An empirical selection of counties and centers that reflect potential for further growth in nonmetropolitan areas in Tennessee

This study attempted to describe the growth pattern of non-metropolitan areas of Tennessee during the decade of 1960-1970 and to designate sites which offer potential for further growth given the infrastructure already in place and the changing employment structure. Employment change, one of the basic units of measurement of economic growth, was analyzed.

A shift-share analysis was used to separate the employment changes into four components: national growth effect, industrial mix or composition effect, competitive effect, and allocative effect. The nonmetropolitan areas of Tennessee had a positive national growth effect because the local economy was highly interrelated with the trend of the national economy. The industrial mix effect, however, was generally negative. This meant that the areas possessed more nationally slow-growing industrial sectors rather than the fast-growing ones. A general observation regarding the competitive and allocative effects was made that a positive effect of the competitive component was accompanied by a negative effect of the allocative component. The positive competitive effect indicated that an area had an overall competitive advantage, whereas the negative allocative effect indicated that either an area was specializing in industries in which it lacked a competitive advantage or it was not specializing in industries in which it had a competitive advantage.

A cluster analysis was conducted using the composition and competitive components of each nonmetropolitan county. Two groups or clusters of counties were formed from this analysis. The group which contained a smaller number of counties was regarded as the group possibly comprising growth counties because growth counties were hypothesized to be dissimilar to most of the nonmetropolitan counties and the results of the clustering procedure showed that the group with a smaller number of counties had a much higher average competitive component than the other group.

Concepts from economic base theory were incorporated in the selection process of growth counties. The approach used was the minimum requirements base analysis which permitted classification of dissimilar nonmetropolitan counties into three types: Type I counties or primary growth counties; Type II counties or secondary growth counties; and Type III counties which did not exhibit growth potential. For each growth county selected, a growth center or site was identified. The results should be used in conjunction with results from additional research as input in policy decisions to initiate or promote economic growth.