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Structural Change and Convergence

An Empirical Analysis of Production Structures in Europe

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Nicole Palan

This book studies both the causes and effects of country specialization and industry concentration. First, a detailed literature review of both theoretical and empirical work is given. Second, the most important indices used in studying the heterogeneity of countries and industries are analyzed. The book discusses the (dis-)advantages of these indices in detail and shows how empirical results depend on the index chosen. Third, the book studies the economic development of individual industries in detail and identifies crucial structural breaks in the development paths. Last, the heterogeneity across Western European countries is analyzed and the countries are assigned to individual clubs. In doing so, this book examines the similarity of countries in their economic development and identifies the drivers of these processes.

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List of Abbreviations

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aCDI Average Crude Diversification Index AR auto-regressive AUT Austria b employment share BEL Belgium CC Central European Club cswSHE country- and sector-weighted Heterogeneity Index cwSHE country-weighted Heterogeneity Index CYP Cyprus CZ Czech Republic DE Germany DK Denmark DIV Diversification Index E Employment EC European Community EEC European Economic Community EFTA European Free Trade Association ESP Spain EST Estonia EU European Union FIN Finland FBT Food, Beverages and Tobacco FR France GATT General Agreements on Tariffs and Trade GRC Greece GVC Global Value Chain HHI Hirschman-Herfindahl Index HR Human Resource HUN Hungary I Industries ICT Information and Communication Technologies IRL Ireland IRS increasing returns to scale IT Italy NiSHE Index of inter-industry Heterogeneity lCDI Index of Least Diversity LVA Latvia 9 LTU Lithuania MA moving average MLT Malta NEG New Economic Geography NC Northern European Club N Countries NLD Netherlands O Ogive Index OECD Organization of Economic POL Poland PRT Portugal RDI Refined Diversification Index R&D Research and Development S Sectors SC Southern European Club SEI Shannon Entropy Index SHE Index of Structural Heterogeneity NsSHE Index of inter-sectoral Heterogeneity SVK Slovakia SVN Slovenia SWE Sweden swSHE sector-weighted Heterogeneity Index UK United Kingdom US United States T Theil Index WTO World Trade Organization

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