Spatial concentration of economic activity and competitiveness of Central European regions

Abstract

The paper tackles with a still somewhat underdeveloped aspect of regional competiveness which regards to spillover effects stemming from spatial proximity of highly competitive neighbors. Although spillover effects are well recognized in the literature, we focus more on inter-regional concentration of business activity when enterprises are located in a particular district which is not far from the agglomeration center but not the center itself.

We check for statistical significance of spatial autocorrelation measures (local Moran’s I_i statistic) in order to identify spillovers between districts in Central European countries (Germany, Poland, Czech Republic and Slovakia). We use variables indicating Knowledge Intensive Services (KIS), in particular hi-tech KIS and information and communication services (including computer science). We compare 2009 with 2015 to notice agglomeration dynamics.

We observe statistically significant spillover effects in Central European countries in urbanization-type clusters as well as strengthening of the effect over time. Taking into consideration more detailed data for Poland we conclude that while hi-tech KIS mostly spill over to neighboring districts, the reverse pattern may be observed for computer science (programming and consultancy). One explanation is that this subsector relies on highly demanded workforce and a prestigious localization (in the agglomeration centers) works as a bargaining chip to attract programmers.

In order to measure the spillover effects more precisely it is recommended to define and measure the neighborhood of agglomeration centers using localization of firms based on GPS coordinates instead of centroids (geometric means) of districts – as shown in example of Poland.

Keywords

spatial agglomeration, spillover, regional competitiveness, KIS, Central European countries.

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