POINT PATTERN METHODS for ANALYZING INDUSTRIAL LOCATION

Abstract

Literature on point pattern methods for analyzing geographical concentration of firms has increased dramatically over the last decade. Revision of the state of the art in empirical applications shows that most methods are mainly exploratory while others focus on the identification of cluster determinants. We contribute in this regard by analyzing key features that underline the differences among exploratory methods: Functional form, selection of controls, significance of results, and treatment of edge effects. We also stress the potential and complementarity of new methods such as Gibbs models.