European Regional Science Association
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European Regional Science Association
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The abstract for paper number 318:
Guntram Wolff, Center for European Integration Studies, University of Bonn, Bonn, Germany
Regional Specialization, Employment Dynamics and Structural Convergence in Transition Countries
Trade reorientation and transition to a market economy in Central and East European countries have resulted in structural change, i.e. industrial restructuring and labor reallocation across sectors and regions. In the 1990s, many transition countries have experienced considerable decline in output and employment.
In this paper we investigate and explain regional differentials in employment change in three transition countries: Bulgaria, Hungary and Romania. We apply a shift-share analysis using a three-factor decomposition and assess the role of industry mix (structural component), region-specific factors (differential component) and regional competitiveness (allocative component) in explaining regional differentials in employment growth. We find that the variance of regional employment growth is driven almost entirely by region-specific factors. Industry mix and regional competitiveness factors play only a minor role in explaining regional employment dynamics in the three countries included in our study.
We further investigate by means of a shift-share regression (Patterson, 1991), which industries tend to concentrate in regions with high initial concentration of these industries. The analysis also indicates which industries have a tendency to spread more evenly across space and thus lead to structural regional convergence. Preliminary results suggest, that in Bulgaria most manufacturing industries tend to concentrate in regions with high initial concentration, whereas agriculture and service sectors have a tendency to de-concentrate and thus spread more evenly across space. Results for the other countries are not yet available. Policy conclusions about the impact of enlargement and transition on regions are given.
Unfortunately full paper has not been submitted.