Specialization versus spatial concentration: Which approach better defines the impact of economic integration? The case of the Romania s regions

Transcription

1 Specialization versus spatial concentration: Which approach better defines the impact of economic integration? The case of the Romania s regions Ceapraz Lucian, University of Burgundy, France The Strength of Cities and Regions SCORUS Conference in Darmstadt (Germany) October 2007

2 1. Impact of EU expansion on the regional development of former Eastern Europe countries (the case of Romania) one dimension of integration-induced impact : the spatial distribution of activities across regions analysis of the internal economic geography of Romania at regional level 8 regions (NUTS 2) and 13 industrial sectors (1-digit NACE rev.1.1) focus on the employment structures 2

3 2. Why industrial specialization and spatial concentration? 1) «these two dimensions of structural change are often loosely defined and sometimes implicitly assumed to move in the same direction» (Aiginger, 1999) 2) treated as closely economic phenomena, if not identical (Aiginger, Rossi-Hansberg, 2006). 3) complementary approaches: all you have to do is to invert the role played by the geographical aggregation to pass from an index of spatial concentration to an index of regional specialization (Houdebine, 1999). 3

4 Continued- 4) statistically, specialization and concentration are two perspectives to be derived from a matrix with the columns referring to regions and the rows to industries (Aiginger, 1999). 4

5 DEFINITIONS 1) Regional specialization is defined as the distribution of shares of an industry in total employment in a specific region compared to a benchmark distribution; a region is considered to be «specialized» in a specific sector if this sector has a high share in the employment of a particular region (Traistaru, 2002) 5

6 DEFINITIONS continued- 2) Spatial concentration is the distribution of shares of regions in a specific industry compared to a benchmark distribution; a specific industry is considered to be «concentrated» if a large part of its employment is found in a small number of regions (Traistaru, 2002) 6

7 4.Theoretical literature Neo-classical theory based on differences of productivity or endowments across regions- predicts that trade liberalization and economic integration will result in a re-location of production and increasing of specialization according to comparative advantages 7

8 Continued- New trade theory based on increasing returns, agglomeration economies and cumulative processes predicts that firms with increasing returns to scale will concentrate in few regions with good market access: as trade cost decline (economic integration) the geographical advantage will play an important role 8

9 Continued- The new economic geography support that the geographical advantage is endogenous and insist that regional specialization is a result of spatial agglomeration of economic activity 9

10 5.Economic integration regions may specialized in certain activities so there is a sectoral concentration (more specialized regions or less specialized) activities may be spatially concentrated in certain regions called «the core» and less concentrated in poor regions called «the periphery». 10

11 6.The methodology A.Relative measures: Gini index of regional specialization (Krugman, 1991, Aiginger et al, ;1999, Devereux et al,1999): GINI s j = n 2 2 R n Λ i= 1 i R i -R R i ss ij s i R 1 n n R i 1 i Gini index of spatial concentration: GINIc = i 2 m 2 C m j=1 Λ C -C j j C j sc ij s j C 1 m m C j 1 j 11

12 Gini index- relative measure Specialization measure: sum differences in the specialization rates by accumulating the differences in the shares of the norm (national average) after ranking the industries according to their specialization ratios the industrial structure in a particular region is set in relation to an average value for the units to be compared rather to an equal distribution of industries capture the degree of heterogeneity across Romanian regions i.e. the gap between the industrial structure of a particular region and the average of the industrial structure of the other 7 regions Concentration measure: the sectoral equivalent of Gini index of regional specialization 12

13 B.Absolute measures: Herfindahl index of regional specialization (Krugman, 1991, Aiginger et al, 1999, Devereux et al,1999) : Hs = j i Herfindahl index of spatial concentration: Hc= i j ss ij sc ij

14 Herfindahl index-absolute measure Specialization measure: Sum of the squares of industry shares in total activity in a particular region; how different is the distribution of employment from a uniform (national) distribution; to what extent a particular region is becoming more specialized or diversified regardless of how the employment structure of Romania is developing Concentration measure: sum of the regions shares in national employment in a particular industry 14

15 Krugman index of dissimilarity-relative measure Dissimilarity index for specialization : DSR = i ss -s j ij i Dissimilarity index for spatial concentration: DCR = i js c-s ij j 15

16 Krugman index of dissimilarity Specialization measure: compares the industrial structure of one region with an average distribution across regions Sum of absolute differences between shares of industries in economic activity in a particular region and their average value across regions by branch Concentration: sum of absolute differences between the regional and the national level value of shares of an industry in total employment as the norm to which regional level values are related 16

17 Regions (NUTS 2) 7.Descriptive statistics: Gini index of regional specialization trend N-E 0,100 0,177 S-E 0,178 0,207 S 0,116 0,193 S-V 0,233 0,346 V 0,228 0,203 N-V 0,215 0,221 C 0,193 0,204 B-I 0,384 0,722 17

18 Herfindahl index of regional specialization Regions (NUTS 2) trend N-E 0,256 0,256 S-E 0,209 0,205 S 0,240 0,238 S-V 0,232 0,246 V 0,178 0,171 N-V 0,221 0,220 C 0,225 0,187 B-I 0,166 0,123 18

19 Gini index of regional concentration Sectors trend 1. 0,498 0, ,637 0, ,181 0, ,175 0, ,237 0, ,214 0, ,184 0, ,210 0, ,153 0, ,325 0, ,111 0, ,114 0, ,097 0,056 19

20 Herfindahl index of regional concentration Sectors trend 1. 0,147 0, ,142 0, ,128 0, ,173 0, ,135 0, ,132 0, ,126 0, ,129 0, ,115 0, ,152 0, ,119 0, ,124 0, ,122 0,122 20

21 Specialization 8.Results According to Gini: increase specialization in all the regions except one According to Herfindahl: decrease specialization in all regions except two regions Concentration According to Gini: 6 sectors have an increase and 7 sectors have a decrease of spatial concentration According to Herfindahl: 5 sectors have an increase,6 sectors have a decrease and 2 sectors record a constant trend 21

22 Results continued- Results depend in general : on the distributional indicator chosen degree of disaggregation on the chosen activity variables on the chosen measure: relative or absolute 22

23 9.Conclusions Each indicator offers some advantages and disadvantages Indicators on specialization and spatial concentration could be combined From the perspective of economic geography both concepts are useful to emphasize the degree of integration at regional level 23

24 Thank you for listening! 24