42019, XXII, 2
Economics
DOI: 10.15240/ ul/001/2019-2-001
In oduc ion
Ci ies a e conside ed cen es o economic
ac i i y and, p esumably, hey emain a ac i e
loca ions o manu ac u ing i ms so as long
as bene i s agglome a ion economies p e ail
o e he cos s o agglome a ion diseconomies.
Agglome a ion economies a ac i ms and
labou o co-loca e, while agglome a ion
diseconomies push i ms and labou o eloca e
o decen alised loca ions (Richa dson, 1995).
Indus y pa e ns o med ac oss u ban landscape
o a coun y o a egion will la gely depend on
he in e play o hese opposi e o ces, as well as
on indus y- and i m-speci i c issues. The size o
agglome a ion and he economic s uc u e may
be in e ela ed and in some economies, mos ly
la ge , pa e ns o ci y specialisa ion eme ge.
All ci ies a e cha ac e ised by being ei he
specialised o di e si i ed, depending on whe he
hei economic ac i i y is concen a ed in simila
o dissimila ypes o p oduc ion – and la ge
ci ies end o be mo e di e si i ed (Du an on &
Puga, 2000).
An o e iding p oblem in U ban Economics
esea ch in Sou h-Eas Eu ope is he lack o
da a. In he case o ex-Yugosla coun ies, we
see no egula yea ly s a is ics on ci ies since
he 1990es. The da a hind ance is p obably
he main eason why esea ch in CEE is
also mos ly ocused on egions and no on
ci ies. Resea ch opics in he egional con ex
mos ly ange wi hin he income con e gence/
dispa i ies issue. Resul s om his esea ch can
implici ly shed some ligh on he issue o ci y
specialisa ion.
Economic de elopmen o ci ies in he
Sou h-Eas Eu ope since he end o he
Wo ld Wa II can be seen h ough wo dis inc
economic de elopmen pe iods: a) The ull-
scale indus ial de elopmen o ci ies. Ci ies
expand hei bo de s as economic mig an s
om all he coun ies’ egions join he wa e o
ising economic ac i i y; b) The e ia isa ion
phase upon he b eakdown o communism and
he onse o social and economic ansi ion o
democ acy and ma ke economy. Economic
planning is quickly dismissed as a elic o
socialis planning and many ci ies a e le o
cope wi h he ising unemploymen coming
om he weakened indus ies. I mus be
no ed ha he deindus ialisa ion p ocess
in he me opoli an egions has s a ed in some
ci ies e en be o e he ansi ion p ocess, in he
1980s, as documen ed in C oa ia’s capi al
de elopmen (S i čić-Go o ac, 2006). Howe e ,
while wes e n EU economies expe ienced
u ban sh inking since he 1970s, CEE coun ies
con inued o suppo indus y and neglec
se ice sec o up o 1989 which esul ed
in o e g ow h o indus ial agglome a ions
(Rumpel e al., 2013).
The de elopmen o me opoli an egions
con as s he de elopmen o o me indus ial
ci ies. The newes indica o s o de elopmen
o me opoli an egions in Eu opean ansi ion
and pos - ansi ion economies a ailable
a EUROSTAT and OECD indica e ha
me opoli an egions ha e la gely con e ged o
he EU a e age in income pe capi a and o he
economic indica o s. Acco ding o he ex ensi e
esea ch o Cen al and Eas e n Eu ope ci ies
by Lin z e al. (2004), ma ke o ces spu ed
ci y de elopmen , bu mos ly in he case o
me opoli an egions. U ban a ac ion o ces
o me opolises ha e d awn o eign in es o s
and ha e u he s eng hen he posi ion o he
capi al-ci ies wi hin he na ional u ban sys em.
Doga u e al. (2014) ha e ound ha capi al
ci y egions ecei ed mo e g een i eld FDI and
a ac ed a wide a ie y o in es men s in bo h
sec o s and unc ions.
The as g ow h dynamics o me opoli an
egions is unma ched by o me indus ial
o indus ial & ag icul u al egions. To some
CITY SPECIALISATION
AND DIVERSIFICATION IN SOUTH EAST
EUROPE (SEE) COUNTRIES
I ana Rašić Baka ić, Ka a ina Bačić, Sunčana Slijepče ić
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5
2, XXII, 2019
Economics
ex en , his can explain he le el o egional
dispa i ies a NUTS le el III in he new membe
s a es ha a e signi i can ly highe han in he
incumben membe s: he a e age le el o he
measu e o dispe sion in he yea 2011 in new
membe s a es is 35.1 pe cen , compa ed o
25.8 pe cen in incumben membe s. Lin z e
al. (2004) epo he con ex o he se back o
many old indus ial ci ies ha hos ed impo an
indus ial plan s h ough he lowe business
s a -up a e o local popula ion. Lin z e al.
(2007) no iced ha many old indus ial ci ies
in CEE coun ies, which ha e been d i e s o
g ow h in CEE coun ies o decades, ha e been
acing majo p oblems (socioeconomic and
en i onmen al) since he economic ansi ion
and ha hey ha e expe ienced a se back. I
could be deba ed ha he eliance o he local
popula ion on one o ew big indus ies ha ha e
employed he whole ci y and egional wo king
popula ion has inhibi ed he en ep eneu ial
spi i and hus also ci ies’ economic eco e y
and u he g ow h. New dispa i ies be ween
di e en CEE ci ies du ing ansi ion ha e been
dependen on loca ion, inhe i ed economic
s uc u e and en i onmen al quali y (Lin z e
al., 2007), bu also s i ed by demog aphic
changes and ou mig a ion (Sco & Kühn,
2012). While mos ly capi al ci ies and egional
cen es de eloped (pa ly due o Eu opean
union unds), pe iphe ies expe ienced u ban
economic decline connec ed wi h closu e o
indus ial en e p ises (Lin z e al., 2007; Sýko a
& Bouza o ski, 2011).
As poin ed ou , esul s om egional
esea ch can be use ul in lea ning mo e abou
ci ies in CEE. Regional de elopmen policies
in Eu opean ansi ion economies ha e been
e i ed wi h he poli ical and economic desi e o
join he EU. E idence on egional specialisa ion
has shown ha inc ease in specialisa ion in
he incumben EU membe s was insubs an ial
(OECD, 1999; 2004), hus isks associa ed
wi h g ea e specialisa ion b ough by EU
in eg a ion as deba ed by he US economis
K ugman (1991), we e p obably illuso y.
Recen ly p esen ed e idence o he new EU
ansi ion membe s has shown ha in he case
o Cen al Eu opean coun ies (CEC) changes
in he ela i e egional specialisa ion a e mo e
dynamic han in he incumben membe s
(S ie le– on Schü z & S ie le, 2013).
The main aim o his pape is o disce n
whe he pa e ns in he ela i e specialisa ion
and di e si i ca ion o manu ac u ing indus y
in 98 SEE (Bosnia and He zego ina, Bulga ia,
C oa ia, Se bia, Slo enia and Romania)
ci ies exis , by cons uc ing specialisa ion
and di e si i ca ion measu es o e he pe iod
2006-2013. The a icle is s uc u ed as ollows:
Sec ion 1 p o ides a li e a u e o e iew on ci y
specialisa ion issues, Sec ion 2 desc ibes he
da ase , he sample o ci ies and discusses
ep esen a i eness issues. In his sec ion
measu es o specialisa ion (and di e si i ca ion)
a e applied o he da ase , wi h he pu pose
o cap u e he ai s o ci ies’ economic
s uc u e. Sec ion 3 analyses di e ences wi hin
manu ac u ing indus y ac oss ci ies in e ms
o hei echnological complexi y and uses
clus e analysis o iden i y g oups o ci ies on
he basis o mul i a ia e da a, namely indices o
manu ac u ing-indus y specialisa ion, and ci y
size using popula ion da a. These measu es
enable ecognising indus ial pa e ns in u ban
space h oughou coun ies and he SEE egion.
Sec ion 4 o e s conclusions.
1. Li e a u e Re iew
Specialisa ion o ci ies is an impo an opic in
u ban economics. Du an on and Puga (1999)
summa ize he mos impo an i ndings on
di e si i ca ion and specialisa ion o ci ies,
mos ly coming om ci y esea ch in he US,
in ew s ylised ac s (pa aph., p. 2-9): “Bo h
specialised and di e si i ed ci ies exis ; La ge
ci ies end o be mo e di e si i ed; Indi idual
ci y specialisa ions a e s able o e ime; Mos
eloca ions a e om di e si i ed o specialised
ci ies.” In Hende son (1997) esea ch on
di e si y and ci y size, he has ound ha
la ge ci ies (popula ion abo e 500,000) in
he US we e mo e specialised in se ices and
medium-sized ci ies we e mo e specialised
in manu ac u ing. The la e we e also mo e
specialised in ma u e-indus ies ( ex iles, ood,
pulp and pape ) han in new indus ies on lowe
le els o agg ega ion. Du an on and Puga
(2005) e ealed a shi in ci y specialisa ion in
he US om sec o al o unc ional specialisa ion
ha came as a esul o disin eg a ion o
unc ions: managemen was loca ed in la ge
ci ies and p oduc ion unc ions in smalle ci ies.
Da ies and Hende son (2008) ound ha his
sepa a ion is use ul o headqua e s because
o he a ailabili y o di e en ia ed local supplie s
and because o he p esence o he o he
headqua e s.
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62019, XXII, 2
Economics
Cuad ado-Rou a and Rubalcaba-Be mejo
(1998, p. 134) posi ha specialisa ion is
“ o emos a his o ical ac ” ha “ ends o
ollow i s own li e cycle” and he specialisa ion
cycle may end i specialisa ion become
uncompe i i e. O he easons may be changes
in in e na ional dynamics o i “su i cien size is
eached o impose a di e en logical pa e n”.
Ci ies a e undoub edly ecognised as
cen es o knowledge gene a ion, di usion
and accumula ion (Fuji a & Mo i, 2005).
The li e a u e is la gely inconclusi e as o
whe he agglome a ion ex e nali ies a ise
be ween i ms belonging o ei he he same
o o di e en indus ies (Hende son, 1986;
an Hagen & Hammond, 1994; Glaese ,
Kallal, & Scheinkman, 1992), hough. As pu
o wa d by Ma shall (1890), A ow (1962),
and Rome (1986) knowledge spillo e s may
a ise be ween i ms wi hin he same indus y
and be suppo ed by local concen a ions
o a pa icula indus y ( he Ma shall-A ow-
Rome (MAR) ype localiza ion o ’specializa ion’
ex e nali ies). Acco ding o he MAR ype
ex e nali ies, knowledge spillo e s in specialized
geog aphically-concen a ed indus ies s imula e
g ow h. On he o he hand, he no ion ha
indus ial di e si y di ec ly con ibu es o
agglome a ion economies comes om Jacobs
( he Jacobs-Po e ype ex e nali ies, o
economies o di e si i ca ion Jacobs (1969),
who a gues ha he mos impo an knowledge
ans e s s em om a ie y and di e si y o
geog aphically p oxima e indus ies (Da Sil a
Ca ela, Goncal es, & Po cile, 2010). Applied o
ci ies, he di e si i ca ion o an indus y in a ci y
helps knowledge spill-o e s be ween i ms, and
he e o e he g ow h o ha ci y. Kolehmainen
(2003) a gues ha he en i onmen ha
agglome a ion cons i u es is a mo e complex
and includes mo e in e ela ed elemen s o be
conside ed, including ins i u ional se ing and
beha iou o i ms. S ojcic and O lic (2015) poin
ou ha knowledge spillo e s and coope a ion
be ween i ms and scien i i c ins i u ions can
ul ima ely lead o inc easing e u ns, d awing
on NEG li e a u e.
Th ough ade libe alisa ion and EU
in eg a ion p ocesses, pos - ansi ioning Eu ope,
has opened o s uc u al changes. These
p ocesses can lead o inc ease in specialisa ion
ac oss key manu ac u ing loca ions, including
ci ies. K ugman (1991) has p edic ed ha
he emo al o ade ba ie s and Eu opean
in eg a ion will b ing abou mo e indus ial
specialisa ion (o concen a ion) ac oss EU
and, as a consequence, mo e exposu e o
asymme ic economic shocks. E idence
om he incumben EU membe s o e he
las wo decades was no suppo i e o his
p edic ion, a leas a he egional le el (OECD,
2004). A mo e e iden p ocess o s uc u al
change can be obse ed in he expansion o
he se ice sec o , he e ia isa ion, a leas
ac oss mos de eloped egions (Ma elli, 2004).
Howe e , Longhi, Musolesi and Baumon
(2014) a gue ha he me opoli an a eas and
majo egional cen es o la ge EU coun ies
may accumula e mos bene i s om Eu opean
in eg a ion. U ban egene a ion p ojec s in
some ci ies (e.g. Bucha es in Romania) we e
connec ed wi h ealisa ion o Eu opean Union
unds (Hla áček e al., 2016). Obse ing hese
spa ial uni s as “ he Eu opean co e”, wi h he
highes p obabili y o inc easing e u ns o
eme ge h ough concen a ion o economic
ac i i ies, wi h an econome ic model Longhi,
Musolesi and Baumon (2014) show how 35
me opoli an a eas o e he pe iod o 1980-
2005 ha e unde gone s uc u al changes due
o in eg a ion and de elopmen p ocesses.
Longhi, Musolesi and Baumon ’s esea ch has
shown ha specialisa ion has inc eased and ha
sec o al s uc u es ha e become mo e simila in
se ices. Mo eo e , he in eg a ion join ly wi h
de elopmen posi i ely in l uence specialisa ion
in he sense ha posi i e e ec o de elopmen
on specialisa ion is s onge in me opoli an
a eas ha a e be e in eg a ed wi h EU.
S ie le- on Schü z and S ie le (2013)
use a comp ehensi e se o measu es o
concen a ion and specialisa ion o he pe iod
anging om 1995 o 2010 o p o ide an
o e iew o change in he economic s uc u es
in he EU, ega ding in eg a ion p ocesses as
he igge o change. Measu es we e applied
o di e en indica o s o economic ac i i y a
a ious sec o al b eakdowns o all EU membe
s a es, including ansi ion economies. The
spa ial uni o obse a ion we e egions. On
an agg ega ed le el, dynamics o he le el o
specialisa ion and concen a ion appea ed
slow, e en when obse ed in he ligh o EU
enla gemen and in he pos -2008 pe iod o
economic c isis. By obse ing s uc u al ai s
by sec o s, he au ho s ound ha in EU-15
and EU ansi ion economies he concen a ion
o some low- ech indus ies was highe and
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7
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Economics
he concen a ion o high- ech indus ies was
lowe . As expec ed hough, new membe
coun ies’ concen a ion o high- ech indus ies
is compa a i ely lowe . In some egions and in
some sec o s he e is indica ion o con e gence
o new membe coun ies’ p oduc ion s uc u es
o ha o EU-15, mos ma kedly in high- ech
sec o manu ac u ing.
Longhi, Nijkamp and T ais a u (2005)
esea ched e ec s o Eu opean in eg a ion
on pa e ns o manu ac u ing loca ion and
specialisa ion o Bulga ia, Es onia, Hunga y,
Romania and Slo enia, accession coun ies a
ha ime, o e he pe iod 1990-1999. Based on
he p esump ion ha economic in eg a ion will
esul in mo e e i cien alloca ion o esou ces
h ough s uc u al changes and adjus men ,
au ho s ca y ou an econome ic analysis
sea ching o he de e minan s o manu ac u ing
loca ion. The economic geog aphy o
manu ac u ing in hese coun ies was mo e in
line wi h he p edic ions o classical and new
ade heo ies han wi h p edic ions o NEG as
i was de e mined by ac o endowmen s and
p oximi y o la ge ma ke s.
Indus y pa e ns o med ac oss u ban
landscape o a coun y o a egion will la gely
depend on he in e play o hese opposi e
o ces, as well as on indus y- and i m-speci i c
issues. The size o agglome a ion and he
economic s uc u e may be in e ela ed and in
some economies, mos ly la ge , pa e ns o ci y
specialisa ion eme ge.
E idence on he p oduc i i y ad an ages
ha i ms can app op ia e by loca ing in la ge
ci ies and in mo e di e si i ed loca ions can
be ound in he empi ical li e a u e. Fi ms
in la ge ci ies a e o e all mo e p oduc i e
han i ms in smalle ci ies (Combes e al.,
2012; Rosen hal & S ange, 2004), due o
a numbe o easons, including o emos he
agglome a ion economies, bu also localised
na u al ad an age, s onge wo ke and i m
selec ion (Combes e al., 2012). Fu he mo e,
p oduc i i y ad an ages o i ms loca ed in
ci ies as mo e di e si i ed loca ions a e no ed
o e i ms in mo e specialised indus ial-dis ic -
ype o a eas (Di Giacin o e al., 2014) p o ide
con incing e idence o I aly). Howe e ,
e idence also shows ha links be ween
e i ciency and he ype o agglome a ion
economies a e o be obse ed in con ex o
he coun ies’ de elopmen le el. Fo example,
Da Sil a Ca ela, Gonçal es, and Po cile’s
esea ch (2010) on he ela ion be ween ypes
o agglome a ion economies (specializa ion
s. di e si i ca ion) and labou p oduc i i y o
524 B azilian municipali ies in 1997 and 2007
had shown ha specialised municipali ies we e
o e -pe o ming. Au ho s ha e used i ni e-
mix u e eg essions and municipali ies ha e
shown pola ised, wi h he o e -pe o ming
g oup o municipali ies being signi i can ly
specialised, while he opposi e was ound o
he unde pe o ming g oup.
2. Ci y Specialisa ion
and Di e si i ca ion in SEE
2.1 Da ase
The main aim o his pa o he pape is o disce n
whe he pa e ns in he ela i e specialisa ion
and di e si i ca ion o manu ac u ing indus y
in 98 SEE ci ies exis , by cons uc ing
specialisa ion and di e si i ca ion measu es
o e he pe iod 2006-2013. Indices ha a e
used in measu ing specializa ion ( ela i e
specialisa ion index) and di e si y ( ela i e
di e si i ca ion index) o 98 ci ies in six SEE
coun ies a e cons uc ed ollowing he wo k o
Du an on and Puga (2000).
The empi ical analysis was conduc ed on
la ge da ase o 63,506 manu ac u ing i ms
obse ed o e he pe iod 2006-2013. The da a
employed in his analysis we e ob ained om
he la ge pan-Eu opean i m le el da abase
Amadeus p o ided by Bu eau an Dijk. The uni
o analysis is he i m de i ned as a legal en i y,
as opposed o he es ablishmen . The indus y
da a we e agg ega ed om i m-da a ob ained
in Bu eau an Dijk’s Amadeus da abase o
Cen al and Eas e n Eu ope o he pe iod
2006-2013. The geog aphical uni s a e ci ies
abo e 50,000 inhabi an s in six SEE coun ies
(Bosnia and He zego ina, Bulga ia, C oa ia,
Se bia, Slo enia and Romania). The numbe o
ci ies in each coun y and hei sha e o he o al
na ional popula ion a e as ollows: Bosnia and
He zego ina – 12 ci ies o 35.6% o he 2011
popula ion; Bulga ia – 18 ci ies o 44.7% o he
2011 popula ion; C oa ia – nine ci ies o 35.4%
o he 2011 popula ion; Romania – 38 ci ies o
32.8% o he 2011 popula ion; Se bia – 17 ci ies
o 35.7% o he 2011 popula ion; Slo enia –
ou ci ies o 24.8% o he 2011 popula ion.
To p oduce he ci y-class-size anges, he
o al popula ion o he ci y a ea was used. The
g ea es numbe o he obse a ions, 37.1%
e e s o i ms loca ed in la ge ci ies (ci ies
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82019, XXII, 2
Economics
wi h mo e han 500,000 inhabi an s), ollowed
by i ms loca ed in ci ies be ween 100,000 and
249,000 inhabi an s (24.2% o he obse a ions)
and i ms loca ed in ci ies be ween 50,000 and
99,000 inhabi an s (Tab. 1).
Tab. 1 displays he sec o al dis ibu ion o
he obse a ions in he sample. Abou 63% o
he obse a ions e e o ou indus y g oups:
ood, be e ages and obacco indus y, u ni u e,
o he manu ac u ed goods and ex iles, and o
appa el and lea he indus y. Since da a on
he numbe o i ms in manu ac u ing we e no
publicly a ailable o he selec ed ci ies he o al
numbe o manu ac u ing i ms in he coun y is
eso ed o as ano he op ion o assessing da a
co e age.
The analysis o manu ac u ing indus y
di e si i ca ion and specialisa ion in he ci ies is
based on he ela ion be ween agglome a ion
economies o he Ma shall-A ow-Rome
ype (economies o loca ion o specializa ion)
and he Jacobs-Po e ype (economies o
u baniza ion o di e si i ca ion). Hende son’s
esea ch (1997) on US ci ies has shown ha
pa e ns o ci y specialisa ion-size can be
obse ed. His esea ch shows ha ci ies o
simila sizes a e o en specialised in simila
indus ies i.e. ci ies wi h popula ion abo e
500,000, conside ed la ge ci ies, we e mo e
specialised in se ices and medium-sized ci ies
we e mo e specialised in manu ac u ing. The
la e we e also mo e specialised in ma u e-
indus ies ( ex iles, ood, pulp and pape ) han
in new indus ies on lowe le els o agg ega ion.
In his esea ch on manu ac u ing indus ies
in he U.S. and B azil Hende son did no i nd
u banisa ion economies, bu did i nd e idence
o localisa ion economies explaining ha by
he ac ha esou ces in manu ac u ing a e
gene ally no mo e p oduc i e in la ge ci ies
Indus y
Ci y size class
To al
less han
99,000
100,000-
249,000
250,000-
499,999 > 500,000
Food, be e ages, obacco 17,715 16,315 10,997 23,840 68,867
Tex iles, appa el, lea he 15,783 16,292 9,947 20,677 62,699
Wood, co k, pape , p in ing, eco ded
media 11,792 11,053 8,759 22,474 54,078
Coke and e i ned pe oleum p oduc s 128 124 12 281 545
Chemicals, pha maceu icals, ubbe ,
plas ic 7,943 8,336 5,647 14,308 36,234
O he non-me allic mine al p oduc s 4,196 4,111 2,239 6,184 16,730
Basic me als, me al p oduc s 14,855 15,772 9,871 19,796 60,294
Machine y and equipmen 3,161 3,909 2,738 6,399 16,207
Compu e , el. and op ical p oduc s, el.
equipmen 3,469 5,490 3,317 12,056 24,332
T anspo equipmen 1,534 2,407 1,087 2,483 7,511
Fu ni u e, o he manu ac u ed goods 12,588 16,506 12,491 25,515 67,100
Businesses by size
Small i ms (less han 50 employed) 82,668 88,653 60,269 139,904 371,494
Medium sized i ms (50-250 employed) 7,606 8,559 4,557 9,630 30,352
La ge i ms (mo e han 250 employed) 2,890 3,103 2,279 4,479 12,751
To al 93,164 100,315 67,105 154,013 414,597
Sou ce: Amadeus, Na ional S a is ical O i ces
Tab. 1: The sample – numbe o obse a ions
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Economics
and ha esou ces in any indus y a e mo e
p oduc i e in places whe e he e is mo e o
simila ac i i ies (Hende son, 2003). Cuad ado-
Rou a and Rubalcaba-Be mejo (1998, p. 134)
posi ha “ he e is a close ela ionship be ween
he ole o a ci y wi hin a hie a chical sys em
and i s deg ee and ype o specialisa ion”.
Looking in o he specialisa ion i s , he
sha e o employmen in ci y u con ained in
indus y j is calcula ed. Since indus ies come
in di e en sizes, he size o indus ies is
no malized by hei sha e a na ional le el (in
his case by sha e a he sample le el o his
coun y). In such way, he ex en o which an
indus y j is ep esen ed in ci y u is iden i i ed.
By doing so, he obse ed indus y dis ibu ion
in ci y u is compa ed wi h ha o na ional
sample as a whole. Any alue o specializa ion
index abo e 1 indica es ha an indus y in a ci y
a ea has an employmen concen a ion abo e
he na ional a e age. The specialisa ion index
(no malised sha e o localiza ion coe i cien ) is
gi en as sha e o indus y i in ci y j is di ided
by he co esponding sec o al sha e o whole
popula ion:
(1)
whe e i is he sha e o indus y i in ci y j, while
xi is he co esponding sha e a he na ional
le el. The ela i e-specialisa ion index is gi en
as:
(2)
The ex en o ci y di e si i ca ion is measu ed
using he ela i e di e si i ca ion index (RDI).
The basis o i s calcula ion is he in e se o
He i ndahl-Hi schman index, which is ob ained
om he a io be ween one and he sum o
he squa es o he sec o al sha e in ci y’s
employmen . The di e si i ca ion index is:
(3)
DI akes he alue 1 in he case whe e
economic ac i i y in he ci y unde conside a ion
is ully concen a ed in a sec o . Highe le els
o his index sugges g ea e le el o di e si y,
while smalle le els a e associa ed wi h highe
specializa ion. Howe e , acco ding o Du an on
and Puga i is impo an o co ec his index
o di e ences in sec o al employmen sha es
a he na ional le el (Du an on & Puga, 2000),
wha leads o ela i e di e si i ca ion index.
Rela i e di e si i ca ion index (RDI) is he
in e se o he sum o he absolu e alues o
he di e ence be ween each sec o ’s sha e
in ci y’s employmen and i s sha e in na ional
employmen o each ci y o e all sec o s. This
index will be highe as he s uc u e o ac i i ies
in he ci y unde con i gu a ion ends o e l ec
he di e si y o he na ional economy. Rela i e
di e si i ca ion index (RDI) is gi en by:
(4)
Measu es o specialisa ion and di e si i ca ion
we e applied o he da ase used in his
esea ch. Tab. 2 displays mos and leas
specialized ci ies wi h o e 50,000 inhabi an s
in SEE coun ies, in he pe iod om 2006-2013.
Mos specialized ci y (Bu gas) is 13 imes mo e
specialised by i s index alue han he leas
specialised one (Veliko Ta no o). Two ou o 10
mos specialized ci ies a e specialised in coke
and e i ned pe oleum p oduc s indus y sec o
and h ee ci ies in obacco indus y sec o . This
ype o specialisa ion is associa ed o ci ies’
na u al esou ces o , in o he wo ds, o localised
na u al ad an age. When conside ing he leas
specialized ci ies, he highes alues o RSI
a e p esen among sec o s o manu ac u ing
indus y. In he case o he leas specialized
ci ies (Veliko Ta no o and Gab o o in Bulga ia)
he s uc u e o manu ac u ing indus y o
a pa icula ci y is close o he na ional.
Al hough no s ong, he nega i e co ela ion
be ween ci y specializa ion and i s size
measu ed by numbe o inhabi an s (-0.314)
con i ms p e ious i ndings ha specialized
ci ies end o be gene ally smalle (Du an on
& Puga, 2000). In line wi h ha , i should
be no ed ha among 15 mos specialized
ci ies in SEE he e is no ci y wi h mo e han
250,000 inhabi an s. I is in e es ing o no e
ha among he op 20 mos specialized ci ies
he e is no Slo enian ci y, which could lead o
he conclusion ha coun ies wi h highe GDP
pe capi a in SEE ha e lowe sha e o highly
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10 2019, XXII, 2
Economics
specialized ci ies, bu he economy size canno
be uled ou as an al e na i e explana ion. In
mos o cases o high specializa ion in Eu ope,
indus ial specialisa ion e e s o he high sha e
o ex iles, ood p ocessing, and in hese cases
manu ac u ing sec o s a e no di e se enough
o suppo o he sec o s.
Acco ding o A a an (1986, p. 45) economic
di e si y is de i ned as “ he p esence in an a ea
o a g ea numbe o di e en ypes o indus ies”
o “ he ex en o which economic ac i i y o
a egion is dis ibu ed among a numbe o
ca ego ies. Much o he li e a u e and esea ch
on economic di e si y poin s ha di e se
economies a e mo e esis an o l uc ua ions
associa ed wi h he business cycles (Hackba
& Ande son, 1975; Dissa , 2003), and lowe
ou pu ola ili y is ela ed wi h highe economic
g ow h (Ramey & Ramey, 1995).
Rank Ci y Sec o
Rela i e
specia liza ion
index (RSI)
Ci y
popula ion
1 Bu gas (BG) Coke and e i ned pe oleum
p oduc s 27.22 198,725
2 Bijeljina (BA) O he anspo equipmen 24.36 114,663
3 Ploieş i (RO) Tobacco p oduc s 17.99 209,945
4 Yambol (BG) Mo o ehicles, aile s and semi-
aile s 16.18 71,561
5 Giu giu (RO) Coke and e i ned pe oleum
p oduc s 15.90 61,353
6 Blagoe g ad (BG) Tobacco p oduc s 15.70 70,293
7D obe a-Tu nu
Se e in (RO) Chemicals and chemical p oduc s 15.18 92,617
8 Smede e o (RS) Basic me als 14.87 64,175
9 Nis (RS) Tobacco p oduc s 14.06 183,164
10 Galaţi (RO) Basic me als 13.69 249,432
11 Velika Go ica (HR) O he manu ac u ing 13.37 63,517
12 K alje o (SR) O he anspo equipmen 13.23 64,175
13 Tâ go iș e (RO) Basic me als 13.08 79,610
14 Banja Luka (BA) Basic pha maceu ical p oduc s and
p epa a ions 13.00 199,191
15 Mos a (BA) Repai /ins alla ion o machine y and
equipmen 12.63 113,169
……. …….. ……………………………. ………..
94 Ple en (BG) Basic me als 2.57 101,978
95 Ruse (BG) Fu ni u e 2.33 147,055
96 Plo di (BG) P in ing and ep oduc ion o
eco ded media 2.32 341,567
97 Gab o o (BG) Rubbe and plas ic p oduc s 2.28 56,003
98 Veliko Ta no o (BG) Rubbe and plas ic p oduc s 1.95 68,676
Sou ce: p epa ed by he au ho s on Bu eau Van Dijk’s Amadeus da abase
o Cen al and Eas e n Eu ope, 2006-2013.
No e: A e age alue o RSI o e he pe iod is gi en.
Tab. 2: Mos and leas specialized ci ies in he pe iod 2006-2013
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11
2, XXII, 2019
Economics
Coun y
GDP pe capi a
(cu en p ices, eu o)
Ci ies
20 mos specialized
ci ies
o al
sub-sample
by coun ies
2013 2006-2013 2013
BA 3,569 3 12
BG 5,800 4 18
HR 10,200 1 9
RO 7,200 7 38
RS 4,800 5 17
SI 17,400 0 4
To al – 20 98
Sou ce: p epa ed by he au ho s on Bu eau Van Dijk’s Amadeus da abase
o Cen al and Eas e n Eu ope and Eu os a da abase, 2006-2013.
Rank Ci y (coun y) RDI
1 Plo di (BG) 2.91
2So i a (BG) 2.84
3 V a sa (BG) 2.81
4 Belg ade (SR) 2.77
5 Cluj-Napoca (RO) 2.77
6 Bucha es (RO) 2.54
7 Veliko Ta no o (BG) 2.34
8 No i Sad (RS) 2.30
9 Buzău (RO) 2.07
10 Bihać (BH) 1.99
11 Dob ich (BG) 1.97
12 Gab o o (BG) 1.90
13 Baia Ma e (RO) 1.90
14 S a a Zago a (BG) 1.90
15 Va na (BG) 1.88
………….
94 D obe a-Tu nu Se e in (RO) 0.83
95 Bâ lad (RO) 0.82
96 V anje (RS) 0.79
97 K anj (SI) 0.78
98 Smede e o (RS) 0.71
Sou ce: p epa ed by he au ho s on Bu eau Van Dijk’s Amadeus da abase
o Cen al and Eas e n Eu ope, 2006-2013.
No e: Capi al ci y ank: Sa aje o (29) Zag eb (33) and Ljubljana (48).
Tab. 3: Dis ibu ion o 20 mos specialised ci ies by coun ies and GDP pe capi a
in SEE, 2006-2013
Tab. 4: Mos and leas di e si i ed ci ies in SEE, 2006-2013
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12 2019, XXII, 2
Economics
The ela ionship be ween ci y size measu ed
by o al employmen in manu ac u ing/ o al
popula ion and i s ela i e di e si i ca ion
index is shown on Figs. 1 and 2. The e is
a p e y s ong posi i e co ela ion be ween
he ci y size (measu ed by employmen in
manu ac u ing) and he ela i e di e si i ca ion
index, 0.6681. The co ela ion be ween ela i e
di e si i ca ion index and ci y size measu ed
by o al popula ion is e en highe , 0.7543 and
indica es ha di e si i ca ion inc eases wi h ci y
size i.e. wi h he size o he local labou ma ke .
These esul s a e in line wi h he li e a u e
(Du an on & Puga, 2000). Also Da Sil a Ca ela,
Goncal es and Po cile (2010), measu ing
ela i e specialisa ion and di e si i ca ion in 524
B azilian ci ies con i med ha di e si i ca ion
inc eases wi h ci y size.
La ge ci ies ha e la ge a ie y o p oduc ion
inpu s, hus enabling concen a ion and
economies o scales. G ea e numbe o di e en
indus ies can os e he exchange o ideas,
so he i ms can bene i om he gene a ion
and di usion o he knowledge. La ge ci ies
a e usually mo e di e si i ed and knowledge-
in ensi e and ha e mul iple specializa ions, while
medium-sized and small ci ies sized ci ies may
ha e jus one o wo, o none (Du an on & Puga,
2000; Aud e sch, 2002; C escenzi, Rod iguez-
Pose, & S o pe , 2007; D ennan, 2002).
Tab. 4 displays 15 mos di e si i ed ci ies
and 5 leas di e si i ed ci ies. Wi hin he 10 mos
di e si i ed ci ies he e a e h ee capi al ci ies o
he la ges economies om he sample: So i a,
Beog ad and Bucha es . On he o he hand,
he capi al ci ies o Bosnia and He zego ina,
C oa ia and Slo enia a e anked in 29 h, 33 h
and 48 h place espec i ely, wha can be ela ed
o he issue o he coun y size (in e ms o
popula ion). Ac ually, he mos di e si i ed
ci ies a e no o be ound among op en mos
specialized ci ies. This is addi ionally con i med
by an indica i e nega i e ela ionship be ween
ci y specializa ion and di e si i ca ion, albei
wi h co ela ion coe i cien o -0.317. Howe e ,
di e si y and specialisa ion a e no exac
opposi es, as he e a e ci ies which a e bo h
di e si i ed and specialised.
Fig. 1: Rela i e di e si i ca ion index and ci y size in e ms o employmen in SEE
Sou ce: P epa ed by he au ho s based on Bu eau Van Dijk’s Amadeus da abase
o Cen al and Eas e n Eu ope, 2006-2013.
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19
2, XXII, 2019
Economics
is eco ded in he medium low- ech g oup.
The esul s o he k-means clus e analysis
e ealed ha among la ge ci ies, capi al ci ies
and mos o egional cen es unde lying pa e n
in specialisa ion exis s (specializa ion in high-
ech and medium high- ech indus y) and his is
also he case o smalle ci ies ha ha e simila
specializa ion pa e n in low- ech and medium-
low ech indus ies.
This esea ch was suppo ed by a g an om
he CERGE-EI Founda ion unde a p og am o
he Global De elopmen Ne wo k. All opinions
exp essed a e hose o he au ho (s) and ha e
no been endo sed by CERGE-EI o he GDN.
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I ana Rasic Baka ic, PhD
Ins i u e o Economics, Zag eb
Depa men o Regional De elopmen
C oa ia
[email p o ec ed]
Ka a ina Bacic, PhD
M eža znanja
C oa ia
[email p o ec ed]
Suncana Slijepce ic, PhD
Ins i u e o Economics, Zag eb
Depa men o Regional De elopmen
C oa ia
[email p o ec ed]
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Economics
Abs ac
CITY SPECIALISATION AND DIVERSIFICATION IN SOUTH EAST EUROPE
(SEE) COUNTRIES
I ana Rašić Baka ić, Ka a ina Bačić, Sunčana Slijepče ić
The main objec i e o he pape is o s udy he ole o localisa ion and he u banisa ion
(o di e si i ca ion) economies in u ban pos - ansi ion SEE, by cons uc ing and analysing
manu ac u ing specialisa ion and di e si i ca ion measu es o e he pe iod 2006-2013. The second
objec i e o he pape is o analyse di e ences wi hin manu ac u ing indus y ac oss ci ies in e ms
o hei echnological complexi y. Indus ies a e mapped ac oss ci ies wi h o e 50,000 popula ions
(98 ci ies in six SEE, co e ing 35.3% o he o al SEE popula ion), a popula ion h eshold ha is
in line wi h p e ious li e a u e. The da a we e ob ained om Bu eau Van Dijk’s Amadeus i m-le el
da abase con aining, mos impo an ly, balance shee da a and p o i -and-loss accoun da a o
CEE. The analysis o manu ac u ing indus y di e si i ca ion and specialisa ion in he ci ies is based
on he ela ion be ween agglome a ion economies o he Ma shall-A ow-Rome ype (economies o
loca ion o specializa ion) and he Jacobs-Po e ype (economies o u baniza ion o di e si i ca ion).
Analysis esul s e ealed ha a pa icula specialisa ion pa e n ha would poin o a homogenous
sys em o ci ies h oughou he egion could no be con i med. Ci y specialisa ion in manu ac u ing
was nega i ely co ela ed o ci y size in SEE, bu his ela ion has no shown pa icula ly s ong.
Simila ly o o he coun ies, op-specialised ci ies a e specialised in manu ac u ing closely ela ed o
na u al esou ces such as pe oleum p oduc s and obacco, poin ing o ad an ages a ising om “ i s
na u e” geog aphy. Howe e , di e si y and specialisa ion a e no exac opposi es, as he e a e ci ies
which a e bo h di e si i ed and specialised. The esul s o he second pa o he analysis show ha
medium-low echnology and low echnology g oups o indus ies in manu ac u ing p e ail in o al
u no e , wi h 36.2% and 35.0% sha e, espec i ely. Ci y specializa ion in he p e ailing echnology
g oup in SEE, in medium-low echnology, is highes in Bulga ian, Bosnian and He zego inian and
in C oa ian ci ies.
Key Wo ds: Ci y, specialisa ion, di e si i ca ion, manu ac u ing, agglome a ion economies.
JEL Classi i ca ion: R00, R12, O18.
DOI: 10.15240/ ul/001/2019-2-001
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