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on Economic Geography |
| By: | S.Brakman; H.Garretsen; Joeri Gorter; Albert van der Horst; Marc Schramm |
| Abstract: | There are doubts about the effectiveness of regional policy. Well known are the fruitless attempts of Italy to bridge the gap between the Mezzogiorno and the North, of Germany to bridge the gap between the Neue Länder and the West, and of the European Commission to reduce regional disparities in general. We validate one explanation: agglomeration advantages lock business activity in relatively prosperous core regions, even though wages – and thus production costs – tend to be higher there. We set off from the ‘New Economic Geography’, a set of general equilibrium models that focus on location choice. Theory, descriptive statistics, and econometric analysis support the conclusion that the European economic geography is characterized by a network of local and stable core periphery systems. This implies that disparities between core regions and their peripheries at a (sub) provincial level of regional aggregation are with us to stay, as regional policy targeted on peripheries tends to be insufficient to counter centripetal market forces. Moreover, even if such policy has an impact, it may be adverse, as core regions may benefit disproportionately in the long run. A focus of regional policy on local agglomerations, which have a realistic chance to hold on to economic activity, is therefore desirable. |
| Keywords: | Models of Trade with Imperfect Competition and Scale Economies; Economic Integration; Economic Geography; |
| JEL: | F12 F15 R12 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:spcial:56&r=geo |
| By: | Didier Baudewyns (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | We study the link between economic structure and growth in the 43 Belgian ‘arrondissements’ between 1991 and 1997. We find empirical evidence that local economic structure has a significant impact on the local growth of the service sector as a whole. Sectoral specialization and competition would affect negatively local growth in this sector while we find strong evidence of a positive effect of sectoral diversity. The size of the local market would not play any role on growth but the average local income does so. Our results are consistent with those found by COMBES (2000) for local growth in France. |
| Keywords: | economic structure, local growth, specialization, sectoral diversity, competition. |
| JEL: | R11 O18 O4 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:05-15rs&r=geo |
| By: | Daniel J. Wilson |
| Abstract: | In this paper, I exploit the cross-sectional and time-series variation in R&D tax credits, and in turn the user cost of R&D, available from U.S. states between 1981-2002 to estimate the elasticity of private R&D with respect to both the within-state (internal) user cost and the out-of-state (external) user cost. To faciliate comparisons to previous studies of the R&D cost elasticity, I first estimate an R&D cost elasticity omitting external R&D costs; the estimated elasticity is negative, above unity (in absolute value), and statistically significant—a finding quite similar to that found by previous studies based on alternative data. Unlike previous studies, however, I then add the external R&D user cost to the regressions. I find the external-cost elasticity is positive and significant, raising concerns about whether having state-level R&D tax credits on top of federal credits is socially desirable. More importantly, I find the aggregate R&D price elasticity—the difference between the internal- and external-cost elasticities—is far smaller than previously estimated. In fact, the preferred specification yields a zero aggregate elasticity, suggesting a zero-sum game among states and raising questions about the efficacy of R&D tax credits more broadly. |
| Keywords: | Taxation ; Research and development |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:2005-08&r=geo |
| By: | Mariapia MENDOLA |
| Abstract: | In this paper we study the interrelationship between determinants of migration, conceived as a family strategy, and the potential impact of having a migrant household member on people left behind . Labour migration is often related to poverty but given its lump y-investment nature, poverty may constitute a motivation to migra te as well as a constraint to do it. We use cross-sectional house hold data from two rural regions of Bangladesh to test whether mi gration is a form of income diversification strategy that signifi cantly influences the risk-taking behaviour of source farm househ olds in agricultural activities. We account for heterogeneity of migration constraints differentiating between domestic (temporary and permanent) and international moving destinations. We find th at richer and large-holder households are more likely to particip ate in costly high-return migration (i.e. international migration ) and employ modern technologies, thereby achieving higher produc tivity. Poorer households, on the other hand, are not able to ove rcome entry costs of moving abroad and fall back on migration wit h low entry costs, and low returns (i.e. domestic migration); the latter does not help them to achieve production enhancements and may act as a poverty-trap locking households into persistent pov erty. |
| Keywords: | Internal and International Migration, Farm Household Behaviour, Agricultural Production Choices. |
| URL: | http://d.repec.org/n?u=RePEc:mil:wpdepa:2005-15&r=geo |