CITY SPECIALISATION AND DIVERSIFICATION IN SOUTH EAST EUROPE (SEE) COUNTRIES
Cities are considered centres of economic activity and, presumably, they remain attractive locations for manufacturing firms so as long as benefits agglomeration economies prevail over the costs of agglomeration diseconomies. Agglomeration economies attract firms and labour to co-locate, while agglomeration diseconomies push firms and labour to relocate to decentralised locations (Richardson, 1995). Industry patterns formed across urban landscape of a country or a region will largely depend on the interplay of these opposite forces, as well as on industry- and firm-specific issues. The size of agglomeration and the economic structure may be interrelated and in some economies, mostly larger, patterns of city specialisation emerge. All cities are characterised by being either specialised or diversified, depending on whether their economic activity is concentrated in similar or dissimilar types of production – and larger cities tend to be more diversified (Duranton & Puga, 2000).
Jméno a příjmení autora:
Ivana Rašić Bakarić, Katarina Bačić, Sunčana Slijepčević
City, specialisation, diversification, manufacturing, agglomeration economies
DOI (& full text):
The main objective of the paper is to study the role of localisation and the urbanisation (or diversification) economies in urban post-transition SEE, by constructing and analysing manufacturing…více
The main objective of the paper is to study the role of localisation and the urbanisation (or diversification) economies in urban post-transition SEE, by constructing and analysing manufacturing specialisation and diversification measures over the period 2006-2013. The second objective of the paper is to analyse differences within manufacturing industry across cities in terms of their technological complexity. Industries are mapped across cities with over 50,000 populations (98 cities in six SEE, covering 35.3% of the total SEE population), a population threshold that is in line with previous literature. The data were obtained from Bureau Van Dijk’s Amadeus firm-level database containing, most importantly, balance sheet data and profit-and-loss account data for CEE. The analysis of manufacturing industry diversification and specialisation in the cities is based on the relation between agglomeration economies of the Marshall-Arrow-Romer type (economies of location or specialization) and the Jacobs-Porter type (economies of urbanization or diversification). Analysis results revealed that a particular specialisation pattern that would point to a homogenous system of cities throughout the region could not be confirmed. City specialisation in manufacturing was negatively correlated to city size in SEE, but this relation has not shown particularly strong. Similarly to other countries, top-specialised cities are specialised in manufacturing closely related to natural resources such as petroleum products and tobacco, pointing to advantages arising from “first nature” geography. However, diversity and specialisation are not exact opposites, as there are cities which are both diversified and specialised. The results of the second part of the analysis show that medium-low technology and low technology groups of industries in manufacturing prevail in total turnover, with 36.2% and 35.0% share, respectively. City specialization in the prevailing technology group in SEE, in medium-low technology, is highest in Bulgarian, Bosnian and Herzegovinian and in Croatian cities.