Shift and share slides

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Shift-Share Analysis

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Thinking about local growth
• US growing  we should grow…
• Wilmington:
 Strong in L&H
 Weak in manufacturing
 Wont grow the same as US…
• But people moving to town…
 Decompose growth to identify patterns
 Roughly:
• Local = National + Industry diff. + Diff. Regional Rate

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Shift and Share Analysis
• Divides growth into three components
 National growth component – growth at national
rate
 If region grows at national rate, maintains its “share”
 Mix component – growth difference owing to
differences in initial employment mix
 Competitive component – differences due to
local environment, i.e. permitting,
infrastructure, etc.
 Industry “shifting” to new region

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For a single industry

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Example…

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 Data fairly available
 But:
• Local industry may differ from national
even for a specific sector
 Maybe the national level isn’t right benchmark
• Difficult to select appropriate industry
level
 All manufacturing or a specific plant…
 i.e. all food processing or only smoked fish
 If one plant is industry  local = national

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SCHOOL OF BUSINESS
Data fairly available
But:
• Competitive component can change quickly
• Past performance may not match future
 Difficult to identify cause (regulations, infrastructure,
employee at firm, etc.)