Determinants of deindustrialisation in developed european and post-communist countries

Abstract

The main goal of this paper is to shed some light on the pro-cess of deindustrialisation defined as falling share of industry employment in total employment. Estimating the dynamic panel data models, the paper investigates differences in changes in the structure of the economy during the process of deindustrialisation in 26 European Union member states (15 developed and 10 post-communist econ-omies) during the period between 1995 and 2012. The paper highlights the standard or “natural” and transition forms of deindustrialisation. In our analysis, we use a one-step system generalized method of moments estimator with robust standard errors, and in contrast to our expectations, the obtained result did not support the initial hypothesis that deindustrialisation in post-communist economies is characterized by factors crucially different from those in developed European countries.