Economic growth of agglomerations and geographic concentration of industries - evidence for West Germany

Abstract

During the two decades from 1980 to 2000 there has been no clear overall trend of economic convergence or divergence among West German regions. But a number of already rich regions - generally large agglomerations - have succeeded in further distancing themselves from the rest. At the same time, we identify knowledge-intensive services as industries whose geographical concentration was initially high and continued to increase. Logistic and nonparametric regression estimates show that the higher a region’s share of employment in these service sectors the greater the probability that a region is classified as being rich and getting even richer.