Steiner, Michael --- "Restructuring industrial areas: lessons in support of regional convergence in an enlarging Europe" [2003] ELECD 11; in Tumpel-Gugerell, Gertrude; Mooslechner, Peter (eds), "Economic Convergence and Divergence in Europe" (Edward Elgar Publishing, 2003)

Book Title: Economic Convergence and Divergence in Europe

Editor(s): Tumpel-Gugerell, Gertrude; Mooslechner, Peter

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843762416

Section: Chapter 5

Section Title: Restructuring industrial areas: lessons in support of regional convergence in an enlarging Europe

Author(s): Steiner, Michael

Number of pages: 22

Extract:

5. Restructuring industrial areas:
lessons in support of regional
convergence in an enlarging Europe
Michael Steiner

5.1. INTRODUCTION1

Problems of structural-industrial adaptation are a common feature of
changing economies (an expression which comes close to a pleonasm).
They are nowadays a dominating problem in countries in transition in
Eastern Europe, they are a pertinent problem in specific regions of the so-
called Western world. Old industrial areas (OIAs) ­ in the context of the
United States also called `rust-belt' areas ­ as a typical form of a combina-
tion of regional and sectoral decline in these post-industrial economies
have been treated extensively in the literature of industrial organization,
regional economics and technological and social change (see for example
Norton and Rees 1979; Tichy 1981, 1986; Steiner 1985, 1990b; Prisching
1985; Markusen 1985; Geldner 1989). They are typically characterized by
a large industrial base going back to the last century (or longer), an over-
representation of a few sectors leading to a monostructure, a domination
of large, often nationalized firms with a limited range of products, low
mobility (both of firms and workers), above average wage levels, a well-
organized labour force, and strong hierarchical organizations within the
firms.
In Eastern Europe the starting point of transformation was an overdi-
mensioned industry, characterized by nationalized big firms with soft
budget constraints based on generous credits of nationalized banks, a
restricted market orientation and a limited degree of competition from the
world market (see for example Döhrn and Heilemann ...