Abstract

Bias, unreliability and omission have been documented in traditional sources of trade data; the lack of service data in trade statistics is the most frequently cited shortcoming. Current trade liberalization is likely to exacerbate these deficiencies. This paper develops and applies a location quotient based methodology for analysing core-periphery dualism, thus obviating the use of trade data. Our application to the European Union shows agglomeration in core areas of high technology, large scale manufacturing, and producer service industries. Peripheral countries are shown to specialize in agriculture, extractives, low technology manufacturing, and standardized production. Detailed examination of two peripheral economies, Ireland and Denmark, finds that each departs from the mean of peripheral nations. A comparison of proxied trade data to actual trade data indicates that the location quotient method is a statistically viable means of proxying trade patterns.