engleski

Deindustrialization and productivity in the EU

This article is envisioned as a first step in a comprehensive analysis of the European Union’s (EU) industrial base, designed to inform the current debate, and future policy decisions regarding deindustrialisation and reindustrialisation in the EU. We focus on the study of deindustrialisation and productivity, to determine the causes of deindustrialisation and its relation to productivity in the EU, and whether it can be explained primarily as a natural process, or alternatively as a negative economic trend. Our results indicate that the main causes of deindustrialisation in the EU were shifting demand patterns caused by rising GDP per capita, followed by growing international trade which corroborates the hypothesis that the process is natural. In the second part we take a closer look at manufacturing productivity as an integral cause of deindustrialisation. We analyse the impact of market dynamics, concentration and firm size on manufacturing productivity, where we find evidence which supports the conclusion that a higher level of market dynamics increases productivity, while firm size and market concentration seem to decrease industry productivity

EU, Deindustrialization, productivity

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