The role of industrial diversity in economic resilience: An empirical examination across 35 years

Abstract

As recovery from the Great Recession continues, economic development scholars and practitioners are again focused on the pace and the sustainability of recovery, as well as on efforts to minimise the severity of future downturns. This paper contributes to the literature by exploring the relationship between industry diversity and economic resilience over time. Using fixed effects models with data from the Bureau of Labour Statistics and the Census Bureau, the paper examines the influence of industrial diversity and concentration on unemployment rate stability in Ohio counties between 1977 and 2011. Results indicate that while more concentrated counties had lower unemployment rates when times were good, counties with more diverse industry structures fared better during times of national or local employment shocks. The paper also finds that there is a relationship between concentration in particular industries and the ability to withstand a shock changes over the 35 years examined, thus highlighting the need to take care when interpreting findings over shorter periods and the need to consider the particular industry of dependence. While local policymakers have little ability to affect industrial concentration in the short run, the paper recommends that highly concentrated counties adopt policies that may help buffer their economies to effects of negative shocks.

New directions in researching regional economic resilience and adaptation

“…Institutions will be crucial for organising the relations and interactions between actors and Economic base • Diversity in the economic structure and a composition with little dependence on procyclical industries (such as manufacturing), will diminish the impact of shocks (e.g. Brown & Greenbaum, 2016;Giannakis & Bruggeman, 2015;Groot et al, 2011;Martin et al, 2016;Ray, MacLachlan, Lamarche, & Srinath, 2017).…”

Diversity, Disparity and Territorial Resilience in the Context of the Economic Crisis: An Analysis of Rural Areas in Southern Spain

“…Economic capital includes factors such as employment and the labour market [76], level of income [10], innovation and entrepreneurship [45,[77][78][79], economic structure [80], specialisation [16,81] and diversification [45,82], economic dynamism [10], the importance of the agricultural and agri-food sector [48,83], the financial, industrial and construction sectors [84], and tourism and the service sector [10,37,48].…”

Multiattribute decision making for the assessment of disaster resilience in the Three Gorges Reservoir Area

“…The potential losses per unit volume of a landslide can be used directly to evaluate economic resilience. In recent years, some studies on economic resilience have paid more attention to economic crises and regional industrial structural adjustments (Brown and Greenbaum 2017). As a traditional industry, primary industry depends on the available resources but can have a negative impact on the environment; therefore, the more enterprises that rely on natural resources, the slower the recovery rate.…”