Economic Growth of Agglomerations and Geographic Concentration of Industries: Evidence for West Germany

Abstract

Geppert K., Gornig M. and Werwatz A. (2008) Economic growth of agglomerations and geographic concentration of industries: evidence for West Germany, Regional Studies. During the two decades between 1980 and 2000, there was no clear overall trend of economic convergence or divergence among West German regions. However, a number of regions that were already rich – generally large agglomerations – had succeeded in further distancing themselves from the rest. At the same time, knowledge-intensive services are identified as industries whose geographical concentration was initially high and continued to increase. Logistic and non-parametric regression estimates show that the higher a region's share of employment in these service sectors, the greater the probability that a region is classified as being rich and becoming even richer.

Geppert K., Gornig M. et Werwatz A. (2008) La croissance économique des agglomérations et la concentration géographique industrielle: des preuves provenant de l'Allemagne de l'Ouest, Regional Studies. Pendant deux décennies, à savoir de 1980 à l'an 2000, aucune tendance globale ni à la convergence, ni à la divergence économiques parmi les régions de l'Allemagne de l'Ouest n'est évidente. Cependant, bon nombre de régions riches – en règle générale de grandes agglomérations–ont réussi à s'éloigner davantage des autres. En même temps, on identifie des services à intensité de connaissance dont la concentration géographique était élevée au départ et a continué d'augmenter. Des estimations de régression logistique et non paramétrique montrent que plus la part de l'emploi dans ces services s'avère élevée, plus il est probable qu'une région se classe comme riche et en voie de s'enrichir.

Convergence régionale Services à intensité de connaissance Liens locaux spécifiques à une industrie Régressions non-paramétriques

Geppert K., Gornig M. und Werwatz A. (2008) Wirtschaftswachstum von Ballungsgebieten und geografische Konzentration von Branchen: Belege für Westdeutschland, Regional Studies. In den zwei Jahrzehnten von 1980 bis 2000 gab es keinen klaren Gesamttrend der ökonomischen Konvergenz oder Divergenz unter den westdeutschen Regionen. Allerdings gelang es mehreren bereits wohlhabenden Regionen–in der Regel großen Ballungsgebieten –, sich noch weiter vom Rest zu distanzieren. Gleichzeitig identifizieren wir wissensintensive Dienstleistungen als Branchen, deren geografische Konzentration schon zu Beginn hoch lag und weiter gewachsen ist. In logistischen und nichtparametrischen Regressionsschätzungen zeigt sich, dass die Wahrscheinlichkeit, dass eine Region als wohlhabend klassifiziert wird und noch wohlhabender wird, umso höher liegt, je größer in dieser Region der Anteil der Arbeitnehmer in diesen Dienstleistungssektoren ausfällt.

Regionale Konvergenz Wissensintensive Dienstleistungen Branchenspezifische lokale Verknüpfungen Logistische Regressionen Nichtparametrische Regressionen

Geppert K., Gornig M. y Werwatz A. (2008) Crecimiento económico de aglomeraciones y concentraciones geográficas de las industrias. El ejemplo de Alemania del Oeste, Regional Studies. Durante las dos décadas de 1980 a 2000, no existía una tendencia general clara de la convergencia o divergencia económica entre las regiones de Alemania del Oeste. Sin embargo, varias regiones que ya eran ricas –generalmente grandes aglomeraciones– llegaron a distanciarse aún más del resto. Al mismo tiempo, identificamos los servicios con alto nivel de conocimientos como industrias cuya concentración geográfica fue alta desde el principio y siguió creciendo. Los cálculos logísticos y de regresión no paramétrica indican que cuanto mayor es la participación de empleo en estos sectores de servicio de una región, más probabilidades tiene una región de ser clasificada como rica y de aumentar su riqueza.

Convergencia regional Servicios con alto nivel de conocimientos Vínculos locales específicos para la industria Regresiones logísticas Regresiones no paramétricas

Keywords:

• Regional convergence
• Knowledge-intensive services
• Industry-specific local linkages
• Logistical regressions
• Non-parametric regressions 

JEL classifications:

• C14
• C16
• R12
• R30

Notes

1. Combes and Overman (2004) provide a comprehensive and critical survey of studies.

2. Cheshire and Magrini (2000) drew a similar conclusion in their analysis of functional urban regions (FUR) within the EU.

3. For the geographical scope of services markets, see Esparza and Krmenec (1994), Lejour and de Paiva Verheijden (2004), and Deutsch et al. (2006).

4. This system of classifying sectors has been replaced by the 1993/2003 systems. The use of the old classification does not result in any real disadvantages for the present study, but it should be noted that the information technology sector is not treated as a separate entity in the old classification but is included under engineering. The classification used herein comprises 83 economic sectors. There are no GDP data for East Germany before 1991 and no reliable disaggregated employment data before 1993. However, there is another reason for excluding East Germany from this analysis: in the socialist economy of the German Democratic Republic (GDR), most sectors were highly concentrated spatially. This pattern changed dramatically in the process of transformation and restructuring that took place during the 1990s. Since the authors' primary interest is on spatial processes in a market economy, not on the specifics of transformation, the focus is on West Germany.

5. The delimitation of these ‘Raumordnungsregionen’ mainly follows commuting patterns and socio-economic linkages, although the federal state boundaries are observed. However, in the case of the city states, this yields units that are not very meaningful economically. Therefore, the planning regions that directly adjoin Hamburg and Bremen are grouped into one unit with the core city. Altogether, there are 71 West German regions that remained unchanged from 1980 to 2000.

6. For the entire period between 1980 and 2000 the railways sector also showed an increase in spatial concentration. Nonetheless, it is not included in the category of concentrating sectors because the spatial distribution of employment in this field is determined to a considerable extent by the administrative allocation of the on-train personnel of the Deutsche Bahn.

7. Calculations based on the Gini coefficient produce similar results. There is an overlap of nine sectors with the classification according to the Herfindahl index. Only the one sector of petroleum processing was added to the category of concentrating sectors and three sectors (non-ferric metals, engineering, and arts/theatre) were dropped.

8. One extreme observation, planning region 80, was dropped. There the share of concentrating sectors in 1980 was more than five times as high as in the region with the second highest share of such sectors.

9. The pooled sample thus contains 4 × 71 (=284) observations. Dropping planning region 80 (see the previous note) gives 4 × 70 (=280) observations.

10. The estimated coefficient of the share in regional employment is in both cases statistically significant at the 1% level.

11. The bandwidths of 0.044 (for the period 1980–2000) and 0.115 (for the pooled sample) were chosen on the basis of a cross-validation criterion (cf. Härdle et al., 2004).

12. The unconditional expected values for the shares of the breakaway regions in all areas are 0.11.

13. The bandwidths of 0.02 (for the period 1980–2000) and 0.062 (for the pooled sample) were selected using cross-validation.

14. A similar result with respect to spatial concentration is reached by Südekum (2005), even though the disaggregation of the economy is much lower in that study (28 sectors). There, inter alia, the vast group of all business services is identified as showing a tendency of spatial concentration.