This study investigates the relationships among city size, economic stability, and various measures of industrial diversification. It was prompted by the conflicting findings of previous researchers concerning the above relationships. It finds different relationships between city size and various diversification measures. Therefore, part of the past disagreement may be due to the use of different definitions of diversification. The study also shows that a portfolio measure of diversification is highly significant in explaining instability. Instability can also be partly explained by measures of the equality of employment distribution. Finally, holding diversification measures constant, instability decreases with larger city size.
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