Will specialization continue forever? A case study of interactions between industry specialization and diversity

Xiaobing Shuai ()

The Annals of Regional Science, 2013, vol. 50, issue 1, 24 pages

Abstract: This paper studies the interactions between industry specialization and diversity. Several studies have shown that competitive industries in a region grew faster, thus expanding their shares in overall employment. The implication is that a region will become more specialized in its competitive industries and the process will continue forever baring external intervention. Utilizing an econometric model on county-level employment growth in Virginia, this study confirms that competitive industries experience faster employment growth, reinforcing specialization. However, as specialization proceeds, it reduces economic diversity. That will hurt job creation, as economic diversity also stimulates employment growth. The interactions between specialization and diversity can lead to complex patterns of industry structural change. This study concludes that if a locality starts with low economic diversity, specialization will continue to deepen and the region may be trapped with limited economic diversity. However, when an economy starts with high diversity, specialization and diversity tend to offset each other, resulting a more consistent industry structure. Copyright Springer-Verlag 2013

Keywords: R1 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1007/s00168-011-0467-z (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:anresc:v:50:y:2013:i:1:p:1-24

Ordering information: This journal article can be ordered from
http://link.springer.com/journal/168

DOI: 10.1007/s00168-011-0467-z

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().