Scientific and practical journal
Regional Economy

Journal Regional Economy -- re2017.01.120

Repository of Institute of Regional Research Repository of Vernadsky Library UDC 332.15:334.722; JEL P25, R32, R58
Yaskal, I. V. (2017). Pidkhody do vymiryuvannya prostorovoyi lokalizatsiyi pidpryyemnyts'koyi diyal'nosti [Approaches to measuring the spatial localization of business]. Rehional'na ekonomika - Regional Economy, 83(1), 120-128. [in Ukrainian].
Sources: 25



The article is devoted to the evaluation of business activities localization. Ukrainian scientific literature contains some aspects of considered issues. The most used indicator that allows evaluating the concentration of business activity is the localization coefficient. Author interpretation of the term «localization of business activities» has been suggested, it means process of concentration of business activity in certain points (or areas) of space, which are characterized by a high level of involvement in national and international networks of production, exchange and consumption. Increased attention to the study of the localization has been generated by the need of responding to the changes caused by the global economy. A review of the literature has been carried out about the methodological approaches to measuring the spatial localization of business activities. The potential use of these techniques in Ukrainian realities has been assessed. The strengths and weaknesses of each method have been considered. It has been shown that the next approach had an aim to neutralize the shortcomings of previous developments, as well as to take into account the existing features of the placement of business activity in space. As a result, many different methodological approaches to the evaluation of localization of economic activity are currently available, including modifications. The variety of approaches to measure the spatial location of business activities should be explained by the complexity of the investigated phenomenon, especially at current stage when scientists permanently discover previously unknown factors of the concentration in a particular place. The necessity of implementing them in a systematic monitoring process of spatial localization has been underlined. This will create the basis for regulation of these processes. Measurement of localization at the regional level allows, firstly, identifying the causes of uneven economic development, and accordingly developing of adequate instruments of these phenomena regulation (or mitigation of adverse effects). Secondly, through assessment, regulation and forecasting of business localization local authorities can influence the structure of the regional economy.


localization of business, localization coefficient, Gini coefficient, EG-index, D-index, distance-based methods, regulation of business localization


  1. Bachurina, I. V., & Butko, M. P. (2009). Plodoovocheva haluz’ Ukrayiny: rehional’ni vyklyky [Fruit and vegetable sector in Ukraine: regional challenges]. Rehional’na ekonomika – Regional Economy, 53(3), 59-66. [in Ukrainian].
  2. Zablotskyy, B. F. (2008). Regional’na ekonomika [Regional economy] (Manual). Lviv: New World-2000. [in Ukrainian].
  3. Isard, W. (1966). Metody regional'nogo analiza: vvedeniye v nauku o regionakh [Methods of regional analysis: An introduction to the science of regions]. Moscow: Progress. [in Russian].
  4. Oliynyk, Ya. B., Zapototskyy, S. P., Kononenko O. Yu., Melnychuk, A. L., & Pasko, V. F. (2008). Rehional’na ekonomika [Regional economy] (Manual). 2nd ed. Kyiv: Publisher Fursa S. Y. [in Ukrainian].
  5. Yaskal, I. V. (2010). Udoskonalennya metodiv vyznachennya napryamkiv i form vyrobnycho-resursnoyi intehratsiyi u rehioni [Improving methods of determining the directions and forms of production and resource integration in the region]. Rehional’na ekonomika – Regional Economy, 56(2), 23-32. [in Ukrainian].
  6. Carlton, D. (1983). The location and employment choices of new firms: An econometric model with discrete and continuous endogenous variables. In The Review of Economic and Statistics: Vol. 65, Iss. 3 (pp. 440-449).
  7. De Silva, D. G., & McComb, R. P. (2012). Geographic concentration and high tech firm survival. Regional Science and Urban Economics, 42, 691-701.
  8. Devereux, M. P., Griffith, R., & Simpson, H. (2004). The Geographic Distribution of Production Activity in the UK. Regional Science and Urban Economics, 34(5), 533-564.
  9. Duranton, G., & Overman, H. (2005). Testing for Localisation Using Micro-Geographic Data. Review of Economic Studies, 72(4), 1077-1106.
  10. Ellison, G., & Glaeser, E. (1997). Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach. Journal of Political Economy, 105(5), 889-927.
  11. Feser, E. J., & Sweeney, S. H. (2002). Theory, methods and cross-metropolitan comparison of business clustering. In P. McCann, & E. Elgar (Eds.), Industrial Location Economics. Cheltenham: Glos (pp. 221-259).
  12. Fratesi, U. (2008). Issues in the measurement of localization. Environment and Planning A, 40(3), 733-758.
  13. Guimaraes, P., Figueiredo, O., & Woodward, D. (2007). Measuring the localization of economic activity: a parametric approach. Journal of Regional Science, 47(4), 753-774.
  14. Goldsmith, E., & Mander, J. (2001). The Case Against the Global Economy and for a Turn Towards Localization. London: Earthscan.
  15. Hill, E. W., & Brennan, J. F. (2000). A Methodology for Identifying the Drivers of Industrial Clusters: The Foundation of Regional Competitive Advantage. Economic Development Quarterly, 14(1), 65-96.
  16. Hines, C. (2000). Localization: A Global Manifesto. London: Earthscan.
  17. Kim, Y., Barkley, D., & Henry, M. (2000). Industry Characteristics Link to Establishments Concentration in Nonmetropolitan Areas. Journal of Regional Science, 40(2), 231-259.
  18. Krugman, P. (1991). Geography and Trade. Cambridge, MA: M.I.T. Press.
  19. Liao, W. -Ch. (2012). Inshoring: The geographic fragmentation of production and inequality. Journal of Urban Economics, 72, 1-16.
  20. Marcon, E., & Puech, F. (2003). Evaluating the geographic concentration of industries using distance-based methods. Journal of Economic Geography, 3, 409-428.
  21. Maurel, F., & Sedillot, B. (1999). A Measure of the Geographic Concentration in French Manufacturing Industries. Regional Science and Urban Economics, 29(5), 575-604.
  22. Mori, T., Nishikimi, K., & Smith, T. E. (2005). A divergence statistic for industrial localization. Review of Economics and Statistics, 87, 635-651.
  23. Mota, I., & Brandão, A. (2013). The determinants of location choice: Single plants versus multi-plants. Papers in Regional Science, 92(1), 31-49.
  24. Shuman, M. (1998). Going Local Creating Self-Reliant Communities in a Global Age. New York: Free Press.
  25. Strotebeck, F. (2013). The Location Quotient – Assembly and application of methodological enhancements. In MPRA Paper No. 47988.

Web Master P. Popadiuk