Paulo Guimarães () (University of South Carolina and CEMPRE) Octávio Figueiredo () (Universidade do Porto and CEMPRE) Douglas Woodward () (University of South Carolina)
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In this paper we reinterpret the location quotient, the commonly employed measure of regional industrial agglomeration, as an estimator derived from Ellison and Glaeser’s (1997) dartboard framework. This approach provides a theoretical foundation on which to build statistical tests for the measure. With a simple application, we show that these tests provide valuable information about the accuracy of the location quotient. The tests are relatively easy to implement using regional employment and establishment data.
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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number
273.
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