The Modified Diagonalization Method for Analysing Clusters within Economies
AbstractIn this paper a modification of the diagonalization method, originally put forward by Hoen (2002), is suggested which is aimed at uncovering clusters of sectors within an input-output framework. Our interest in this subject was largely motivated by the fact that the preceding method appears to be incapable of providing us with an accurate representation of the real cluster structure that exists in an economy, as a consequence of missing the position at which a given inter-sectoral flow stands in the hierarchy of the purchasing industry and the supplying industry. By making a distinction between an internal and external relationship, when it comes up at the moment of deciding whether each pair of industries is categorized as belonging to the same or different clusters, the proposed alternative, which will be referred to as the modified diagonalization method, seems to be superior to its predecessor. Such a conclusion is supported by the results of comparison of the relative performance of the rival methods (i.e. the original and modified diagonalization method) which show, among other things, that the average value of flows between industries grouped into clusters is higher in the case of the proposed method.
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Bibliographic InfoArticle provided by University of Primorska, Faculty of Management Koper in its journal Managing Global Transitions.
Volume (Year): 6 (2008)
Issue (Month): 1 ()
Find related papers by JEL classification:
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
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- Alex Hoen, 2002. "Identifying Linkages with a Cluster-based Methodology," Economic Systems Research, Taylor & Francis Journals, vol. 14(2), pages 131-146.
- Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536, October.
- Ron Martin & Peter Sunley, 2003.
"Deconstructing clusters: chaotic concept or policy panacea?,"
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Oxford University Press, vol. 3(1), pages 5-35, January.
- Ron Martin & Peter Sunley, 2002. "Deconstructing Clusters: Chaotic Concept or Policy Panacea," ESRC Centre for Business Research - Working Papers wp244, ESRC Centre for Business Research.
- Henryk Gurgul & Pawel Majdosz, 2005. "Key Sector Analysis: A Case of the Transited Polish Economy," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 3(1), pages 95-111.
- Johan Hauknes, . "Norwegian Input-Output Clusters and Innovation Patterns," STEP Report series 199815, The STEP Group, Studies in technology, innovation and economic policy.
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