Detecting and interpreting clusters of economic activity in rural areas using scan statistic and LISA under a unified framework

The primary aim of this paper is to expose the use and the value of spatial statistical analysis in business and especially in designing economic policies in rural areas. Specifically, we aim to present under a unified framework, the use of both point and area-based methods, in order to analyze in-depth economic data, as well as, to drive conclusions through interpreting the analysis results. The motivating problem is related to the establishment of women-run enterprises in a rural area of Greece. Moreover, in this article, the spatial scan statistic is successfully applied to the spatial economic data at hand, in order to detect possible clusters of small women-run enterprises in a rural mountainous and disadvantaged region of Greece. Then, it is combined with Geographical Information System based on Local Indicator of Spatial Autocorrelation scan statistic for further exploring and interpreting the spatial patterns. The rejection of the random establishment of women-run enterprises and the interpretation of the clustering patterns are deemed necessary, in order to assist government in designing policies for rural development. Copyright © 2014 John Wiley & Sons, Ltd.

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