Economic Convergence and Divergence in Europe Growth and Regional Development in an Enlarged European Union
Growth and Regional Development in an Enlarged European Union
Edited by Gertrude Tumpel-Gugerell and Peter Mooslechner
Chapter 5: Restructuring industrial areas: lessons in support of regional convergence in an enlarging Europe
5. Restructuring industrial areas: lessons in support of regional convergence in an enlarging Europe Michael Steiner 5.1. INTRODUCTION1 Problems of structural-industrial adaptation are a common feature of changing economies (an expression which comes close to a pleonasm). They are nowadays a dominating problem in countries in transition in Eastern Europe, they are a pertinent problem in speciﬁc regions of the socalled Western world. Old industrial areas (OIAs) – in the context of the United States also called ‘rust-belt’ areas – as a typical form of a combination of regional and sectoral decline in these post-industrial economies have been treated extensively in the literature of industrial organization, regional economics and technological and social change (see for example Norton and Rees 1979; Tichy 1981, 1986; Steiner 1985, 1990b; Prisching 1985; Markusen 1985; Geldner 1989). They are typically characterized by a large industrial base going back to the last century (or longer), an overrepresentation of a few sectors leading to a monostructure, a domination of large, often nationalized ﬁrms with a limited range of products, low mobility (both of ﬁrms and workers), above average wage levels, a wellorganized labour force, and strong hierarchical organizations within the ﬁrms. In Eastern Europe the starting point of transformation was an overdimensioned industry, characterized by nationalized big ﬁrms with soft budget constraints based on generous credits of nationalized banks, a restricted market orientation and a limited degree of competition from the world market (see for example Döhrn and Heilemann 1992; Brenton et al. 1997; Welfens 1997) – problems...
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