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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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File URL: https://www.ifw-members.ifw-kiel.de/publications/closing-the-gap-between-absolute-and-relative-measures-of-localization-concentration-or-specialization/closing-the-gap-between-absolute-and-relative-measures-of-localization-concentration-or-specialization
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1660.

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Length: 13 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:kie:kieliw:1660

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Keywords: Localization; Concentration; Specialization; Theil index;

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Cited by:
  1. Aleksandra Parteka & Massimo Tamberi, 2013. "Product Diversification, Relative Specialisation And Economic Development: Import-Export Analysis," GUT FME Working Paper Series A, Faculty of Management and Economics, Gdansk University of Technology 15, Faculty of Management and Economics, Gdansk University of Technology.
  2. Aleksandra Parteka, 2013. "Trade Diversity and Stages of Development–Evidence on EU Countries," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, Faculty of Economic Sciences, University of Warsaw, vol. 30.
  3. HAEDO, Christian & MOUCHART, Michel, 2012. "A stochastic independence approach for different measures of concentration and specialization," CORE Discussion Papers, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2012025, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).

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