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The aggregate German economy is characterized by a secular decline of manufacturing and a rise of modern service industries. This trend of structural change is not uniform across space, however. Some regions exhibit it at an accelerated pace, while other regions reinforced their manufacturing specializations. We first categorize all German regions into one of three groups, with ‘pro-trend’, ‘anti-trend’ or ‘featureless’ growth and provide a detailed comparison of these groups. Afterwards we propose an explanation why a particular region ended up in one of those groups: We argue that the profiles of regional growth and change are systematically related to the initial sizes, and the import and export exposures of the local manufacturing sectors.

Globalization and local profiles of economic growth and industrial change