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Spatial centrality: an approach with sectoral linkages

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  • Nuno Crespo
  • M. Paula Fontoura
  • Nádia Simões

Abstract

This paper proposes a measure with six components to evaluate the degree of centrality (advantage) of a sector located in a region considering internal and external components and economic and geographical aspects. The main novelty of this indicator is that the definition of “mass” takes into consideration intra and inter-sectoral effects. In fact, the new economic geography has shown that a sector takes advantage of being in a particular location through two main channels: the proximity to other firms in the sector (intrasectoral effects) and spillover effects arising from the proximity to upstream and downstream sectors (inter-sectoral effects). The two effects will be considered in both the region of location of the sector under analysis and in the other regions related to it. The hypothesis is that the spatial centrality of a sector varies positively with geographic proximity to firms in the same economic sector and in other sectors connected by vertical linkages and negatively with inter-regional distance. The index allows a double reading: it is possible to identify the sectors in which the region has a higher degree of centrality and the regions with a greater degree of centrality in this sector. To illustrate the method, we include an example for the Portuguese economy at the county level (275 regional units).

Suggested Citation

  • Nuno Crespo & M. Paula Fontoura & Nádia Simões, 2014. "Spatial centrality: an approach with sectoral linkages," Working Papers Department of Economics 2014/14, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
  • Handle: RePEc:ise:isegwp:wp142014
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    1. CRESPO, Nuno & FONTOURA, M. Paula & SIMOES, Nadia, 2015. "Spatial Centrality: An Approach With Sectoral Linkages," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(1), pages 45-56.
    2. Astrid KRENZ, 2013. "Services Sectors’ Concentration: the European Union and the New Economic Geography," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 13(2), pages 29-44.
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    5. CRESPO, Nuno & FONTOURA, María Paula, 2010. "Determinant Factors Of Structural Similarity At The Regional Level: Evidence From Portugal," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 10(1).
    6. Thierry Mayer & Keith Head, 2002. "Illusory Border Effects: Distance Mismeasurement Inflates Estimates of Home Bias in Trade," Working Papers 2002-01, CEPII research center.
    7. I.P. Ottaviano, Gianmarco, 2008. "Infrastructure and economic geography: An overview of theory and evidence," EIB Papers 6/2008, European Investment Bank, Economics Department.
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    9. Maurel, Francoise & Sedillot, Beatrice, 1999. "A measure of the geographic concentration in french manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 29(5), pages 575-604, September.
    10. Nuno Crespo & Maria Paula Fontoura, 2006. "Economic centrality, per capita income and human capital – some results at regional level," Working Papers Department of Economics 2006/28, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    11. Marius Brülhart, 2001. "Evolving geographical concentration of European manufacturing industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(2), pages 215-243, June.
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    1. CRESPO, Nuno & FONTOURA, M. Paula & SIMOES, Nadia, 2015. "Spatial Centrality: An Approach With Sectoral Linkages," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(1), pages 45-56.

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