Structural, residual, geographical: principle and implementation of accounting and econometric approaches

This document presents methods for analysing the differences in developments between territories. These differences may be due to sectoral structures which will need to be isolated to show effects that can be attributed to, for example, a greater or lesser degree of local competitiveness, different capacities for innovation.

Frequently used analytical methods have developed from the "shift-share" modeling, which allows an analysis that can be described here as structural-residual. Approaches based on variance analysis were subsequently developed, which aim at more explicitly involving the territorial dimension. These models are often grouped under the term geographic structures, despite some reservations about the use of the term geographic.

The first part of the document presents the two approaches: accounting decomposition and econometric analysis. In a second part, the two approaches are implemented on the same example: the analysis of employment growth between 2000 and 2014 in French regions. The results are detailed and commented on with the main elements of interpretation specific to each method.