Agglomeration Economies and Technology Intensity of Industry Sector in Slovakia

Abstract

Agglomeration Economies and Technology Intensity of Industry Sector in Slovakia This paper analyses the geographical concentration of the industry sector according to technology intensity of industries. The analysis of spatial distribution employs a database including information on the number of plants at the 2-digit level of sector aggregation in the period 1997-2016. We estimate parameters for a spatial panel data analysis with random and fixed effects in order to examine two related research questions: (1) to what extent are the effects of internal economies of scale present in the technology-intensive industries; and (2) which types of external economies of scale are used by different industries depending on technology intensity. Our results indicate that the regional industrial structure of Slovakia has become more diverse. As a consequence of the phase of economic integration, some of the regions have been integrated into global production networks and maintain high levels of specialisation.

Industrial Structure and Economic Resilience of Non-Metropolitan Regions: An Empirical Base for the Smart Specialization Policies

“…Our regression models suggest that the effects of vertical and horizontal geographic location remained to be vital predictors of RDI SK in the whole period 1997-2017, confirming the findings and assumptions of [27]. Surprisingly, the effects of the economic structure have not changed substantially since 1997, although Slovak districts experienced a shift towards services, a diversification of the firm size structure caused by a decline and/or restructuring of large former socialist state-owned enterprises [81] or an increase in specialization mostly due to the inflow of FDI [78]. This is another confirmation of an assumption that specialization 'on what' is more important than the overall level of economic diversity/specialization [52].…”

“…Correspondingly, highly industrialized non-metropolitan regions included both well-performing districts in the western part of the country and structurally affected laggards [70], often dominated by large manufacturing companies. Smaller districts dominated by a single large manufacturing company were highly diverse in their prospects of RDI SK growth; those specialized in lower-tech industries did not experience any significant economic diversification [81], but no systematic association with RDI SK growth was found.…”

“…The lack of a systematic relationship between the industrial/firm size/sectoral structure and regional development documents a key role of two factors: (i) long cycles of regional evolutionary features including the inherited place-specific socioeconomic endowments [92] and (ii) agents, including the political representatives at a local, regional and national level, domestic and foreign entrepreneurs) who might substantially alter growth paths in their respective territories [93] through governance, entrepreneurship and innovation activity. Because many Slovak non-metropolitan and peripheral districts showed rather limited economic diversification and maintained their traditional specialization in (medium)-low tech industries [81], policy support of extra-regional trade and knowledge linkages were of vital importance for their long-term prosperity [94]. This should be combined with policies/initiatives leading to a stabilization of the local population and stimulation of entrepreneurial activity.…”

“…Sharp unemployment increases were recorded in rural agricultural peripheries, mostly in central and eastern parts of the country and in regions that were over-industrialized during the era of socialism, often hosting large branch plants of the former socialist industrial enterprises [80]. In the 1990s, only a minority of rural regions were able to develop new paths of industrial development [81]. Their adaptability was rather low, resulting from a former socialist overspecialization, and leading to various forms of regional lock-in, low levels of productivity, entrepreneurial activity and related variety.…”

Three decades of economic changes of rural Slovakia

“…It rose sharply and in the early 2000s approached the level of up to 20% (Trading Economics, 2023a). The economic transformation resulted in a decline in regional specialization due to the disintegration and demise of large industrial complexes (Rusnák & Lehocký, 2019). Together with the post-socialist transformation, the challenge for the economy was to harmonize with the continuing intensive development in the world (Kopačka, 1996).…”