New evidence on measuring the geographical concentration of economic activities

Spatial interactions among regional units may influence the geographical distribution of economic activities. Many traditional measures of geographical concentration fail in capturing this aspect, being insensitive to permutations of the spatial position of regions. This paper proposes an approach to the measurement of geographical concentration of economic activities that accounts for spatial interactions among regions. The locational Gini is split into spatial and non-spatial components, so that a new interpretation of the index is presented. The measure is applied to evaluate the geographical concentration of different economic sectors for 1323 NUTS 3 regions in the European Union over the period 2001-2018.