DIVERSIFICATION OR SPECIALIZATION
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Some industries are more labor intensive than others, so employment distributions alone do
not provide the full picture about the key drivers of economic growth. Location Quotients can
be calculated for the amounts of income, or Gross Regional Product, generated by different
industries in the same way as for employment.
The accompanying bar chart shows Location Quotients based on GRP. The highest LQ
is Laredo’s transportation and warehousing sector. Its reading at 4.5 is the same as its
corresponding reading based on employment. In addition to the oil and gas industry, Corpus
Christi’s Location Quotient is higher than two for its construction and manufacturing industries.
Location Quotient by GRP
. . .exportoriented
industries
are important
economic
drivers
because
exports
generate
income. . .
Regional economic development has commonly been described in terms of growth in “export”
industries. These industries typically export their goods or services outside the region, supporting
“ancillary” industries, such as retail, housing and personal services. Those export-oriented
industries are important economic drivers because exports generate income to pay for imports
and support local economic activity. Location quotients help identify those industries.
Annual Review of South Texas Economy