Interpreting Location Quotients
Industries with LQ = 1 have a local employment share exactly equal to their share in the national economy
- Local production in these industries is assumed to be just sufficient to satisfy local demand, and the industry is assumed to contain no basic employment
Industries with LQ < 1 have local employment shares smaller than national shares
- Local production in these industries is assumed to be insufficient to satisfy local demand and require products to be imported
Industries with LQ > 1 have local employment shares which are larger than their national shares
- Local production in these industries are specialized and are assumed to exceed local demand, allowing the excess to be exported