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Closing the Gap between Absolute and Relative Measures of Localization, Concentration or Specialization

  • Frank Bickenbach
  • Eckhardt Bode
  • Christiane Krieger-Boden

This paper solves one of the puzzles in the analysis of regional and industrial distributions of economic activity, the discrepancy between absolute and relative measures. It shows that the difference between an absolute and a relative Theil index of localization can be expressed in terms of absolute and relative concentration and specialization measures. This helps understand and explore why absolute and relative measures frequently evolve in opposite directions. The paper shows for the EU-15 and for UK manufacturing that this divergence originates mainly from the industrial dimension and is largely a statistical artifact inherited from the characteristics of industry classifications

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File URL: https://www.ifw-members.ifw-kiel.de/publications/closing-the-gap-between-absolute-and-relative-measures-of-localization-concentration-or-specialization/closing-the-gap-between-absolute-and-relative-measures-of-localization-concentration-or-specialization
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1660.

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Length: 13 pages
Date of creation: Nov 2010
Date of revision:
Handle: RePEc:kie:kieliw:1660
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  1. 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.
  2. Glenn Ellison & Edward L. Glaeser & William R. Kerr, 2010. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," American Economic Review, American Economic Association, vol. 100(3), pages 1195-1213, June.
  3. Gilles Duranton & Henry Overman, 2002. "Testing for Localisation Using Micro-Geographic Data," CEP Discussion Papers dp0540, Centre for Economic Performance, LSE.
  4. Frank Bickenbach & Eckhardt Bode & Christiane Krieger-Boden, 2010. "Structural Cohesion in Europe: Stylized Facts," Kiel Working Papers 1669, Kiel Institute for the World Economy.
  5. Frank Bickenbach & Eckhardt Bode, 2008. "Disproportionality Measures of Concentration, Specialization, and Localization," International Regional Science Review, SAGE Publishing, vol. 31(4), pages 359-388, October.
  6. Glenn Ellison & Edward L. Glaeser, 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," NBER Working Papers 4840, National Bureau of Economic Research, Inc.
  7. Joeri Gorter & Albert van der Horst & S. Brakman & H.F.L. Garretsen & M. Schram, 2005. "New economic geography, empirics, and regional policy," CPB Special Publication 56, CPB Netherlands Bureau for Economic Policy Analysis.
  8. Eric Marcon & Florence Puech, 2010. "Measures of the geographic concentration of industries: improving distance-based methods," Journal of Economic Geography, Oxford University Press, vol. 10(5), pages 745-762, September.
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