The Review of Economics and Statistics Vol. 87 No. 4 2005

A Divergence Statistic for Industrial Localization

Tomoya Mori^1,2; Koji Nishikimi³; Tony E. Smith^4,5

¹ Kyoto University · ² Institute of Economic Research of the Slovak Academy of Sciences · ³ Japan External Trade Organization · ⁴ California University of Pennsylvania · ⁵ University of Pennsylvania

Abstract

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.

DOI

10.1162/003465305775098170

Volume

87

Issue

4

Pages

635-651

Language

en

Sources

openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓