Abstract
ABSTRACTEstimating dynamic localization economies: the inadvertent success of the specialization index and the location quotient. Regional Studies. After addressing definitional issues on the concepts of concentration and specialization, the paper reviews the justifications for and the interpretation of some indicators of localization economies used in the empirical literature on agglomeration economies: specialization indexes and location quotients. A simulation exercise shows under what conditions certain specifications lead to biased estimations of dynamic localization (Marshall–Arrow–Romer – MAR) externalities. The results suggest that applied researchers can choose between the size of the local industry, the specialization index and the location quotient to proxy for these externalities as far as they also encompass a correct proxy for the size of the local economy.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
