Evaluating the geographic concentration of industries using distance-based methods

We propose new methods for evaluating the spatial distributionof firms. To assess whether firms are concentrated or dispersed,economists have tradi-tionally used indices that analyse theheterogeneity of a spatial structure at a single geographiclevel. We introduce distance-based methods, Besag's L function(derived from Ripley's K function) and Diggle and Chetwynd'sD function to describe simultaneously spatial distribution atdifferent geographical scales. Our empirical applications considerthe distribution of French manufacturing firms in the Parisarea and in France generally. For some geographic levels, resultsshow significant concentration or dispersion of firms accordingto their sector of activity.