IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa03p27.html
   My bibliography  Save this paper

A Study of the Competitiveness of Regions based on a Cluster Analysis: The Example of East Germany

Author

Listed:
  • Franz Kronthaler

Abstract

The Eastern enlargement of the EU is likely to increase the regional disparities within the EU. At the same time regional cohesion is a primary objective of EU economic policies. This raises the question of whether and when the regions of the accession countries will reach the average economic level of the EU. East Germany is used as an instructive example of a transition country for the integration process of the new Central and Eastern European member states. The objective of this study is to analyse whether some East German regions have the same economic capability by now as the regions in West Germany so that they are on a competitive basis with the West German regions and are able to reach the same economic level in the long run. If this is not the case, it is important to know more about the reasons for the economic weakness of the East German regions twelve years after unification. The study is based on a cluster analysis. Criteria for the cluster formation are several economic indicators, which provide information about the economic capability and their determinants. The choice of the indicators is based on a review of results of the theoretical and empirical literature on the new growth theory. The results show that most of the East German regions have not yet reached the economic capability and the competitiveness of their West German counterparts so that they - from the viewpoint of the new growth theory - are not in the position to reach the same economic level. According to this theory economic disadvantages are most notably the consequences of less technical progress, a lack of entrepreneurship and fewer business concentration. Under these points it is especially noteworthy that young well educated people leave these East German Regions so that human capital will be in the near future also a bottle-neck. Only a few regions in East Germany - those with important agglomerations - are comparable to those West German regions with average cabability and competitiveness, but not to those with economic capability and competitivness above average. Even those more advanced East German Regions suffer from economic disadvantages as less technical progress and low business concentration. There are important policy implications based on these results: regional policy funding in East Germany was not able to assist raising all regions to a sufficient level of competitiveness. It may be more effective to concentrate the regional policy funding on a selection of important agglomerations. This has also strong implications for the EU regional policy assuming that the accession countries will have similar problems in catching up to the economic level of the EU as have the East German regions. Keywords: Regional Disparities, Competitiveness, Cluster Analysis, East Germany, EU-Enlargement JEL classification: R12; P52; O18

Suggested Citation

  • Franz Kronthaler, 2003. "A Study of the Competitiveness of Regions based on a Cluster Analysis: The Example of East Germany," ERSA conference papers ersa03p27, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa03p27
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa03/cdrom/papers/27.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Härtel, Hans-Hagen, 2001. "Ostdeutschland im nationalen und europäischen Regionalvergleich," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 81(5), pages 292-296.
    5. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    6. Gianmarco I. P. Ottaviano & Diego Puga, 1998. "Agglomeration in the Global Economy: A Survey of the ‘New Economic Geography’," The World Economy, Wiley Blackwell, vol. 21(6), pages 707-731, August.
    7. Sternberg Rolf, 2001. "New Economic Geography und Neue regionale Wachstumstheorie aus wirtschaftsgeographischer Sicht," ZFW – Advances in Economic Geography, De Gruyter, vol. 45(1), pages 159-180, October.
    8. Börje Johansson & Charlie Karlsson & Roger R. Stough (ed.), 2001. "Theories of Endogenous Regional Growth," Advances in Spatial Science, Springer, number 978-3-642-59570-7, February.
    9. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lotero Contreras, Jorge & Posada Duque, Héctor Mauricio & Valderrama, Daniel, 2009. "Competitiveness of Colombian Departments observed from an Economic geography Perspective," Borradores Departamento de Economía 5519, Universidad de Antioquia, CIE.
    2. Delalić Adela & Šikalo Mirza & Numanović Selma, 2023. "Regionalization Based on Socio-Economic Development Indicators in Bosnia and Herzegovina – Example of Federation of Bosnia and Herzegovina," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 15-26, June.
    3. Massimo Aria & Giuseppe Lucio Gaeta & Ugo Marani, 2019. "Similarities and Differences in Competitiveness Among European NUTS2 Regions: An Empirical Analysis Based on 2010–2013 Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 431-450, February.
    4. Weinand, J.M. & McKenna, R. & Fichtner, W., 2019. "Developing a municipality typology for modelling decentralised energy systems," Utilities Policy, Elsevier, vol. 57(C), pages 75-96.
    5. Krkoska, Libor & Robeck, Katrin, 2008. "Business environment and enterprise behaviour in East Germany compared to West Germany and Central Europe," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 568-583, December.
    6. Stefan Arent & Wolfgang Nagl, 2011. "Unemployment Benefit and Wages: The Impact of the Labor Market Reform in Germany on (Reservation) Wages," ifo Working Paper Series 101, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Wolfgang Nagl & Stefan Arent, 2012. "Unemployment Benefits and Wages: Evidence from the German Hartz-Reform," ERSA conference papers ersa12p78, European Regional Science Association.
    8. Arent Stefan & Nagl Wolfgang, 2013. "Unemployment Compensation and Wages: Evidence from the German Hartz Reforms," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 233(4), pages 450-466, August.
    9. Wolfgang Nagl, 2014. "Lohnrisiko und Altersarmut im Sozialstaat," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 54, May.
    10. Charlotte Jarosch & Philipp Jahnke & Johannes Giehl & Jana Himmel, 2022. "Modelling Decentralized Hydrogen Systems: Lessons Learned and Challenges from German Regions," Energies, MDPI, vol. 15(4), pages 1-27, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kronthaler, Franz, 2003. "A Study of the Competitiveness of Regions based on a Cluster Analysis: The Example of East Germany," IWH Discussion Papers 179/2003, Halle Institute for Economic Research (IWH).
    2. Carine Nourry, 2012. "Dasgupta, D.: Modern growth theory," Journal of Economics, Springer, vol. 105(1), pages 97-100, January.
    3. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    4. Turnovsky, S., 2000. "Growth in an Open Economy: some Recent Developments," Papers 5, Warwick - Development Economics Research Centre.
    5. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    6. repec:ebl:ecbull:v:2:y:2002:i:1:p:1-15 is not listed on IDEAS
    7. Ricci, Francesco, 2007. "Channels of transmission of environmental policy to economic growth: A survey of the theory," Ecological Economics, Elsevier, vol. 60(4), pages 688-699, February.
    8. Xavier Sala-i-Martin, 2002. "15 Years of New Growth Economics : What Have we Learnt?," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 5(2), pages 5-15, August.
    9. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
    10. Palakiyèm Kpemoua, 2016. "Levels Of Education And Economic Performances Of Togo [Niveaux D’Education Et Performances Economiques Du Togo]," Working Papers halshs-01506650, HAL.
    11. Martin Zagler & Georg Dürnecker, 2003. "Fiscal Policy and Economic Growth," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 397-418, July.
    12. Bayraktar-Sağlam, Bahar & Yetkiner, Hakan, 2014. "A Romerian contribution to the empirics of economic growth," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 257-272.
    13. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    14. Themba G Chirwa & NM Odhiambo, 2019. "An Empirical Test Of Exogenous Growth Models: Evidence From Three Southern African Countries," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 64(220), pages 7-38, January –.
    15. Boucekkine, R. & Martínez, B. & Ruiz-Tamarit, J.R., 2013. "Growth vs. level effect of population change on economic development: An inspection into human-capital-related mechanisms," Journal of Mathematical Economics, Elsevier, vol. 49(4), pages 312-334.
    16. Voxi Heinrich Amavilah & Antonio Rodríguez Andrés, 2024. "Knowledge Economy and the Economic Performance of African Countries: A Seemingly Unrelated and Recursive Approach," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 110-143, March.
    17. Martín, Carmela & Mulas-Granados, Carlos & Sanz, Ismael, 2005. "Spatial distribution of R&D expenditure and patent applications across EU regions and its impact on economic cohesion," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 6, pages 41-61.
    18. Hatice KÜÇÜKKAYA, 2017. "EUREFE’17 International Conference," Turkish Economic Review, KSP Journals, vol. 4(3), pages 343-344, September.
    19. Iritié, B. G. Jean-Jacques, 2014. "Enjeux des politiques industrielles basées sur les clusters d'innovation: cas des pôles de compétitivité [Issues of Innovative Clusters-based Industrial Policy: Case of Pole of Competitiveness]," MPRA Paper 54429, University Library of Munich, Germany.
    20. Aykut Kibritçioglu, 2002. "On the Smithian origins of "new" trade and growth theories," Economics Bulletin, AccessEcon, vol. 2(1), pages 1-15.
    21. Arvanitidis, Paschalis & Petrakos, George & Pavleas, Sotiris, 2007. "Determinants of economic growth: the experts’ view," Papers DYNREG20, Economic and Social Research Institute (ESRI).

    More about this item

    Keywords

    regional disparities; competitiveness; cluster analysis; east germany; eu-enlargement jel classification: r12; p52; o18;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa03p27. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.