Dynamic externalities and regional manufacturing development in Poland

Abstract

The impact of localization and urbanization economies on regional manufacturing development in Poland 1976-96 is assessed in terms of employment and the regional convergence or divergence of the economy. Current research on the role of dynamic production externalities in regional manufacturing development is examined, starting with a review of recent literature on the nature of such externalities in manufacturing location, and how positive externalities may influence the spatial clustering of manufacturing industries. The paper shows that radical changes have occurred in patterns of Polish regional manufacturing employment, both with regard to sectors and regions. Transition is refocussing the regional economy on strong regional centres, and on sectors regarded with little favour in the planned economy.