Service industries and regional development: An analysis for eastern Germany

Uwe Blien () and Anette Haas

The Service Industries Journal, 2005, vol. 25, issue 8, 979-997

Abstract: By using a shift-share regression approach the contribution of services to the development of employment in eastern Germany is analysed. The results obtained with highly differentiated data from the employment statistics show that services contributed more to a favourable path of development than other industries. This is due in part to general world-wide processes of structural change and the special situation in eastern Germany. Many subsidies were transferred to the East, which stabilises the special segment of the economy related to local demand. This segment is made up mostly of services in eastern Germany. Processes of industrial change can be explained using structural change approaches. It is shown that processes of de-concentration play a role in explaining regional disparities, since inverse localisation and positive urbanisation effects are visible. For the empirical analyses an augmented approach is applied which uses a generalisation of an econometric analogue from the common shift-share method. It combines the strengths of the traditional approach with all the advantages of theory-oriented modelling and regression analysis.

Date: 2005
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DOI: 10.1080/02642060500236918

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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