Empirical analysis reports a transformation in East Germany after privatization, indicating regional strategies are crucial for development.
This article theoretically explores the structural drivers of regional development traps by integrating core–periphery theories with industrial geography. It highlights how distinct industrial ecosystems form productive hierarchies. This is empirically illustrated through East Germany’s transformation after reunification. The destruction of anchor firms during privatization turned East German regions into Satellite Platform districts, reliant on externally headquartered firms for technology and investment and subject to Myrdalian backwash effects. Nonetheless, research-intensive manufacturing hotspots, like those in Jena, emerged through industrial policy supporting anchor firm functions. These findings underscore the importance of regional development strategies that cultivate regional anchor firms as key agglomerating forces.
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Christina Wolf (2025) studied this question.
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