The multi-factor partitioning model and a suggestion for its modification

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Abstract

The multi-factor partitioning model (MFP) is one of the shift-share analysis models and constitutes an essential contribution to the effort of describing and understanding a region’s growth. The purpose of the present paper is: 1) To present, the multi-factor partitioning model and its connection to traditional and homothetic one; 2) To explain why the use of standardized relative changes in the use of the MFP model ignores two effects: the distribution effect and the structure effect; 3) To propose a modification of multi-factor partitioning model to take into account the previous mentioned effects; 4) To apply the multi-factor partitioning and the proposed modified multi-factor partitioning model in order to identify growth regional patterns in thirteen Greek regions, and show that the use of multi-factor partitioning model instead the proposed modified model, misleads us to the results.

Keywords: Multi-Factor Partition, Shift-Share Analysis, Regional Planning, Homothetic Employment

Authors’ individual contribution: Conceptualization – G.X. and K.P.; Methodology - G.X. and K.P.; Writing – G.X. and K.P.

JEL Classification: R10, R11, R19, R50

Received: 07.05.2019
Accepted: 18.11.2019
Published online: 19.11.2019

How to cite this paper: Xanthos, G., & Psimarni, K. (2019). The multi-factor partitioning model and a suggestion for its modification. Journal of Governance & Regulation, 8(4), 21-34. https://doi.org/10.22495/jgrv8i4art2