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CAMERON
SCHOOL OF BUSINESS
Shift-Share Analysis
CAMERON
SCHOOL OF BUSINESS
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
CAMERON
SCHOOL OF BUSINESS
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
CAMERON
SCHOOL OF BUSINESS
For a single industry
CAMERON
SCHOOL OF BUSINESS
Example…
CAMERON
SCHOOL OF BUSINESS
 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
CAMERON
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.)

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Shift and share slides

  • 2. CAMERON SCHOOL OF BUSINESS 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
  • 3. CAMERON SCHOOL OF BUSINESS 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
  • 4. CAMERON SCHOOL OF BUSINESS For a single industry
  • 6. CAMERON SCHOOL OF BUSINESS  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
  • 7. CAMERON 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.)