Eleonora Cutrini
The changing location of the European industry: a twofold geographical perspective

Abstract: This paper empirically investigates the evolution of industrial location in Europe since the launching of the Single Market Programme. On the basis of Eurostat regional data and applying decomposition analysis and bootstrap significance tests, the paper draws a clear scenario for the Pre- and Post-Single Market periods. Results suggest that European industries trickled down among EU countries and regions prior the completion of the Programme, while afterwards national specialisation according to comparative advantage occurred in two core sectors: textiles and wearing apparel and transport equipment. Nonetheless, most of the structural change, particularly in more recent years, occurred in the internal geography of countries. Several economic forces pulling towards dispersion may rationalize the overwhelming significant decline in the inner-country localisation, congestion costs, intra-national decentralisation of production activities being among the most plausible. This leads to recognize that European economic integration have been simply a part of the story and additional overlapping advances, like the improvements in communication and transportation technology, may have played a competing role in the new configuration of the European economic geography.

JEL: L16, O18, R11.
Keywords: European economic integration, localisation, entropy measures.



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