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Two-mode clustering through profiles of regions and sectors

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Abstract

This paper is concerned with simultaneously regrouping regions and sectors when analyzing the relative sectorial specialization of regions and the relative regional concentration of sectors. An automatic two-mode clustering algorithm is proposed with a view toward a concept of overall localization, corresponding to a discrepancy between an actual two-way contingency table (regions \(\times \) sectors) and an hypothetical table reflecting independence between regions and sectors. This procedure identifies similar regions (respectively sectors) according to the relative sectorial (respectively regional) structure. This algorithm significantly reduces the size of the original table and obtain an optimal collapsed table with low level of information loss vis-à-vis the degree of overall localization. The properties and results of the algorithm are discussed through two applications, namely Argentina and Brazil.

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Funding

Michel Mouchart gratefully acknowledges financial support from IAP research network Grant No. P6/03 of the Belgian government (Belgian Science Policy). Both authors gratefully acknowledge the financial support of FOP, that promoted intercontinental cooperation.

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Authors and Affiliations

  1. Fundación Observatorio PyME (FOP), Ciudad Autónoma de Buenos Aires, Argentina

    Christian Haedo

  2. Institut de Statistique, Biostatistique et Sciences Actuarielles (ISBA), Université catholique de Louvain, Louvain-la-Neuve, Belgium

    Michel Mouchart

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  1. Christian Haedo
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Correspondence to Christian Haedo.

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Michel Mouchart gratefully acknowledges financial support from IAP research network grant nrP6/03 of the Belgian government (Belgian Science Policy). Both authors gratefully acknowledge the financial support of FOP, that promoted intercontinental cooperation. A special thank is due to Vicente N. Donato for the impetus he gave to the development of the topic of this paper. Dominique Peeters also deserves a particular gratitude for a series of comments that lead to substantial improvements of a previous version of this paper. The help of Fernando Valli has been instrumental in shaping the algorithm developed in this paper and is deeply acknowledged. Highly appreciated and gratefully acknowledged are also comments given by technical analysts participating to seminars where this paper has been presented, namely at the Competitiveness and Innovation Division of the Inter-American Development Bank (IADB) in Madrid (Sp) and Washington (USA), at the Structural Policies and Innovation Unit of the OECD Development Centre in Paris (Fr) and at the Farnesina of the Ministero degli Affari Esteri e della Cooperazione Internazionale (MAECI) in Roma (It).

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Haedo, C., Mouchart, M. Two-mode clustering through profiles of regions and sectors. Empir Econ 63, 1971–1996 (2022). https://doi.org/10.1007/s00181-022-02201-z

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