A Comparative Study on Changes in the Spatial Industry Agglomeration in Eastern EU Developing Countries: Romania vs. Bulgaria

Taking a closer look at the spatial distribution of industrial sectors, it becomes quite obvious that there is an increasing disposition for industries to concentrate in certain regions in order to benefit of agglomeration assets. In this context, we consider necessary to analyze how industrial agglomerations have evolved over time and to what extent major transformations have affected agglomeration phenomenon in lagging regions of Eastern countries, finally our paper bringing supportive evidence from Romania and Bulgaria. To what extent, have patterns of industrial agglomeration modified during the transition period? Has relocation of economic activities taken place? What are the main determinants of industrial concentration patterns? These are some crucial questions that we try to find a realistic response through the present paper. Eastern economies are notably challenging from this point of view because they experienced several decades long economic development period which was earmarked by socialist industrialization. Under the planned economy, these countries have faced more barriers to an efficient geographical allocation of economic activities across regions than their peers in the Western Europe especially because they faced the legacy of a planned economy system that determined locations for economic activities based on political decisions, not based on economic efficiency. Thus, our effort can be seen as a contribution to knowledge about agglomeration in the non-Western countries in general, and in developing regions in particular. Focusing our study on two-digit industrial sectors of 14 regions at NUTS2 level, this paper aims to identify and explain the changes regarding the evolution of industrial agglomerations in the last years across Romania compared to Bulgaria. In the end, our analysis will be able to conclude in what manner the effects of transition period influenced the patterns of industrial agglomeration in these two neighboring countries.