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Unformatted text preview: CHAPTER 3: Why do Firms Cluster? I. EMPIRICS Question: why do firms that compete cluster? Empirical evidence from Harvard’s “Cluster Mapping Project” (Michael Porter) sign up and check their website interesting data (a) share of national employment in the industry to what extent is industry locally concentrated and where? (b) CAGR (compound average growth rate) of employment and wages what cluster is dynamic? (c ) Employment Location Quotient compares fraction of regional employment of industry in question to nation in relation to fraction of overall employment A. How can industry concentration be measured? We distinguish three measures: | - the GINI coefficient - the Concentration Ratio (CR) and - the Hirschman-Herfindahl Index (HHI) Gini Coefficient- is concentration measure (most commonly used to measure income inequality) - takes on values between zero (perfect equality) and one (maximal inequality) In the spatial context, we want to measure to what extent a certain industry is concentrated in certain counties. If an industry in concentrated in only a few counties, its spatial distribution is unequal and the Gini measure is high. Graphical representation: - the y-axis measures cumulative percentage employment in industry i- the x-axis measures the fraction of worker employed in industry i compared to all worker employed in industry...
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This note was uploaded on 04/05/2012 for the course ECON UA.31 taught by Professor Storchmann during the Spring '11 term at NYU.
- Spring '11