Growing Alike or Growing Apart? Industrial Specialisation of EU Countries

This paper documents specialisation trends in 32 manufacturing industries across 13 European countries over the 1972-1996 period. We find that sectoral employment specialisation measured by locational Gini indices has been generally increasing, and that the dissimilarity of industrial structures among the sample countries has grown. Specialisation is most pronounced in “traditional” resource- and labour-intensive sectors, but there are signs of increasing clustering in technology-intensive industries since the mid-1980s. Specialisation of exports, whilst decreasing on average, is stronger than specialisation of employment. A continuation of the observed specialisation trend might reduce the scope for cyclical convergence of EMU countries and increase the pressure for greater market flexibility in the face of asymmetric fluctuations.