Essays on industrial and services sectors' agglomeration in the European Union : an empirical and theoretical assessment of the new economic geography with a special focus on non-stationarity Issues

Throughout this dissertation agglomeration and specialization tendencies of both industrial and services sectors in the European Union, the driving forces behind and dynamic developments are investigated. Whereas industrial agglomeration increased by about 25 percent from 1970 to 2005, services’ agglomeration decreased continuously over time. It can be shown that agglomeration is a dynamic process which can be understood by different trade theories' explanations. In fact, New Economic Geography's arguments are important in explaining industrial agglomeration and countries' specialization in industries in the European Union, whereas for services their explanatory power appears to be weaker. Instead, Traditional Trade Theory's arguments, i.e. consideration of factor availability, tend to play a role in explaining services' agglomeration. It is important to consider statistical properties of regression variables ...