On the Value of Homotheticity in the Shift-Share Framework (original) (raw)
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Measuring Changes in Regional Competitiveness over Time A Shift-Share Regression Exercise
2004
Regional development in Austria has long been characterized by an east-south-west divide with eastern and southern states trailing western states in terms of value added and employment growth. In the 1990's, however, growth in value added was higher in the south and east and in terms of employment western states were outperformed by southern states. Applying an extended version of a regression shift-share approach proposed by Toulemonde (2001) these regional growth differentials are explained by decomposing annual value added and employment growth into regional, sectoral and temporal components; subsequently region-idiosyncratic and structural growth determinants can be distinguished. The results show that regional growth differences are accompanied by similar differences in the level of regional competitiveness. They also point to the fact that regions suffering from structural disadvantages often perform better than regions characterized by structural advantages which may be interpreted as a catching up process.
Shift-Share Analysis: The International Dimension
Growth and Change, 1989
This paper extends the traditional shift-share model to incorporate international effects. While some industries compete nationally for markets, other compete internationally. For industries competing nationally, regional growth derives from regional superiority relative to the national economy. For those competing internationally, regional growth is tied to regional advantages from specialization and competitive advantage relative to the international economy. Building on the Esteban - Marquillas concept of homothetic employment, the international shift-share model identifies regional growth due to regional and national competitive advantage and regional and national specialization. We demonstrate that the international model retains the property of region to region additivity.
ERSA conference …, 2005
Shift-Share analysis is a well-known methodology frequently used to obtain insights into the determinants of regional growth processes. It can address many issues, such as output growth, employment growth and productivity growth. After the initial equation proposed by Dunn , several extensions have been suggested in order to overcome some conceptual problems. One of the most important undesirable properties that have been mentioned is the so-called "non-uniqueness" of the results. That is, numerous decomposition forms are equivalent to the classical shift-share equation from a theoretical point of view, but the results often depend strongly on the choice of a specific one. In this paper, we propose a methodology based on maximum entropy econometrics to incorporate additional information to select the unique shift-share formula that fits this information best. We illustrate the method empirically by investigating the sources of change of employment growth in Spanish regions, 1986Spanish regions, -2000
The Incorporation Of Multiple Bases Into Shift-Share Analysis
Growth and Change, 1991
This paper expands the shift-sharc technique by developing a methodology for selecting and including both primary-and secondary-base economies in the shift-share model. This is useful when the shift-share technique is applied to subregional economies, whose economic growth is typically tied to the economies of both the state and the nation. The expanded methodology is illustrated with data from the Lowell, Massachusetts, Primary Metropolitan Statistical Area (PMSA). HIFT-SHARE ANALYSIS IS A popular technique for analyzing regional S employment growth. The traditional shift-share model allocates changes in regional employment among a base-economy-growth effect, an industrial-mix effect, anda residual competitive component. The intent of shift-share is to measure the residual component of economic growth not attributable to growth in the base economy or differences in industrial mix between the base economy and the region. This residual represents regional growth attributable to the dynamism or attractiveness of the region. However, the traditional shift-share analysis fails to identify the true residual component because the residual measured is not independent of the industry-mix effect. Esteban-Marquillas (1972) removed this major weakness of the traditional shift-share analysis by separating the competitive component into a genuine competitive effect and an allocation effect. Arcelus (1984) and Haynes and Machunda (1987) further expanded and enriched Esteban-Marquillas' analysis. All existing studies of shift-share analysis, however, adopt a single-base economy for both the growth and industry-mix effects. Typically, to analyze a state's economy, the nation is designated the base economy, while the state is selected as the base economy for subregions in that state'. We believe that the growth of an industry in a subregion is likely to be tied to both the state and national economies2. Specifically, the growth of a particular industry in a subregion may be related to the overall growth as well as the industry mix of both the state and the nation in which that subregion is located.
Management Dynamics in the Knowledge Economy, 2013
Economic systems are dynamic entities and the nature and consequences of the changes that occur in these systems are of considerable importance since they can affect the welfare of individuals as well as the political and social structure of their community. The objective of this works is to know what has been the behavior of the economy of the state of Tabasco from 2003 to 2013, to determine what effects the application of an economic policy has on the different production activities, as well as their impact on socioeconomic groups. The research approach is quantitative because the data collection and analysis was carried out in accordance with certain logical rules that are established through the models that analyze the behavior and composition of the regional economic structure and its impact on the development of the region and results offers a summary of the behavior of the economic activities carried out in the State of Tabasco during a given period, and starting from this historical framework it is possible to implement an analysis of the state's economic reality compared with the national one, by means of the Simple Location Coefficient and the Traditional Shift-Share Technique, used for estimating the degrees of specialization for the different sectors, showing the effects of the national growth by activity according to the state activities and the levels of efficiency in the regional structure.
Growth and Change, 2005
These notes discuss and illustrate two new extensions of shift-share analysis: the productivity and output model and the international trade model. We also review a general limitation of these and other shift-share-type models with respect to the interaction between reference area and the region. A possible solution to this limitation is presented. The new extensions provide better insights about the regional economy but that benefit occurs at a cost. The cost is careful consideration and compensation where relatively large regions or sectors are central to the shiftshare assessment. The extensions are important in addressing earlier problems with the shift-share approach. Our solution to shift-share limitation on reference area interaction is vital if the method is to be extended to these multiple environments.
East Coast Economic Region from the Perspective of Shift-Share Analysis
International Journal of Business and Society, 2011
The Malaysian government is promoting a new regional development method particularly by promoting a regional development corridor. Our paper tries to examine this new development from the perspective of regional shift-share analysis that covers the period of 2005-2007. For that purpose, we compile several data which is subdivided into three different sub-periods, aims at analysing the performance of ECER economy vis-à-vis national economy. The ECER regions GDP data are accordingly collected by its major sectors sourced from the EPU and respective state's EPU which is expressed in its real value by using the GDP deflator. The results revealed that to investors the ECER regions is unattractive locationally, and its advantage in agriculture, manufacturing, and construction sectors is improved because of structural change at the national level. As an alternative, this study offers a few policy recommendations for investment plans in promising lucrative returns to production and business sectors.
Productivity Change in Manufacturing Regions: A Multifactor/Shift-Share Approach
Growth and Change, 1997
The traditional shift-share model measures the combined effects of output growth and productivity change on employment. A region with above average employment growth either has a favorable industry mix or enjoys a competitive advantage over other regions. To separate the effects of output and productivity, the shift-share model is extended to decompose the effects of changes in output and productivity on employment. This paper modifies the Rigby-Anderson extension by separating the contribution of labor and capital to productivity growth in the analysis of regional economic performance, and investigates twenty (two-digit SIC) manufacturing sectors in twelve states (six snowbelt, six sunbelt states) to assess whether observed changes in employment were due to changes in output or to productivity.
Applied Geographic Studies, 1997
Shift-share is one of the most widely applied techniques for regional and industrial development analysis. However, the conventional shift-share model has limited analytical capacity and is frequently criticized for its structural problems and sometimescontradictory explanations. The new extension and integrated approach presented in this article enhances the analytical power of this method and introduces new scope for shift-share applications. This new extension is applied to sectoral change studies of the national capital region, including the detection of structural change, the identification of growth sectors, and growth analysis.