Determinants of Geographical Concentration Patterns in Central and Eastern European Countries

The authors investigate the determinants of the location of industries in Central and Eastern European ; countries. Using output and employment data for thirteen manufacturing industries over the years 1993; to 2000, the authors find the concentration of industrial activity to have increased in these ten countries in contrast to the general trend prevailing in Western Europe in the same period. Further, the authors observe differences with respect to absolute and relative concentration as well as output and employment.;; In the analytical part, these developments are explained with factors derived from traditional trade theory (differences in endowments or technologies), new trade theory (expenditure patterns, scale economies) and new economic geography (backward and forward linkages, transport costs). Relative concentration is found to have been driven by differences in FDI levels, productivity differentials and expenditure patterns, absolute concentration to have been determined mainly by differences in human capital levels.;;;;;;;;