Theory and Empirics
Edited by Neri Salvadori, Pasquale Commendatore and Massimo Tamberi
Chapter 4: The Changing Location of European Industry: A Twofold Geographical Perspective
* Eleonora Cutrini 4.1. INTRODUCTION European economic integration has been substantially promoted in recent years by the enactment of the Single Market Programme and the adoption of a common currency. One of the most widely debated issues raised by the process concerns the expected far-reaching implications in the location of economic activities between the regions involved. According to the Krugman hypothesis European integration will propel the coalescence of industrial activity, so as to mimic the increasing geographical concentration previously arising across the United States. So far the related theoretical literature has failed to provide irrefutable predictions. Empirically speaking, the great bulk of the evidence concerns patterns of international concentration with limited attention to intra-national evolution. Although inspection of the existing works provides some valuable insights, it is hard to come by conclusive evidence since the different studies are based on disparate spatial partitions of data, methods and time periods. Disentangling the agglomeration within countries from that occurring internationally has attracted renewed interest strictly connected – from a normative perspective – to the multiplicity of institutions involved in designing policies to enhance industrial change and regional development. To this end, what is required is an integrated approach allowing the inclusion of two geographical levels within a single economic analysis. The objective of this chapter is to shed light on the location patterns of manufacturing as a whole and its specific industries. Firstly, combining absolute and relative measures I draw a clear picture of what has happened in Europe in recent decades. Moreover, the methodology...
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