ASSESSING PROSPECTS FOR INDUSTRIAL AGGLOMERATION DEVELOPMENT: CASE OF CENTRAL & EAST EUROPE COUNTRIES

Abstract: The paper systemizes existing studies devoted to agglomeration formation and functioning and exploring the peculiarities of agglomerations' development in CEE countries. The research is based on a comparison of indicators for industrial agglomeration development in 51 region of CEE countries. The assessing prospects for industrial agglomeration development were conducted using the following groups of indicators: localization level, availability of resources, the demand for the products of the agglomeration area. The study used methods of analysis and synthesis of scientific generalization, comparison, induction and deduction. Results of the research shows that an important feature for agglomeration development in Central and Eastern Europe were foreign investment resources in the region, which is associated with the emergence of clusters in these regions, although this investment was not the only determinant of success. The success of agglomeration origination with foreign investment was driven by the presence of industrial agglomerations in key areas and related supporting industries. It builds up a competitive advantage in the region and specialization in international supply chains, supply of resources (labor, production, logistical), unmet demand in the domestic markets of these countries. As the prerequisite of agglomeration development was availability of resources (natural; capital; technological). Primary lack of capital; technological resources was compensated because of the transfer of activities from abroad due to other competitive advantages of the regions. Availability of market opportunities and demand for agglomerations' products was an important aspect of determining the potential due to unsatisfied demand in national markets of the countries and proximity to customers in West European markets