Shift-Share Analysis of Regional Growth and Policy: A Critique.

This paper attempts to identify the circumstances in which the shift-share technique will successfully achieve the claims commonly made on its behalf. It is suggested that these circumstances are restrictive given the relevant economic theory. These problems seem to be especially severe when the technique is used in order to analyze the impact of regional policy. The empirical results that are presented suggest that these problems are likely to be important in practice, as well as in principle. Copyright 1989 by Blackwell Publishing Ltd