Working Paper Series, FIEF - Trade Union Institute for Economic Research
No 176:
The Dynamics of European Industrial Structure
Patrik Gustavsson
Abstract: Has the European integration process lead to increased
specialisation and what drives changes in specialisation? To address these
questions we apply a model that incorporates endowments, technology and
increasing returns to scale (IRS). Analyses reveal that countries with high
capital accumulation have become increasingly specialised in
capital-intensive industries; this holds for both human and physical
capital while countries have diverged (converged) in physical (human)
capital abundance. No increased concentration of IRS industries to large
markets is found. Analysing R&D indicates scale economies in R&D at the
firm level and that firm level R&D is what drives competitiveness. Finally,
there is robust evidence for a domestic interdependency in industries
specialisation patterns.
Keywords: Specialisation; Productivity; Trade; Technology; Technology transfers; R&D; (follow links to similar papers)
JEL-Codes: C29; F12; O33; O52; (follow links to similar papers)
40 pages, May 3, 2002
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