Shift-Share Analysis: The International Dimension

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.     

The Impact of Output and Productivity Changes on Manufacturing Employment

Traditional univariate shift-share studies of employment provide an unreliable indicator of the relative performance of a region or an industry for they fail to separate the effects of output and productivity change on the demand for labor. An extended shift-share model is proposed that overcomes this weakness and permits identification of different processes of regional development. This model is used to investigate annual employment change in twenty (two-digit SIC) manufacturing industries in nine census regions of the U.S. between 1950 and 1986. The timing and depth of the exodus of manufacturing jobs from the snowbelt to the sunbelt is illustrated along with the business cycle performance of industries and regions. Productivity growth in the sunbelt is positively associated with rapid output expansion, whereas in the snowbelt it is associated with the loss of market share and economic rationalization.     

Shift-Share Analysis and the Potential for Predicting Regional Growth Patterns: Some Evidence for the Region of Quebec,Canada

The purpose of this paper is to explain changes in regional attractiveness as measured by the competitive component of the shift-share model. This is done by applying the shift-share model to the manufacturing sector in the province of Quebec and using time series data for twenty two-digit industries as the basis of analysis. The study concludes that shift-share is useful for analyzing historical employment patterns and identifying their causes through regression analysis. However, the inherent structural instability limits the predictive potential of the model.     

Dynamic Shift-Share Analysis

Most applications of shift-share analysis to regional employment change have used a study period of several years and have examined conditions only at the beginning and end years. This comparative static approach does not take into account the continuous changes in both industrial mix and size of total employment of the region over the study period. Calculating the national growth effect, the industrial mix effect, and the competitive effect on an annual basis and then summing the results over the study period provides a more accurate allocation of job changes among the three shift-share effects. This approach, which we term dynamic shift-share analysis, also allows unusual years and years of economic transition to he identified. We illustrate the use of dynamic shift-share by presenting results of an analysis of New England employment growth from 1939 to 1984, using U.S. Bureau of Labor Statistics data. The use of the dynamic form of shift-share is important when the study period is characterized by either large changes in regional industrial mix or major differences between regional and national growth rates.     

Productivity Change in Manufacturing Regions: A Multifactor/Shift-Share Approach

ABSTRACT 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.     

Regional Growth Dynamics in the Service Sector: The Determinants of Employment Change in UK Regions, 1971–2005

There is a need to better understand the dynamics relating to the evolving economic structure of regions, in particular factors concerning deindustrialisation and the growth of services. In order to unpick the dynamics relating to contemporary regional evolution, this paper examines regional employment in the UK's services sectors from 1971 to 2005. The analysis utilises the statistical technique of multi‐factor partitioning to examine the evolutionary dynamics of employment change in the UK service sector. Overall, differing growth trajectories in services employment across regions appear to be the result of the different underlying industrial structures observed within the regions themselves. The findings indicate that the industrial structure of a region has a significant influence on employment change in services, with related variety being of greater consequence than specialisation. This suggests that diversity, or urbanisation, effects have a greater influence than specialisation effects on “lighter” industries than “heavier” industries. Spatio‐temporal variations within the development of services are evident in the analysis, and there is evidence of convergence across the regions for all sub‐sectors examined. It concludes that in an increasingly services‐dominated economy, diversity and related variety have some weight in explaining regional development paths.     

Spatial Industrial Dynamics in Sweden: Urban Growth Industries

In this paper two basic theories within spatial industrial dynamics—the filtering-down theory and the spatial product cycle theory—are used to explain processes of spatial decentralization and centralization of economic activities. In particular, a case is made for the idea that employment decentralization should be expected not only for growing and maturing manufacturing industries but also for growing and maturing service industries. Based upon this theoretical framework the empirical part of the paper analysis the spatial behavior during the period 1980 to 1993 of the employment in a group of 19 industries in Sweden—the so-called urban growth industries—with an expected high potential for employment decentralization. Most of the industries exhibited the expected pattern of employment decentralization with the larger medium-sized regions as the main winners. A shift-share analysis shows that the overall magnitudes of the competitive shift components are rather small and that, hence, Sweden during the period 1980–1993 did not experience a drastic change in the spatial distribution of its urban growth industries.     

What matters for lagging regions? The role of self-employment and industrial diversity in distressed areas

Previous research suggests that having more self-employed or entrepreneurs can contribute to higher levels of economic growth in distressed areas. Additionally, self-employment in certain industries may be more beneficial to growth. Other research has linked industrial diversity to entrepreneurship and regional growth, especially in urban areas. However, the relationship between industrial diversity, self-employment, and growth in lagging or distressed regions is less clear. To examine these linkages in distressed areas, we first identify a group of distressed counties based on historic data. Then, using detailed industry-level self-employment data, we appraise whether having more self-employed from certain industries is associated with regional growth. We also analyze the relationship between industrial diversity and overall growth and the propensity to be self-employed. The results suggest that having more self-employment overall and in some key industries is associated with more employment growth in distressed counties. We also find that the relationship between economic diversity and self-employment varies by industry and region.     

Spatial Patterns in the Economic Development of the Mountain West

ABSTRACT Many counties in the mountainous areas of the western U.S. are experiencing rapid growth in population and income, even though extractive industries that served historically as their primary economic base are in decline. The purpose of this paper is to establish statistically the spatial determinants of population, employment, and income densities in 86 rural mountain counties and any changes in those determinants between 1985 and 1994. The results of this analysis indicate that densities are oriented to regional metropolitan centers and critical amenities such as ski areas, national parks, and universities or colleges. Negatively sloped density gradients with respect to distance from regional metropolitan centers suggest that the densities of settlement patterns beyond metropolitan boundaries are analogous to those within metropolitan areas relative to urban centers. In short, a tension apparently exists in locational choice; residents of the Mountain West desire to live near the beauties and amenities of the mountain landscape but do not want to entirely sever their urban ties. Because amenities are the primary attraction of mountain counties rather than employment in locationally dependent industries, at least some migrants must have relatively footloose forms of income.     

Shift‐Share Analysis and Changes in Japanese Manufacturing Employment

Shift‐share analysis is used to examine the role of spatial structure on changes in regional manufacturing employment, in contrast to the traditional focus of shift‐share studies on the role of industrial structure. It is argued that changes in a region's space‐economy can be understood not only in terms of the economic subdivisions of the region but also in terms of the contribution of its spatial subdivisions. The latter is illustrated by means of a case study of the contribution of different types of local area to changes in regional manufacturing employment in Japan. Each region was subdivided into four types of local area based on population density. The analysis covered the period from 1981 to 1995, a time of major transformation in Japan's space‐economy. The shift‐share model was also used to estimate the impact of local area output and productivity on changes in regional employment. In general, the results show that there was a progressive underdevelopment of the core regions, associated with falling output and productivity. The country's peripheral regions were characterized by development, associated with rising output and productivity. Atthe local scale, however, the picture is far more complex. Types of local area contributed to regional employment change in very different ways, with respect to both time, region, and output/productivity. The contribution of local spatial structure to the regional space‐economy of Japan is fundamentally fragmented and uneven.     

Considerations in Extending Shift-Share Analysis: Note

One of the limitations to the widespread use of the Esteban-Marquillas shift-share extension has been the Stokes (1974) proof of the lack of regional additivity of the Esteban-Marquillas competitive components. Since the Arcelus extension (1984) of the traditional shift-share decomposition is a continuation of the logical framework by Esteban-Marquillas (1972), the Stokes criticism would at first appear to have equal relevance to this new work. This note demonstrates that the relationship between the rate of growth of the larger region and the rates of growth of its constituent subregions is ignored in the Stokes criticism and in the subsequent critique by Beaudry and Martin (1979). By explicitly incorporating the relationship between the rate of growth of the larger region and the rates of growth of the constituent subregions, we also demonstrate that the recent shift-share extensions by Esteban-Marquillas and Arcelus share with the classical shift-share decomposition the desirable additive properties under regional disaggregation of the data.     

Global Markets and the Role of Geographical Proximity in Mexico's Employment Growth

In the context of greater economic integration with global markets and structural economic reforms, this paper analyses regional and sectoral employment growth dynamics in Mexican states between 2004 and 2014. The methodology is based on spatial shift‐share analysis that explicitly considers interregional interactions in employment while assessing potential spillover effects arising from spatial interactions among states and industrial sectors. The results suggest a competitive effect from some industries—such as those related to science and specialized suppliers, intensive scale industries and dominated providers—which led to the formation of industrial corridors of neighboring states that connect the central region with the northeast region of the country. It was also found that proximity to states such as Nuevo Leon, Queretaro, Guanajuato, San Luis Potosi, and Puebla has positively influenced neighboring states in terms of employment growth rates. The results also support the argument of some sort of de‐concentration of economic activity in the capital, Mexico City, toward neighboring states.     

The elusive quest for balanced regional growth from Barlow to Brexit: Lessons from partitioning regional employment growth in Great Britain

The British Government’s economic strategy for post‐Brexit Britain of achieving balanced regional growth by “driving growth across the whole country” echoes the objectives set by the Barlow Report of 1940. The regional policies that followed the Barlow Report were heavily influenced by papers written for the Commission by G D A (later Sir Donald) MacDougall. The first of these papers was included as an appendix to the report itself and introduced the shift‐share methodology to the analysis of regional employment growth, and subsequently shown to be flawed. The second paper considered the urban hierarchy and growth but was never fully developed. Consequently post‐war regional policy focussed on the contribution of industrial structure to employment growth without fully taking into account the urban hierarchy or regional locations of that employment. This article replaces the flawed shift‐share methodology with multifactor partitioning (MFP) and applies it to regional employment growth for the period 1971‐2012, a span of special interest because it largely coincides with British membership of the European Union (EU). The deficiencies in the second paper are addressed by introducing allometry to measure the employment growth of each region relative to that of Great Britain and then regression analysis to relate the allometries to distance from London. The results of the two sets of analyses highlight the need for a multiple‐factor, comprehensive, and integrated approach to regional policy and provide a benchmark against which to gauge the success of Britain's post‐Brexit policy of driving future growth across the whole country.     

Developments in the Location of Selected Computer-Related Industries in the united states

This study focuses upon changes in three computer-related industries between 1974 and 1985. An attempt is made by means of entropy indices and shift-share analysis to determine if diffusion in those industries conforms to the product-cycle model. We employ primarily state-level data derived from County Business Patterns and supplemented by US. Censuses of Manufacturing and Services. Our findings indicate that all the industries displayed substantial increases in employment and considerable dispersion, although by no means were the changes uniform. The hypothesis that the dispersion is following the product-cycle model, that is, from core areas to peripheral regions, receives little support from this study. The model, however, should not be rejected out of hand, because all three industries studied have a duality in the size of firms that the data masks. This duality may affect the applicability of any model. Further attempts to explain the spatial distribution of any of these industries should begin with disintegrated data. Unfortunately such data are not presently easily attainable.     

Employment Growth by Firm Size During the Recent Crisis in Italy: A Multifactor Partitioning Analysis

The effects on employment growth in firms, grouped by size class, of the economic crisis that began in 2008 are analysed using multifactor partitioning (MFP). Italy's employment growth is decomposed into four explanatory factors: the stage in the business cycle; the effect of firm size; industry composition; and regional distribution; together with the interactions among these four effects. The interpretation of these effects is facilitated by the introduction within the MFP framework of a new decomposition of several key elements. The results show that the adopted approach and the suggested decompositions are useful to study the effect of size on employment change. This effect is found to be negative only for micro units (with less than 10 employees). For the other classes, it is positive. The observed negative changes in these classes are mainly due to the business cycle and an unfavourable industrial composition.     

State Unemployment Differentials: Equilibrium Factors vs. Differential Employment Growth

: Differentials in U.S. state unemployment rates were persistent in the early 1990s. In addition, states with higher employment growth did not necessarily have the lowest unemployment rates. Thus, this paper examines the differentials in U.S. state unemployment rates from 1992 to 1994, decomposing them into the parts that were due to differences in recent employment growth, and those that were due to longer-term equilibrium factors. Also, using the shift-share model, employment growth differences are decomposed into an industry mix component and a competitiveness component. The decomposition of the 1992 to 1994 unemployment rate differentials is based on an econometric equation estimated using panel data from 1972 to 1991. Explanatory equilibrium factors included in the model are amenities, demographic characteristics, education, industry composition, labor mobility, and wage rates.     

The Successful Transition to a Knowledge‐Based Development Path of a Less‐Developed Region

This paper presents the case of a less‐developed EU region—the Pomeranian region of Poland—that is, an example of the successful transformation from a command to market economy and the creation of a new knowledge‐based development path thanks to the upgrading of its innovation model. This successful transformation was based, in part, on the region's specific innovation policy and the activities of pro‐innovative institutions; however, other factors were also important such as the diversified structure of the region's economy. New knowledge‐based industries have developed in the region, while the potential of traditional industries that have gone through a restructuring, has been maintained. The factors that existed prior to the innovation model's transformation included such aspects as the high quality of human and social capital, a strong academic center, a high quality of life, and an open economy and society. Supply factors in the form of qualified personnel were crucial for the growth of employment in new industries and R&D that determined the improvement of the regional GDP per capita. Moreover, the transition to a knowledge‐based economy stimulated an increase in the concentration of population in the metropolitan area of Tri‐City.     

中部地区产业结构演变与经济增长关系研究

以1995-2009年统计数据为基础,利用偏离-份额分析法（SSM）重点探究了中部地区的产业结构演替与经济增长之间的关系,为各省调整产业结构、促进中部崛起提供理论指导。结果表明：1.中部地区产业结构变化总体与产业结构演进的一般规律相符。2.中部地区产业结构演替对经济发展的影响情况分为：江西和安徽产业结构偏离为负,竞争力偏离份额为负;山西和河南产业结构偏离为正,竞争力偏离份额为负;湖北和湖南产业结构偏离为负,竞争力偏离份额为正等3种类型。3.产业结构变迁对各省经济增长的影响差异较大。     

Natural Amenities and Rural Development: Understanding Spatial and Distributional Attributes

ABSTRACT Contemporary resource management practice and rural development planning increasingly emphasize the integration of resource extractive industries with non‐market‐based recreational and amenity values. There is a growing empirical literature which suggests that natural amenities impact regional economies through aggregate measures of economic performance such as population, income, and/or employment growth, and housing development. We maintain that assessing the developmental aspects of amenity‐led regional change requires a more thorough focus on alternative measures of economic performance such as income distribution and spatial organization. In the applied research presented here we investigate relationships between amenities and regional economic development indicators. Results suggest mixed and generally insignificant amenity‐based associations which highlight the need for appropriate regional economic modeling techniques that account for often dramatic spatial autocorrelation of natural amenity attributes. We conclude that with respect to amenity driven economic growth and development “place in space” matters.     

Weighted spatial dynamic shift-share model as a forecasting tool for a regional economy: The case of South Korea

This study proposes a weighted spatial dynamic shift-share model that considers two regional attributes, namely, interregional interactions and regional receptive capabilities for domestic and international economic change, to improve the forecasting capability of the traditional shift-share model. In particular, the spatial dependence among regions is embodied by a spatial weight matrix based on contiguity. Additionally, regional receptive capabilities are represented by weights imposed on regional industries. Forecasts over the period of 2014–2016 are made for 14 regions in South Korea using the proposed model. The results are compared with actual data from the same period and evaluated in terms of the mean absolute percentage error. The results indicate that the proposed model is more reliable and accurate than the traditional model and other dynamic extensions.