Some Features of Deindustrialisation in EU15 During the Period 1999-2004 : A Multivariate Analysis

During the past 40 years, employment in manufacturing, as a share of total employment, has steadily fallen in the world's most advanced economies. In this paper the causes and the different modalities of deindustrialisation process are examined closely with reference to 13 of the first EU15 countries. The aim of the analysis is to empirically explore if deindustrialisation is primarily a natural outcome associated with the development of modern societies or, on the contrary, can be defined a symptom of the failure of a country manufacturing sector. To this end, the Analysis of Principal Components (PCA), applied on a n-way matrix, is used to obtain a synthesis of the factors influencing deindustrialisation. The multivariate analysis was carried out on the Eurostat data for the period 1999-2004, at a disaggregated level of manufacturing (i.e. Nace divisions), considering simultaneously the time, the regional and the sectorial effects. The estimates indicate that the main factors responsible of the dynamics of deindustrialisation have been efficiency and the scale of production processes in various manufacturing activities