Regional growth and the attraction of economic activity

Abstract

With the growing interest being accorded to the problems of regional development in New Zealand, it has become increasingly obvious that there is a serious lack of both basic data and methods of analysis for the study of such problems. The present study is an attempt to remedy this lack through a study of the location pattern of economic activity. The central theme of this thesis is an analysis of regional economic interaction in New Zealand through the use of a modified gravity model. This model measures the potential attractiveness of each region for economic activities in terms of the size of regional markets This is measured by regional income as the attraction variable and the level of transport costs between regions. The calculation of economic potential for each New Zealand region was initially carried out on the assumption of a closed national economy with no external trade, and then with international trade between New Zealand and the rest of the world.