Industrial structure and regional employment dynamics

Abstract

"Disparities in regional economic outcomes within Germany are almost as pronounced as disparities between countries of the European Union. This book investigates how disparities in the industrial structure can influence the development of regional employment. The main part of this book consists of three independent studies. The first two focus on the economics of agglomeration, that is, the geographical concentration of plants from the same or similar industries.<br> While the existence of agglomeration externalities is well accepted in both the empirical and theoretical literature, there is only consensus as far as they foster productivity. The evidence on employment effects is ambiguous. The first study tries to fill this gap by analyzing the inertia of employment growth in both agglomerations and non-agglomerated local industries. The main result is that positive employment shocks are more persistent in industrial agglomerations and increase employment in the long run, which is evidence for the existence of agglomeration externalities.<br> However, as long as only spillovers within local industries are considered, the mechanisms causing these externalities remain hidden. The second study sheds light on these mechanisms by analyzing spillovers between different, but kindred industries. Adopting methods of spatial econometrics, it is possible to discriminate between forward-backward linkages, labor market pooling, and knowledge spillovers. The main result implies that spillovers between industries are also an important aspect of agglomeration externalities and that labor market pooling is of particular importance.<br> The last study shifts its focus on how regions are exposed to the effects of international trade due to the structure of resident industries. There is evidence that the exceptional rise of China and Eastern Europe on the global market has in fact been favorable for Germany. For the average region, export opportunities in these countries had positive effects on manufacturing employment. These effects have more than compensated the decline of industries that faced increasing competition by imports from the East." (Author's abstract, IAB-Doku) ((en))

Cite article

Dauth, W. (2012): Industrial structure and regional employment dynamics. (IAB-Bibliothek 335), Bielefeld: Bertelsmann, 131 p. DOI:10.3278/300781w