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A Divergence Statistic for Industrial Localization

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Author Info

  • Tomoya Mori

    ()
    (Institute of Economic Research, Kyoto University)

  • Koji Nishikimi

    ()
    (Institute of Developing Economies, JETRO)

  • Tony E. Smith

    ()
    (Department of Electrical and Systems Engineering, University of Pennsylvania)

Abstract

In this paper, we propose a statistical index of industrial localization based on Kullback-Leibler divergence. This index is particularly well suited to cases where industrial data is only available at the regional level. Unlike existing regional-level indices, our index can be employed to test the significance of industrial localization relative to a hypothesized reference distribution of probable locations across regions. In addition, one can test relative degrees of localization among industries. Finally, as with all Kullback-Leibler divergence indices, our index can be decomposed into components representing localization at various levels of spatial aggregation.

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Bibliographic Info

Paper provided by Kyoto University, Institute of Economic Research in its series KIER Working Papers with number 587.

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Length: 30 pages
Date of creation: Mar 2004
Date of revision:
Handle: RePEc:kyo:wpaper:587

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