A Divergence Statistic for Industrial Localization
We propose a statistical index of industrial localization based on the Kullback-Leibler divergence. This index is particularly well suited to cases where industrial data are available only 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. © 2005 President and Fellows of Harvard College and the Massachusetts Institute of Technology.
Volume (Year): 87 (2005)
Issue (Month): 4 (November)
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