Measuring industry co-location across county borders

Zheng Tian, Paul D. Gottlieb, Stephan J. Goetz

Research output: Contribution to journalArticlepeer-review

2 Scopus citations

Abstract

The location quotient (LQ) measures regional industry concentration with the advantages of easy calculation and interpretation. However, it is a weak method for identifying industry clusters that consist of related industries geographically concentrated in contiguous counties. This paper proposes a new spatial input–output location quotient (SI-LQ) accounting for both the co-location of related industries and the spatial spillover of concentration into neighbouring counties. A bootstrap method is used to determine the cut-off values of the new measure. The practical advantages of the SI-LQ over the traditional LQ include attenuation of the extreme values of the LQ in less populous and remote counties and the identification of large substantive clusters. The SI-LQ outperforms the LQ in a regression analysis of the effect of industry concentration on total employment growth.

Original languageEnglish (US)
Pages (from-to)92-113
Number of pages22
JournalSpatial Economic Analysis
Volume15
Issue number1
DOIs
StatePublished - Jan 2 2020

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Economics, Econometrics and Finance(all)
  • Statistics, Probability and Uncertainty
  • Earth and Planetary Sciences (miscellaneous)

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