Academic journal article Australasian Journal of Regional Studies

Modelling Endogenous Employment Performance across Australia's Functional Economic Regions over the Decade 2001 to 2011

Academic journal article Australasian Journal of Regional Studies

Modelling Endogenous Employment Performance across Australia's Functional Economic Regions over the Decade 2001 to 2011

Article excerpt

1. INTRODUCTION

Modelling regional economic performance has long been a concern of regional scientists. In recent times, there has been considerable emphasis on focusing on endogenous growth (see, for example, Stimson, Stough and Roberts, 2006; Johansson et al., 2001; Stimson, Stough and Nijkamp, 2011; Stimson and Stough (with Salazar), 2009) providing a framework for measuring and modelling spatial variation in endogenous regional economic performance over time.

The modelling approach requires:

(a) specification of a dependent variable that measures how change in economic performance over time (both growth and decline) might be attributable to factors and processes that are endogenous to the region; and

(b) deciding on a set of independent variables that might provide explanation for the variation across regions in the incidence of that dependent variable, which is achieved using spatial econometric modelling.

That approach proposed by Stimson and Stough [with Salazar] (2009) has been adopted in several studies investigating the endogenous economic performance of regions across Australia over successive inter-census decadal periods (see Stimson, 2012; Stimson, Robson and Shyy, 2009a; 2009b; 2011; Stimson, Mitchell, Rohde and Shyy, 2011), and it is continued in this paper for the decade 2001-2011. It has also been used in the paper by Plummer et al. (2014). Importantly, in the research reported here, functional regions rather than de jure regions are used as the spatial base for the modelling. This has been shown to largely overcome the issue of spatial autocorrelation that is inherent in spatial econometric modelling based on using de jure regions as the spatial base for regional demarcation. The modelling reported in this paper employs a framework in which:

(a) the spatial base is 134 Functional Economic Regions (FERs) across both the capital city metropolitan regions and the non-metropolitan regions of Australia that have been derived by the authors (and reported in Stimson et al., 2016);

(b) the dependent variable, measuring endogenous regional employment performance, is the regional (or differential) component derived from a shift-share analysis of employment change over the decade 2001-2011; and

(c) the independent (explanatory) variables that potentially might explain variation in the dependent variable, are a set of 27 measures derived from census data that relate to factors and processes that regional scientists have been suggesting might influence endogenous regional performance, plus five locational variables.

The paper is structured as follows. The next section briefly reviews past approaches to research investigating regional economic performance in Australia. That is followed by an outline of the data and methodology used in the analysis. Next, the spatial patterns of endogenous regional performance--the dependent variable--over the decade 2001-2011 are mapped and described. The bulk of the paper then presents the results of the spatial econometric modelling performed to identify those factors that might explain the variations in endogenous regional employment performance across Australia's FERs. Finally, there is a brief discussion of the policy implications of the model findings.

2. OVERVIEW OF APPROACHES TO RESEARCH INTO REGIONAL PERFORMANCE IN AUSTRALIA

Since the 1970s Australia has undergone as series of significant structural economic transitions. The impacts of these shifts have not been homogeneous over space and there is considerable variation in the economic performance of regions across Australia, both within the major large metropolitan cities and beyond into regional Australia.

Stimson (2012) has provided a detailed review of research investigating regional economic performance in Australia, most of which has been based on using de jure rather than functional regions--such as Local Government Areas or Statistical Local Areas (SLAs), or aggregations of them--as the spatial unit of analysis. …

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