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concentration in a certain area, productivity of concentrated region, representative
of industrially concentrated region. Knowledge-based industrial base is classified
into two groups such as an already highly concentrated region and concentration in
an on-going region.
If a few industries are highly specified in the highly concentrated region, those
industries are the representative industries of that region. If degree of industrial
concentration in the concentrated region is higher than average region and
industrial growth rate of this region is very high, this region could step into highly
concentrated region within a short period of time.
3.2.2 Location Quotient
The location quotient is an indicator that compares the importance of an industry
in the region with its importance in the nation.
LQ
ij
¼
X
ij
X
i
X
i
=
X
¼
ratio of industry i in region j
ratio of indusry i in the nation
LQ
ij
[ 1
industry i in the region j is specialized compare to the national average
=1
industry i in the region j is equally specialized compare to the national
average
\1
industry i in the region j is not specialized compare to the national
average
In calculating location quotient, employment is most frequently used but output
or income data also could be used. This method assumes that tastes and demand
patterns are the same in all areas and that the nation is a closed economy.
3.2.3 Shift-Share Analysis
Shift-share analysis is a technique used for the analysis of regional industrial
statistical data (employment, output, or income). Shift-share analysis measures
total change in the performance of the region relative to that of the nation over a
given time period (i.e., the nation's actual growth minus its 'expected' growth if it
had grown at the same rate as the nation).
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