|
on Economic Geography |
| By: | Wiberg, Magnus (Ministry of finance) |
| Abstract: | This paper analyzes the location of manufacturing activities when regional policy is determined by each region’s relative propensity to vote. Once voting over government transfers to regions is included in an economic geography framework with size asymmetries, the standard prediction that the larger region becomes the core when trade barriers are reduced no longer holds. The establishment of manufacturing production in the economically smaller region is increasing in the level of regional integration. As trade is increasingly liberalized, the economy eventually features a reversed core-periphery equilibrium where all firms reside in the South. It is further shown that the relative political participation rate increases in the factor scarce region as trade is liberalized. Empirical evidence shows that the model is consistent with qualitative features of the data. |
| Keywords: | Economic Geography; Regional Policy; Voter Turnout |
| JEL: | D72 F12 R12 |
| Date: | 2010–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2010_0005&r=geo |
| By: | Wiberg, Magnus (Ministry of finance) |
| Abstract: | This paper analyzes the effects of different corporate tax systems on the location of industry within an economic geography model with regional size asymmetries. Both the North and the South gain industry by adopting a tax regime that produces the lowest tax level. As the share of expenditures in the North increases, the Nash equilibrium has this region setting regressive taxes, while the South introduces progressive taxation. The unilateral welfare-maximizing tax structure in the North (South) is the regressive (progressive) system when expenditures in the North increase. Welfare in the North (South) is however maximized if both regions set regressive (progressive) taxes, while regressive (progressive) taxation in both regions represents a joint welfare maximizing outcome if the economic size of the North is higher (lower) than a certain threshold value. As trade is liberalized, the equilibrium tax regime adopted depends on how pro ts respond to lower trade costs. Proportional taxation is never an equilibrium, neither as regional spending changes, nor as trade is liberalized. |
| Keywords: | Economic Geography; Tax Systems; Corporate Taxation |
| JEL: | F12 H25 R12 |
| Date: | 2010–04–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2010_0006&r=geo |
| By: | OKUBO Toshihiro; TOMIURA Eiichi |
| Abstract: | This paper empirically examines how productivity distributions of firms vary across regions based on Japanfs manufacturing census data. We confirm the established finding of higher average productivity in core regions, but find that firm productivity is distributed with wide dispersions, especially in core regions. Our firm-level estimates demonstrate that the productivity distribution of firms tends to be noticeably left-skewed deviating from the normal distribution, especially in regions with weak market potential but also in agglomerated or urbanized regions. These findings suggest that agglomeration economies are likely to accommodate heterogeneous firms to co-exist in the same region. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10017&r=geo |
| By: | OKUBO Toshihiro; TOMIURA Eiichi |
| Abstract: | In an economic geography model with firm heterogeneity, Baldwin and Okubo (2006) show that regional policies for promoting periphery development attract low-productivity firms and adversely affect the productivity gap within a country. This paper empirically examines their theoretical prediction by using plant-level data during active relocation policies in Japan. Our estimation results from plant-level regressions and propensity-score matching that are generally consistent with the theory. Compared to other regions, those targeted by policies, especially by industrial relocation subsidy programs, tend to have low-productivity plants. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:10016&r=geo |
| By: | Yamada, Gustavo |
| Abstract: | We analyze trends in regional economic growth, employment and internal migration during one of the best periods of economic boom in Peru´s modern history. Migration among departamentos from 2002 to 2007, captured in the last population census, has been consistent with regional labour prospects, such as initial stocks and recent increases in the volumes of adequate employment. The relative size of internal migration has declined compared to the period 1988-1993 due to the virtual elimination of terrorism-led migration, retaking a long run declining trend observed for the South America region. However, migration corridors opened up in the 1980s and 1990s have persisted during this decade. Empirical models show that the migration decision also takes into account potential gains in living standards, through the improved access to economic and social infrastructure. Likewise, the report finds evidence that internal migration flows support the process of conditional convergence across regional per capita GDPs. However, these same flows do not seem to influence significantly the speed of earnings convergence across regions. |
| Keywords: | Employment; migration; economic growth. |
| JEL: | J10 O15 J01 D60 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22067&r=geo |
| By: | Christiaensen, Luc, Demery, Lionel and Kuhl, Jesper |
| Abstract: | Using 2000-04 panel data this study analyses the pathways rural households followed out of poverty in two lagging provinces of China, Inner Mongolia and Gansu. Rising labour productivity in agriculture has been key, and still holds much promise. Labour mobility has also been important in Gansu. So far, rural diversification has not proven to contribute much to poverty reduction. Income transfers and agricultural tax abolishment have helped at the margin. Overall, the findings highlight that the scope for reducing poverty in lagging rural regions is often substantial in agriculture, also in countries where non-agriculture drives overall growth. |
| Keywords: | agriculture, migration, rural nonfarm employment, lagging region, poverty |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-35&r=geo |