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The Balassa Index Meets the Dissimilarity Theil Index: a Decomposition Methodology for Location Studies

Author

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  • Eleonora CUTRINI

    (Universit… Politecnica delle Marche, Dipartimento di Economia)

Abstract

It is well known that the broad concept of localisation has two connotations, namely, regional specialisation and industrial concentration. The main purpose of this paper is to introduce an entropy index of overall localisation suitable to conceptualise specialisation and concentration as the two sides of the same medal in a nested geographical perspective. The system of dissimilarity entropy measures is potentially applicable to the assessment of the spatial distribution of several economic phenomena when a twofold geographical level of analysis is considered. In the specific case, the decomposition provides an accurate method to quantify the cross-country divergence in localisation from the agglomeration within countries.

Suggested Citation

  • Eleonora CUTRINI, 2006. "The Balassa Index Meets the Dissimilarity Theil Index: a Decomposition Methodology for Location Studies," Working Papers 274, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  • Handle: RePEc:anc:wpaper:274
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    File URL: http://docs.dises.univpm.it/web/quaderni/pdf/274.pdf
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    References listed on IDEAS

    as
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    7. Gordon F. Mulligan & Charles Schmidt, 2005. "A Note on Localization and Specialization," Growth and Change, Wiley Blackwell, vol. 36(4), pages 565-576.
    8. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
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    10. Xavier Sala-i-Martin, 2001. "The disturbing 'rise' of global income inequality," Economics Working Papers 616, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2002.
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    12. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 2008 - 2015 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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    Cited by:

    1. Ugo FRATESI, 2010. "The National and International Effects;of Regional Policy Choices: Agglomeration Economies, Peripherality and Territorial Characteristics," Working Papers 344, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    2. Luca RICCETTI, 2010. "Minimum Tracking Error Volatility," Working Papers 340, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    3. Gianluca Cafiso, 2011. "Sectoral border effects and the geographic concentration of production," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 147(3), pages 543-566, September.
    4. Farhauer, Oliver & Kröll, Alexandra, 2009. "Verfahren zur Messung räumlicher Konzentration und regionaler Spezialisierung in der Regionalökonomik," Passauer Diskussionspapiere, Volkswirtschaftliche Reihe V-58-09, University of Passau, Faculty of Business and Economics.
    5. Maria Florencia Granato, 2011. "REGIONAL NEW ECONOMIC GEOGRAPHY (refereed paper)," ERSA conference papers ersa10p747, European Regional Science Association.
    6. Eleonora Cutrini, 2010. "Specialization and Concentration from a Twofold Geographical Perspective: Evidence from Europe," Regional Studies, Taylor & Francis Journals, vol. 44(3), pages 315-336.
    7. Trejo Nieto , Alejandra Berenice, 2010. "The geographic concentration in Mexican manufacturing industries, an account of patterns, dynamics and explanations: 1988-2003," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 18, pages 37-60.
    8. Fabio FIORILLO & Agnese SACCHI, 2010. "I Want to Free-ride. An Opportunistic View on Decentralization Versus Centralization Problem," Working Papers 346, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

    More about this item

    Keywords

    concentration; dissimilarity entropy index; localisation; specialisation; within-between country decomposition;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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