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Endogenous Development: The New Challenge for Central European Industry
This paper examines the applicability of the concept of endogenous regional development to Central European post-socialist countries. Endogenous development emerged in response to the pressures of the global economy in Western Europe, and focuses on exploiting locally rooted competitive advantages that can counteract the cost advantages of less developed economies, providing a “high road” of socio-economic development. In Central Europe, industrial restructuring has mainly followed a development path based on Foreign Direct Investment, which has reinvigorated competitiveness, but now faces the need to go beyond low costs, and counteract the unfavourable effects of external capital dependency. The paper identifies two different paths to encourage endogenous development, drawing attention to their institutional background and the expected consequences on territorial development
Keywords: endogenous development industry reindustrialisation Foreign Direct Investment regional policy regional policy
Restructuring of the East German Industry
The article deals with the institutional and real-economic restructuring of industry in the former GDR based on the transformation of society. It shows how the country overcame the difficulties, what were the effects of a transformational crisis and consequences for the property relations. We also discuss the arranged measures aimed at reviving economic growth and the restructuring of industrial production related with the reindustrialization. To analyze the relationship between the institutional restructuring and its impact on the real economy, we use economic statistical methods. The restructuring of institutions has defined the vector of development for the East German industry, which is stipulated by its integration into the all-German economic system but has a very limited potential for growth and catching-up development. The region is currently much less behind West Germany but still not at the same level. The performance of the East German manufacturing industry accounts for about 63% of the West German one, and its increase has slowed down.
Ludwig U. udo.ludwig@iwh-halle
Keywords: East Germany industry transformation privatization institutional change reindustrialisation restructuring middle class
