdf/wp32.pdf
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