The Annals of Regional Science

, Volume 54, Issue 1, pp 215–250 | Cite as

Spatial fragmentation of industries by functions

  • Franz-Josef Bade
  • Eckhardt BodeEmail author
  • Eleonora Cutrini
Original Paper


We show that key functions are spatially clustered with, or dispersed from, each other even within manufacturing industries in West Germany, and that these clustering or dispersion patterns have changed significantly during recent decades. Estimating levels and changes (1992–2007) of localizations and colocalizations of selected functions (production, headquarter services, R&D) within 27 West German industries by means of \(K\) densities, we identify two broad groups of industries. In “fragmenting” industries, which account for half of manufacturing employment, functions were more clustered with each other than the industry as a whole after the fall of the Iron Curtain but have, in accordance with regional theories of spatial fragmentation, been unbundled spatially from each other subsequently. In “integrating” industries, by contrast, which account for one-third of manufacturing employment, functions were initially dispersed from each other but have subsequently been rebundled spatially with each other. This spatial rebundling may be a consequence of offshoring, i.e., international fragmentation.

JEL Classification

C19 L60 F23 R12 



The authors thank Frank Bickenbach, Sebastian Braun, Dirk Dohse, Ursula Fritsch, Holger Görg, Tillmann Schwörer, an anonymous referee and Janet Kohlhase for helpful comments, discussions and suggestions, and Michaela Rank for valuably research assistance. Older versions of this paper circulated as “Does Domestic Offshoring Precede International Offshoring?” or “The Spatial Fragmentation of Production Activities: Patterns of Industrial and Functional Localization”.


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Copyright information

© Springer-Verlag Berlin Heidelberg 2014

Authors and Affiliations

  • Franz-Josef Bade
    • 1
  • Eckhardt Bode
    • 2
    Email author
  • Eleonora Cutrini
    • 3
  1. 1.Department of Economics, Faculty of Spatial PlanningUniversity of DortmundDortmundGermany
  2. 2.Kiel Institute for the World EconomyKielGermany
  3. 3.Department of LawUniversity of MacerataMacerataItaly

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