Specialisation patterns in Europe

The purpose of this paper is to analyse whether specialisation has increased in European Union countries, and to determine whether specialisation patterns are consistent with trade theories. I present evidence of increasing specialisation in European Union countries between 1968 and 1990. I identify which industries have increased in geographical concentration and show that the characteristics of these industries are consistent with what is predicted by trade theories. The industries with increasing geographical concentration are characterised by high scale economies and high proportions of intermediate goods in production, providing support for the new trade theories and the economic geography theories.