Location Modelling and the Localization of Portuguese Manufacturing Industries
AbstractThe recent index proposed in Ellison & Glaeser (1997) is now well established as the preferred method for measuring localization of economic activity. We critically review this index and build on the McFadden’s Random Utility (Profit) Maximization framework to develop an alternative measure that is more consistent with the theoretical construct underlying the original work of Ellison and Glaeser. Given that our method is regression based it goes beyond the descriptive nature of the EG index and allows us to evaluate how the localization measure behaves with changes in the systematic forces that drive firms’ location decisions. JEL classification: C25, R12, R39
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Date of creation: Aug 2004
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Find related papers by JEL classification:
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-11-09 (All new papers)
- NEP-GEO-2005-11-09 (Economic Geography)
- NEP-URE-2005-11-09 (Urban & Real Estate Economics)
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