Date of Award


Document Type


Degree Name

Master of Arts (MA)



First Advisor

Dr. Christopher Decker


Why are some regional economies able to outperform those of other regions? Using state-level data in two separate analyses, this thesis shows that industrial diversity is one potential answer. Industrial diversity is calculated using the Herfindahl index. In the first model, duration analysis on state recessions occurring between 1979 and 1996 indicates that an increase in industrial diversity is associated with shorter recessions. Other determinants of recession duration include unemployment, change in real income per capita, proportion of non-white workers, total population, and change in population growth. In the second model, regression analyses on 2001 firm formation rates show that higher levels of industrial diversity are associated with higher rates of new small firm formation. Other determinants of small firm formation include education, availability of financing, average size of existing establishments, and presence of environmental hazardous waste sites. Based on these results for industrial diversity, state policies aimed at increasing diversity appear to be justifiable.


A Thesis Presented to the Department of Economics and the Faculty of the Graduate College University of Nebraska In Partial Fulfillment of the Requirements for the Degree Master of Arts in Economics University of Nebraska at Omaha. Copyright Angela M. Kuhlmann December, 2005.