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Closing the gap between absolute and relative measures of localization, concentration or specialization

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  • Frank Bickenbach
  • Eckhardt Bode
  • Christiane Krieger-Boden

Abstract

This paper solves one of the puzzles in the analysis of regional and industrial distributions of economic activity, the discrepancy between absolute and relative measures. It shows that the difference between an absolute and a relative Theil index of localization can be expressed in terms of absolute and relative concentration and specialization measures. This helps understand and explore why absolute and relative measures frequently evolve in opposite directions. The paper shows for the EU-15 and for UK manufacturing that this divergence originates mainly from the industrial dimension and is largely a statistical artifact inherited from the characteristics of industry classifications.
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  • Frank Bickenbach & Eckhardt Bode & Christiane Krieger-Boden, 2013. "Closing the gap between absolute and relative measures of localization, concentration or specialization," Papers in Regional Science, Wiley Blackwell, vol. 92(3), pages 465-479, August.
    • Handle: RePEc:bla:presci:v:92:y:2013:i:3:p:465-479
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    File URL: http://hdl.handle.net/10.1111/j.1435-5957.2012.00460.x
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    1. Martin Hallet, 2000. "Regional specialisation and concentration in the EU," European Economy - Economic Papers 2008 - 2015 141, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Combes, Pierre-Philippe & Overman, Henry G., 2004. "The spatial distribution of economic activities in the European Union," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 64, pages 2845-2909, Elsevier.
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    7. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
    8. Karl Aiginger & Esteban Rossi-Hansberg, 2006. "Specialization and concentration: a note on theory and evidence," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 33(4), pages 255-266, September.
    9. Bickenbach, Frank & Bode, Eckhardt & Krieger-Boden, Christiane, 2010. "Structural cohesion in Europe: Stylized facts," Kiel Working Papers 1669, Kiel Institute for the World Economy (IfW Kiel).
    10. Joeri Gorter & Albert Van der Horst, 2005. "New Economic Geography, Empirics, and Regional Policy," ERSA conference papers ersa05p236, European Regional Science Association.
    11. Frank Bickenbach & Eckhardt Bode, 2008. "Disproportionality Measures of Concentration, Specialization, and Localization," International Regional Science Review, , vol. 31(4), pages 359-388, October.
    12. Eleonora Cutrini, 2010. "Specialization and Concentration from a Twofold Geographical Perspective: Evidence from Europe," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 315-336.
    13. Eric Marcon & Florence Puech, 2010. "Measures of the geographic concentration of industries: improving distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 10(5), pages 745-762, September.
    14. Traistaru, Iulia & Iara, Anna & Pauna, Carmen, 2002. "Regional structural change and growth in Romania," ERSA conference papers ersa02p330, European Regional Science Association.
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    Cited by:

    1. Haedo, Christian & Mouchart, Michel, 2016. "Automatic biclustering of regions and sectors," LIDAM Discussion Papers ISBA 2016042, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    2. Bickenbach, Frank & Bode, Eckhardt & Krieger-Boden, Christiane, 2010. "Structural cohesion in Europe: Stylized facts," Kiel Working Papers 1669, Kiel Institute for the World Economy (IfW Kiel).
    3. Haedo, Christian & Mouchart, Michel, 2018. "Automatic biclustering of regions and sectors," LIDAM Discussion Papers ISBA 2018026, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    4. HAEDO , Christian & Mouchart, Michel, 2011. "A Stochastic Independence Approach for different Measures of Global Specialization," LIDAM Discussion Papers ISBA 2011006, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    5. Federico Pablo-Martí & Josep-Maria Arauzo-Carod, 2020. "Spatial distribution of economic activities: a network approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(2), pages 441-470, April.
    6. HAEDO, Christian & MOUCHART, Michel, 2012. "A stochastic independence approach for different measures of concentration and specialization," LIDAM Discussion Papers CORE 2012025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. repec:gdk:wpaper:15 is not listed on IDEAS
    8. Chris van Egeraat & Edgar Morgenroth & Rutger Kroes & Declan Curran & Justin Gleeson, 2018. "A measure for identifying substantial geographic concentrations," Papers in Regional Science, Wiley Blackwell, vol. 97(2), pages 281-300, June.
    9. repec:gdk:wpaper:8 is not listed on IDEAS
    10. Parteka, Aleksandra & Tamberi, Massimo, 2013. "Product diversification, relative specialisation and economic development: Import–export analysis," Journal of Macroeconomics, Elsevier, vol. 38(PA), pages 121-135.
    11. Elena Lasarte & Miguel Angel Marquez Paniagua, 2014. "Decomposition of Regional Income Inequality and Neighborhood Component: A Spatial Theil Index," Working Papers. Serie EC 2014-03, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    12. Christian Haedo & Michel Mouchart, 2022. "Two-mode clustering through profiles of regions and sectors," Empirical Economics, Springer, vol. 63(4), pages 1971-1996, October.
    13. Viviana Fernandez, 2021. "Cross-country concentration and specialization of mining inventions," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(8), pages 6715-6759, August.
    14. Haedo, Christian & Mouchart, Michel, 2019. "Two-mode clustering through profiles of regions and sectors," LIDAM Discussion Papers ISBA 2019014, Université catholique de Louvain, Institute of Statistics, Biostatistics and Actuarial Sciences (ISBA).
    15. Aleksandra Parteka, 2012. "Trade Diversity and Stages of Development–Evidence on EU Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 30.
    16. Lengyel, Imre & Lengyel, Balázs & Vas, Zsófia & Szakálné Kanó, Izabella, 2016. "Az újraiparosodás térbeli kérdőjelei Magyarországon [Territorial questions of reindustrialization in Hungary]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 615-646.
    17. Nicole Palan, 2015. "Konzentrations- und Ungleichheitsindizes – ein Überblick am Beispiel der Textilindustrie," Working Paper Series, Social and Economic Sciences 2015-02, Faculty of Social and Economic Sciences, Karl-Franzens-University Graz.

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    More about this item

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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