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Measuring Agglomeration Using the Standardized Location Quotient with a Bootstrap Method

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  • Tian, Zheng

Abstract

Abstract. The location quotient is a widely used index to measure agglomeration. However, a problem concerning the usefulness of the location quotient is how to obtain an objective cut-off value to identify the existence of agglomeration for an industry in a region. This paper ex-tends the idea of O’Donoghue and Gleave (2004) and proposes a bootstrap method to deter-mine the cut-off value based on the standardized location quotient. The advantage of our method is that the bootstrap method does not rely on any assumption regarding the statistical distribution of the location quotient, which is a major limitation of O’Donoghue and Gleave’s (2004) approach. Then we apply the method to measure agglomeration of manufacturing in-dustries at the county level in the United States.

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  • Tian, Zheng, 2013. "Measuring Agglomeration Using the Standardized Location Quotient with a Bootstrap Method," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 43(2).
    • Handle: RePEc:ags:jrapmc:243958
    DOI: 10.22004/ag.econ.243958
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    13. Andrew Crawley & Todd M. Gabe & Mariya Pominova, 2021. "The Pitfalls of Using Location Quotients to Identify Clusters and Represent Industry Specialization in Small Regions," International Finance Discussion Papers 1329, Board of Governors of the Federal Reserve System (U.S.).
    14. Reinhold Kosfeld & Timo Mitze, 2020. "The role of R&D-intensive clusters for regional competitiveness," MAGKS Papers on Economics 202001, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
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