Abstract:

Looking carefully to the geographical distribution of economic activities in a country, one can notice that there is a strong tendency for sectors to cluster in specific regions in order to reap agglomeration gains. In this context, we find it essential to examine how industrial agglomerations have evolved over time and in what manner major changes have influenced agglomeration landscape in catching-up regions of central and eastern countries (CEECs) in Europe, finally our study presenting clear evidence from Romania and Hungary. In what manner has industrial agglomeration frame changed in transition economies? Has relocation of economic activities taken place? What are the main driving forces behind the development of industrial agglomerations? These are a few critical questions that we attempt to answer through the present study. Transition economies are considerably intriguing for investigation as they endured some decades long economic development period which was underlined by socialist industrialization. Hence, our analysis can be perceived as a significant addition to knowledge about agglomeration in the non-Western countries in general, and in caching-up regions in particular. Choosing to confine our attention to several individual industries in 15 regions at NUTS2 level, this paper aims to examine the transformations suffered by industrial agglomeration landscape in the last years across Romania compared with Hungary. Finally, this analysis allows us to trace the manner in which the effects of transition period affected the emergence of industrial agglomerations in these two ex-socialist neighboring countries.