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Lookup NU author(s): Professor Colin Wren
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This paper decomposes a geographical concentration index to examine for differences in the temporal scope of natural advantages and spillovers on industrial location. The former are time-invariant location attributes, whereas spillovers may decay due to obsolescence and the spatial diffusion of knowledge. Coupled with a frequency estimator approach, the paper develops an empirical methodology for quantifying these effects. This is tested by numerical simulation and by application to a dataset on the location of manufacturing foreign direct investment across the regions of Great Britain over 1985-2005. The results indicate that spillovers decay and extend for about 5 years on average across industries. Spillovers have the same location effect as natural advantages but only over a 3-year time horizon.
Author(s): Wren C
Publication type: Article
Publication status: Published
Journal: Regional Science and Urban Economics
Print publication date: 23/03/2012
ISSN (print): 0166-0462
Publisher: Elsevier BV
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