Economic diversity, unemployment and the Great Recession

Geographical scale, industrial diversity, and regional economic stability

“…Likewise, industrial diversity and diversification research also attracts interests from policy makers and governments because of its impacts on regional economic development (Feser et al, ; Jackson, ; Wagner & Deller, ). More recently, scholarly research has focused on the relationship between industrial diversity and regional economic performance during the Great Recession in the late 2000s (e.g., Deller & Watson, ; Watson & Deller, ).…”

“…That said, variations in scale have not been incorporated into the literature, and the majority of current studies have used only a single geographical scale in quantifying economic structure. For instance, in the U.S. context, states (Attaran, ; Wagner & Deller, ), counties (Deller & Watson, ; Watson & Deller, ), Metropolitan Statistical Areas (MSAs; Conroy, ; Hong & Xiao, ; Malizia & Ke, ), and Economic Areas (EAs; Keinath, ; Porter, ) have been used. Beyond the U.S.‐based studies, the corresponding geographical units include metropolitan areas in Japan (Mizuno, Mizutani, & Nakayama, ), cities in China (Fu, Dong, & Chai, ), and Local Government Areas in Australia (Trendle, ).…”

“…As mentioned earlier, the geographical units used in the literature of economic diversity include cities (Mclaughlin, ), metropolitan areas (Conroy, ; Hong & Xiao, ; Kort, ; Rodgers, ), county groups (Jackson, ), states (Attaran, ; Wagner & Deller, ), counties (Deller & Watson, ; Mack, Grubesic, & Kessler, ; Watson & Deller, ), and EAs (Keinath, ) and can be divided into two types: formal and functional regions . Formal regions like states and counties are defined by government, and the boundaries of these regions are normally stable over time.…”

“…For instance, Trendle () used Local Government Areas to study industrial diversity and also considered the role of spatial spillovers within the diversity–stability relationship using spatial econometric models. On the other hand, other studies (e.g., Deller & Watson, ; Mack et al, ; Wagner & Deller, ; Watson & Deller, ) have used formal regions like states and counties as the basic units. For example, Wagner and Deller () used states to study diversity and economic performance because of direct policy relevance and data availability.…”

“…For example, Wagner and Deller () used states to study diversity and economic performance because of direct policy relevance and data availability. For the same reasons, Deller and Watson (, ) and Watson and Deller () recently used counties as the units of observation. Particularly, Deller and Watson (, p. 1828) admitted that counties are not functional regions, and thus “spillover effects across county lines” should be expected.…”