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The Role of Industrial Diversity in Economic Resilience: An Empirical Examination Across 35 Years

Journal Title Urban Studies
Published Date January 19, 2016
Research Type
Authors Rob Greenbaum


As recovery from the Great Recession continues, economic development scholars and practitioners are again focused on the pace and the sustainability of recovery, as well as on efforts to minimise the severity of future downturns. This paper contributes to the literature by exploring the relationship between industry diversity and economic resilience over time. Using fixed effects models with data from the Bureau of Labour Statistics and the Census Bureau, the paper examines the influence of industrial diversity and concentration on unemployment rate stability in Ohio counties between 1977 and 2011. Results indicate that while more concentrated counties had lower unemployment rates when times were good, counties with more diverse industry structures fared better during times of national or local employment shocks. The paper also finds that there is a relationship between concentration in particular industries and the ability to withstand a shock changes over the 35 years examined, thus highlighting the need to take care when interpreting findings over shorter periods and the need to consider the particular industry of dependence. While local policymakers have little ability to affect industrial concentration in the short run, the paper recommends that highly concentrated counties adopt policies that may help buffer their economies to effects of negative shocks.

Brown, Lathania and Robert T. Greenbaum, 2017, “The Role of Industrial Diversity in Economic Resilience: An Empirical Examination across 35 Years,” Urban Studies, 54(6): 1347-1366.