Anna Iara / Iulia Traistaru
1 Introduction
Since 1990, Central and East European countries (CEECs) have experienced increased
economic integration with the European Union (EU), via trade and foreign direct
investment (FDI), which has led to a reallocation of resources across sectors and space.
While sectoral shifts in CEECs have frequently been analyzed (see for example,
Landesmann / Stehrer (2002)), the spatial implications of increasing economic
integration in the EU accession countries have not been investigated in-depth. Has a
relocation of economic activity taken place? Have patterns of regional specialization
and industrial concentration changed during the 1990s? How does regional
specialization relate to economic growth? Will the costs and benefits of EU membership
be evenly distributed across space? Will economic integration foster a convergence of
economic structures and income per capita?
The results of a recent research project1 indicate that increasing economic
integration with the EU has resulted in relocation of manufacturing activity and
changing patterns of regional manufacturing specialization in EU accession countries.
While patterns of manufacturing relocation and regional specialization are country
specific, Traistaru / Nijkamp / Longhi (2002) find that factor endowments and
geographical proximity to industry centers (capital regions) and EU markets explain the
economic geography of manufacturing in these countries.
Resmini (2002) analyzes determinants of location and growth of manufacturing
activities in border regions and finds that regions bordering the European Union have
been taking advantage of their location since the beginning of the transition process.
High wages, skilled labor force, and a well developed service sector have contributed to
increasing employment in manufacturing activities relative to national averages. Among
border regions, regions bordering the European Union and countries outside the EU
enlargement (non European Union, non accession countries) show the highest predicted
growth rates.
As pointed out in European Commission (2001a), over the past decade the real
convergence process in the ten CEE candidate countries have been slow with levels of
GDP per capita compared to the EU average (in PPS) ranging in 2000 from below 30
1 “European integration, regional specialization and location of industrial activity in accession
countries”, undertaken with financial support from the European Community’s PHARE ACE
Programem 1998. The results are presented in Traistaru / Nijkamp / Resmini (2003). The countries
included in this study are Bulgaria, Estonia, Hungary , Romania and Slovenia