Regional analysis of East Germany: A comparison of the economic situation of states, districts, and municipalities

A decade after the German unification we look at the extent of economic differentiation within East Germany. This is achieved by help of a set of selected statistical indicators for the years 1991 to 1998. Comparisons are drawn a) between the East German jurisdictions and b) between West and East German jurisdictions. On the federal state (Laender) level it can be shown that each state has developped its own specific economic profile. Brandenburg is characterized by a positive net migration (suburban function for Berlin), relatively low unemployment and high GDP values, but relatively low entrepreneurial activities. Saxony has achieved the lowest unemployment, a good endowment with human capital, modern industrial technology, infrastructure, and entrepreneurial activities. Special features of Thuringia consist of a relatively large number of patent applications and a stable industrial base. The economic state of Mecklenburg-Vorpommern is characterized by low industrial investment, negative net migration, and high unemployment. A special feature of this federal state is the intense investmenr in tourist services. Saxony-Anhalt registers the highest decrease in the numbers of industrial workers between 1991 and 1998 and the highest unemployment. On the other side it shows the highest amount of investment, especially in chemical industry and in mineral oil processing. On the county level four clusters can be identified by means of a cluster analysis: A “cluster of counties with severe economic weaknesses” with a bias in the regions indutrialized in an early stage, a “cluster with a high human capital potential and suburbanization loss” consisting of 21 cities, a “cluster of counties with good economic results” predominantly surrounding the larger cities, and a “cluster of counties with SME growth potential” concentrating in Thuringia and Saxony. The results at the city level show that the larger cities above 100.000 inhabitants, especially Dresden and Leipzig, do better than the smaller cities. Jena in Thuringia has specialized as a location for R&D, Zwickau in Saxony as a location for the automobile industry. Altogether the economic differences between the East German federal states, counties, and cities still are less pronounced than the degree of differentiation of their West German counterparts.

09. February 2000

Authors Franz Barjak Peter Franz Gerhard Heimpold Martin T. W. Rosenfeld

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