Regional Industrial Policy in the Western Balkans: Neither Specialization nor Spatialization?

Figures & data

Table 1. Economic indicators in WB.

Country		GDP growth %	FDI (million $)	FDI in GDP (%)	GDP p.c. ($)	GVA Manufac. (in % total GVA)	Remittances (% GDP)	Share of industry in GDP (%)	GDP (million EUR)	GVA (million EUR)
Albania	2.24		1,200	7.86	5,350	13.2	9.63	20.06	13.64	11.90
Bosnia and Herzegovina (BiH)	2.68		390.2	1.94	6,110	23.3	11.21	23.74	18.05	15.39
Croatia	2.86		1,200	1.93	14,940	19.2	6.20	20.17	54.23	44.44
Kosovo*	4.94		325.5	3.82	3,986	14.4	11.98	11.70	7.93	5.74
N. Macedonia	0.02		430.7	3.80	5,440	21.4	2.77	23.95	11.21	9.72
Montenegro	4.06		418.2	7.55	8,910	12.5	10.70	15.93	4.96	4.02
Serbia	4.25		4,300	8.29	7,410	24.0	8.78	25.65	45.98	38.02
WB	3.00		8,264.6	5.02	7,449.4	18.93	8.75	20.17	156.0	129.23
EU-27	1.60				35,623	19.70		24.50	16,491.9	14,738.63

Source: Compiled from the National statistics (2021); World Bank (2021); Eurostat (2021)

Table 2. Comparison of industrial indicators in WB (2018–2019).

	Industrialization intensity index	Competitive industrial performance index	Share of manuf. value added in GDP index	Share of medium& high-tech industries in total manuf. value added index	Share of indust. in GDP (%)	GVA indus. in total GVA (%)	Share of industrial employ. (in %)
Albania	0.11	0.01	0.17	0.06	20.06	13.20	17.90
BiH	0.28	0.03	0.34	0.22	23.74	23.30	19.80
Croatia	0.34	0.04	0.35	0.34	20.17	19.20	14.00
N. Macedonia	0.34	0.03	0.32	0.37	23.95	21.40	16.90
Montenegro	0.14	0.01	0.10	0.18	15.93	12.50	5.60
Serbia	0.38	0.04	0.44	0.32	25.65	24.00	21.20
Kosovo*	-	-	-	-	11.70	14.40	15.30
WB	0.265	0.028	0.286	0.248	20.17	18.93	17.63

Source: UNIDO (2020); World Bank (2021)

Table 3. Dynamics of industrialization intensity index and CIP index in WB.

Country	Industrialization intensity index				Competitive industrial performance Index
	1990	2000	2010	2018	1990	2000	2010	2018	Level from 1990 to 2018
Albania	0.14	0.08	0.12	0.11	0.04	0.03	0.04	0.04	Bottom to lower middle
BiH	0.31	0.29	0.12	0.28	0.04	0.03	0.04	0.04	Lower middle to middle
Croatia	0.49	0.37	0.36	0.34	0.07	0.06	0.05	0.05	Upper middle
Kosovo*	-	-	-	-	-	-	-	-	-
N. Macedonia	0.33	0.20	0.26	0.34	0.02	0.02	0.02	0.03	Lower middle to bottom
Montenegro	0.24	0.23	0.15	0.14	0.01	0.01	0.01	0.01	Middle
Serbia	0.43	0.43	0.31	0.38	0.05	0.03	0.04	0.04	Upper middle to middle
WB	0.34	0.274	0.234	0.265	0.038	0.030	0.033	0.035

Source: UNIDO (2020); World Bank (2021)

Table 4. A modified HHI indices of spatial concentration of industries in WB (2019).

Country	CI index	RCE	RCF	Number of industrial employ.	Number of manufac. firms (NACE, Rev.2, Sec.C)	Total number of firms	Country surface (km^2)	a (share in surface (%)
Albania	4.24	0.0311	0.0143	220,000	7,961	104,090	28,748	10.44
BiH	2.45	0.0171	0.0086	163,012	6,199	60,794	51,197	18.59
Croatia	9.92	0.0336	0.0972	228,668	20,756	64,043	56,594	20.55
Kosovo*	0.29	0.0004	0.0054	27,125	4,930	35,540	10,887	3.95
N. Macedonia	2.71	0.0117	0.1578	134,863	8,362	75,914	25,713	9.34
Montenegro	0.11	0.0001	0.0014	13,022	2,522	34,707	13,812	5.01
Serbia	29.77	0.1240	0.0565	439,000	15,831	87,407	88,361	32.09
WB	1.0			1,246,337	66,561	462,495	275,312	100.0

Source: Authors’ calculations according to modified HHI concentration index (Van Egeraat et al. 2018), based on publicly available data of the national statistical institutions in the WB (National statistics 2021)

Table 5. Dynamics of the location coefficient, the index of industrial specialization and “regional factor” in WB (1990–2019).

Country	Location coefficient (LQ1)			Index of industrial specialization (Balassa)			RF (Balassa)	Dynamics of changes (Balassa)
	1990	2012	2019	1990	2012	2019	2019/1990	2019/1990
Albania	-	1.283	1.340	-	0.977	1.015	-	-
BiH	1.130	0.749	0.858	1.118	1.062	1.126	0.649	0.008
Croatia	1.249	1.149	0.975	0.900	0.892	0.796	0.758	−0.104
Kosovo*	0.464	0.405	0.262	0.911	1.608	0.866	0.591	−0.045
N. Macedonia	1.127	1.202	1.125	1.035	0.939	0.958	1.186	−0.077
Montenegro	0.948	0.640	0.379	0.833	0.585	0.318	0.448	−0.515
Serbia	1.438	1.040	1.151	1.015	1.108	1.202	0.834	0.187
WB	1.0	1.0	1.0	1.0	1.0	1.0	0.744

Source: Authors’ calculations

Table 6. Typology of NUTS-1 units according to the spatial industrial concentration (LQ1) in WB (1990–2019).

Type of NUTS-1**	Location coefficient LQ1	LQ1 (1990)	LQ1 (2019)
The industry at the beginning	≤ 0.399	-	Montenegro, Kosovo*
A poorly developed industry	0.400‐0.699	Kosovo*	-
Industrial development close to the WB average	0.700‐0.999	Montenegro	Croatia, BiH
Industrial development slightly above WB Average	1.000‐1.300	Croatia, BiH, N. Macedonia	Serbia, N. Macedonia
Industry as main branch	1.601‐2.000	-	-
Strongly developed industry	≥ 2.000	-	-

Source: Authors’ calculations

** Scale toward Puljiz (2009)

Table 7. The changes in regional specialization of industry (LQ2-Balassa index) in WB, 1990–2019. (t‐2019, ts-1990).

NUTS-1 areas that characterize	Level of LQ2 changes (2019–1990)	NUTS-1
Growth of specialization	LQt‐LQt‐ts>0.1	Serbia
Stagnation of specialization	‐0.1< LQt‐LQts>0.1	BiH, Kosovo*, N. Macedonia
Decline in specialization	LQt‐LQts<‐ 0.1	Montenegro, Croatia

Source: Authors’ calculations

Table 8. Categorization of NUTS-1 areas in WB according to RCA based on LQ2 and RF (1990–2019).

Categorization of type NUTS-1	Scope of RCA**	RCA according to LQ2 (1990)	RCA according to LQ2 (2019)
Industries with a comparative disadvantage	0< RCA< 1	Kosovo*, Croatia, Montenegro, Albania	N. Macedonia, Kosovo*, Croatia, Montenegro
Industries with low comparative advantage	1< RCA< 2	BiH, N. Macedonia, Serbia	Serbia, BiH, Albania
Industries with medium comparative advantage	2< RCA< 4	-	-
Industries with strong comparative advantages	4< RCA	-	-

Source: Authors’ calculations

**According to Hinloopen and van Marrewijk (2001)

Table 9. Comparison of the spatial concentration and industrial specialization in WB (2019).

	Concentration index (CI)	Location coefficient (LQ1)	Index of industrial specialization (Balassa index or LQ2)
Albania	4.24	1.340	1.015
BiH	2.45	0.858	1.126
Croatia	9.92	0.975	0.796
N. Macedonia	2.71	1.125	0.958
Montenegro	0.11	0.379	0.318
Serbia	0.307	1.151	1.202
Kosovo*	0.290	0.262	0.866
WB	-	1.0	1.0

Source: Authors’ calculations

Eurostat. 2021. European Statistics. Brussels: European Commission. Accessed January 26, 2023. https://ec.europa.eu/eurostat/databrowser/view/nama_10_a10/default/table?lang=en.

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