Classifying industries into types of relative concentration

摘要

Existing measures of relative concentration rank industries according to their degree of concentration. However, two equally strongly concentrated industries can have completely different types of concentration. Therefore, the paper proposes a new statistical approach that classifies each industry into one of six different geographical patterns, five of which represent different types of concentration, ranging from urban concentration to strongly rural concentration. The statistical identification of each industry's geographical pattern is based on two Goodman-Kruskal rank correlation coefficients. The power of this new approach is illustrated by using German employment data on 613 different industries in 412 regions.