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The Balassa Index Meets the Dissimilarity Theil Index: a Decomposition Methodology for Location Studies

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  • Eleonora CUTRINI

    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Abstract

It is well known that the broad concept of localisation has two connotations, namely, regional specialisation and industrial concentration. The main purpose of this paper is to introduce an entropy index of overall localisation suitable to conceptualise specialisation and concentration as the two sides of the same medal in a nested geographical perspective. The system of dissimilarity entropy measures is potentially applicable to the assessment of the spatial distribution of several economic phenomena when a twofold geographical level of analysis is considered. In the specific case, the decomposition provides an accurate method to quantify the cross-country divergence in localisation from the agglomeration within countries.

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File URL: http://docs.dises.univpm.it/web/quaderni/pdf/274.pdf
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Bibliographic Info

Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 274.

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Length: 23
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:anc:wpaper:274

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Keywords: concentration; dissimilarity entropy index; localisation; specialisation; within-between country decomposition;

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References

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  1. Gordon F. Mulligan & Charles Schmidt, 2005. "A Note on Localization and Specialization," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 36(4), pages 565-576.
  2. Karl Aiginger & Stephen W. Davies, 2004. "Industrial specialisation and geographic concentration: Two sides of the same coin? Not for the European Union," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 231-248, November.
  3. Tomoya Mori & Koji Nishikimi & Tony E. Smith, 2004. "A Divergence Statistic for Industrial Localization," KIER Working Papers 587, Kyoto University, Institute of Economic Research.
  4. Xavier Sala-i-Martin, 2002. "The disturbing "rise" of global income inequality," Discussion Papers 0102-44, Columbia University, Department of Economics.
  5. Eric Marcon & Florence Puech, 2003. "Evaluating the geographic concentration of industries using distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 3(4), pages 409-428, October.
  6. Luca De Benedictis & Massimo Tamberi, 2004. "Overall Specialization Empirics: Techniques and Applications," Open Economies Review, Springer, vol. 15(4), pages 323-346, October.
  7. Marius BRÜLHART & Rolf TRAEGER, 2003. "An Account of Geographic Concentration Patterns in Europe," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 03.06, Université de Lausanne, Faculté des HEC, DEEP.
  8. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
  9. Marius Brülhart, 1998. "Trading Places: Industrial Specialization in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 36(3), pages 319-346, 09.
  10. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 142, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  11. Karl Aiginger & Michael Pfaffermayr, 2004. "The Single Market and Geographic Concentration in Europe," Review of International Economics, Wiley Blackwell, vol. 12(1), pages 1-11, 02.
  12. Frank Bickenbach & Eckhardt Bode, 2006. "Disproportionality Measures of Concentration, Specialization, and Polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy.
  13. Mary Amiti, 1997. "Specialisation Patterns in Europe," CEP Discussion Papers dp0363, Centre for Economic Performance, LSE.
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Citations

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Cited by:
  1. Luca RICCETTI, 2010. "Minimum Tracking Error Volatility," Working Papers 340, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  3. Trejo Nieto , Alejandra Berenice, 2010. "The geographic concentration in Mexican manufacturing industries, an account of patterns, dynamics and explanations: 1988-2003," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 18, pages 37-60.
  4. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
  5. Ugo FRATESI, 2010. "The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics," Working Papers 344, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Gianluca Cafiso, 2011. "Sectoral border effects and the geographic concentration of production," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 147(3), pages 543-566, September.
  7. Farhauer, Oliver & Kröll, Alexandra, 2009. "Verfahren zur Messung räumlicher Konzentration und regionaler Spezialisierung in der Regionalökonomik," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-58-09, University of Passau, Faculty of Business and Economics.

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