nep-geo New Economics Papers
on Economic Geography
Issue of 2005‒09‒17
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The spatial effect of intra-metropolitan agglomeration economies By Miguel Angel Garcia Lopez; Ivan Muñiz Olivera
  2. Local Employment Growth in West Germany: A Dynamic Panel Approach By Uwe Blien; Jens Suedekum; Katja Wolf
  3. Threshold Effects and Regional Economic Growth-Evidence from West Germany By Michael Funke; Annekatrin Niebuhr
  4. Drifting Together or Falling Apart? The Empirics of Regional Economic Growth in Post-Unification Germany By Roberta Colavecchio; Declan Curran; Michael Funke
  5. Employment descentralisation: polycentric compaction or sprawl? The case of the Barcelona Metropolitan Region 1986-1996 By Miguel Angel Garcia Lopez; Ivan Muñiz Olivera
  6. Descentralisation, Integration and polycentrism in Barcelona By Ivan Muñiz Olivera; Anna Galindo; Miguel Angel Garcia Lopez
  7. Does Governance Matter?Some Evidence from Indian States By Sudip Ranjan Basu
  8. Correlating Growth with Well-Being during Economic Reforms Evidence from India and China By Sudip Ranjan Basu
  9. Growth and Convergence in a Two-Region Model: The Hypothetical Case of Korean Unification By Michael Funke; Holger Strulik
  10. Decentralization with Property Taxation to Improve Incentives: Evidence from Local Governments’ Discrete Choice By Jørn Rattsø; Jon Hernes Fiva
  11. Economic Growth, Well-Being and Governance under Economic Reforms: Evidence from Indian States By Sudip Ranjan Basu
  12. Education, Neighbourhood Effects and Growth: An Agent Based Model Approach By Tanya Araújo; Miguel St. Aubyn
  13. Property Taxation as a Determinant of School District Efficiency By Marte Rønning; Jon Hernes Fiva
  14. The Determinants of Economic Well-being:An Application in the Indian States By Sudip Ranjan Basu
  16. What’s Keeping the Apples Away? Addressing the Market Integration Issue By Deodhar Satish Y

  1. By: Miguel Angel Garcia Lopez (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Ivan Muñiz Olivera (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: This study deals with the role of spatial accessibility to agglomeration economies in the change in spatial structure of industrial employment for the case of the Barcelona Metropolitan Region of Barcelona (BMR). Using the growth in gross density of municipal employment between 1986 and 1996 for seven manufacturing industries as an indicator of changes in the spatial structure of employment, an exploration is made of the spatial impact of agglomeration economies operating on a local scale – the municipality and three areas 5, 8 and 12 kilometres away surrounding the municipality itself - , agglomeration economies emerging from CBD and the main specialised subcentres in the region, and the network economies associated with the total jobs in the region, access to which depends on the distance from the main transport infrastructures
    Keywords: Agglomeration economies, industrial employment growth, intra-metropolitan localisation, spatial structure.
    JEL: R11 R12 R14 R30 L60
    Date: 2005–06
  2. By: Uwe Blien (Institute for Employment Research (IAB) and IZA Bonn); Jens Suedekum (University of Konstanz and IZA Bonn); Katja Wolf (Institute for Employment Research (IAB))
    Abstract: In this paper we study the dynamics of local employment growth in West Germany from 1980 to 2001. Using dynamic panel techniques, we analyse the timing of the impact of diversity and specialisation, as well as of the human capital structure of local industries. Diversity has a positive effect on employment growth in the short run, which is stronger in manufacturing than in services. Concerning specialization we find evidence for mean reversion, which is inconsistent with the idea that growth emphasizes itself. But there is considerable inertia in this process. A positive effect of education is only found in manufacturing. Additionally, we look at the impact of firm size and regional wages on local employment growth.
    Keywords: regional labour markets, externalities, local employment growth, dynamic panel estimation, urbanization and localisation effects
    JEL: R11 O40
    Date: 2005–07
  3. By: Michael Funke; Annekatrin Niebuhr
    Abstract: We study an overlapping generations model of human capital accumulation with threshold effects using regional data for West Germany. Our basic goal is to shed light on what makes German regions grow. The paper finds that the relative income distribution appears to be stratifying into a trimodal distribution. Thus, application of the threshold model to a real world case, here West Germany, shows that the model might help to explain regional growth patterns.
    Keywords: Regional Economic Growth, Human Capital, Germany
    JEL: J24 O40 R11 C31
    Date: 2005–01
  4. By: Roberta Colavecchio; Declan Curran; Michael Funke
    Abstract: The objective of this paper is to address the question of convergence across German districts in the first decade after German unification by drawing out and emphasising some stylised facts of regional per capita income dynamics. We achieve this by employing non-parametric techniques which focus on the evolution of the entire cross-sectional income distribution. In particular, we follow a distributional approach to convergence based on kernel density estimation and implement a number of tests to establish the statistical significance of our findings. This paper finds that the relative income distribution appears to be stratifying into a trimodal/bimodal distribution.
    Keywords: Regional Economic Growth, Germany, Convergence Clubs, Density Estimation, Modality Tests
    JEL: C14 R11 R12
    Date: 2005–08
  5. By: Miguel Angel Garcia Lopez (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Ivan Muñiz Olivera (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: The Barcelona Metropolitan Region (BMR) has been repeatedly characterised as a polycentric-type urban system. The aim of this study is to corroborate this affirmation by making use of a methodology that enables the identifying of employment subcentres and valuing of the degree of polycentrism of the BMR in 1986 and 1996. The results obtained in the two years confirm the existence and extension of the polycentrism.
    Keywords: Employment subcentres, identification, descentralisation, sprawl, compaction, polycentrism.
    JEL: R12 R14
    Date: 2005–06
  6. By: Ivan Muñiz Olivera (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Anna Galindo (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Miguel Angel Garcia Lopez (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: In this study the employment subcentres of the Metropolitan Region of Barcelona are identified using different criteria. Once catalogued according to their nature,i.e. subcentres arising from integration and decentralisation, they are analysed to see whether their impact on population density depends on their origin. The results obtained confirm a greater impact of integrated subcentres in comparison with decentralised ones, amplified in turn by the fact that the former are further from the CBD and present a greater degree of self-containment in the labor market.
    Keywords: Employment decentralisation, policentric city, metropolitan integration
    JEL: R12 R14
    Date: 2005–06
  7. By: Sudip Ranjan Basu (Graduate Institute of International Studies HEI , Geneva)
    Abstract: This paper attempts to propose a methodology to combine different dimensions of governance indicators into a composite index. The governance index is computed as the weighted average of principal components of the standardized governance indicators, where weights are variances of successive principal components. Since the notion of good governance is multi-dimensional, it is conceptualised as a goal and as a process that accelerates growth, equity and human development potential. We therefore estimate the governance index on the basis of five indicators, such as crime rates, riots, industrial disputes and strikes, Gini index, and debt-income ratio. Then we propose to explore whether the quality of governance determines development outcomes such as life expectancy, literacy, infant mortality rate and per capita income (logarithms of), within the panel data model framework. The evidence from 16 major Indian states (from state/regional level) strongly suggests that better quality of governance leads to better development outcomes.
    Keywords: Governance,Development,Index,Panel Data
    JEL: O1 N4 C0
    Date: 2005–09–08
  8. By: Sudip Ranjan Basu (Graduate Institute of International Studies HEI , Geneva)
    Abstract: This paper investigates the hypothesis that economic growth is critical in inducing well-being during economic reforms. The regional (16 Indian states and 28 Chinese provinces) level study of India and China show that the quality of growth has been essential for well-being. We estimate level of economic well-being by aggregating different socio- economic indicators through multivariate statistical method of factor analysis. We estimate economic growth (per capita income, real) along with their well-being level for four different sub-periods since 1978/80-2001 for all regions. Our empirical results confirm that differential level of well-being across regions is correlated with the quality of growth.
    Keywords: Growth, Well-being, Economic Reforms, Multivariate statistical method, India, China
    JEL: O C R11
    Date: 2005–09–08
  9. By: Michael Funke; Holger Strulik
    Abstract: The paper discusses the impact and implications of Korean unification by setting up a two-region endogenous growth model. The numerical solutions are based on the formal analytical model, and have been calibrated so that it reflects the observed features of the North and South Korean economies. The numerical solutions provide evidence about the speed of convergence and the large amount of interregional transfers that are required to make the North Korean economy economically viable.
    Keywords: Korean Unification, Regional Convergence; Economic Growth
    JEL: O41 O52 H31 H40
    Date: 2005–05
  10. By: Jørn Rattsø (Department of Economics, Norwegian University of Science and Technology); Jon Hernes Fiva (Centre for Economic Research and Department of Economics, Norwegian University of Science and Technology)
    Abstract: Decentralization of government with property tax financing is the standard recipe for public sector reform. Fiscal competition is assumed to stimulate efficiency and hold down the tax level. Property taxation offers additional incentives for efficiency. We study the incentive mechanisms involved using data for decentralized governments and in a setting where they can choose to have property taxation or not. The empirical analysis addresses whether fiscal competition and political control problems influence the choice of having property taxation. The results indicate that both incentive mechanisms are relevant and consequently support the standard advice. Fiscal competition generates a distinct geographic pattern in local taxation and political fragmentation seems to motivate property taxation to control common pool problems. The main methodological challenge handled concerns spatial interaction with discrete choice.
    Keywords: property taxation; fiscal competition; political fragmentation; Bayesian analysis; spatial autoregressive model
    JEL: C11 C21 D78 H71
    Date: 2005–03–01
  11. By: Sudip Ranjan Basu (Graduate Institute of International Studies HEI , Geneva)
    Abstract: This paper provides empirical evidence, from the study of sixteen major Indian states for the period 1980-2001, that under the economic reform process, the better institutional mechanism could actually help economies to grow faster with higher level of economic well-being. We estimate economic well-being index (by aggregating fifteen socio- economic variables, viz, education, infrastructure, technological progress, income, etc.) and also index of good governance (by aggregating thirteen variables indicating rule of law, government functioning, public services, press freedom, etc) by multivariate statistical measures. Panel regression showed that governance measures, and economic policy variables are crucial to explain differential level of development performance across states in India during the last two decades.
    Keywords: Growth, Well-being, Governance, Economic Reforms, Panel data, India
    JEL: B25 C23 O18 R11
    Date: 2005–09–08
  12. By: Tanya Araújo; Miguel St. Aubyn
    Abstract: Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital importance in the endogenous determination of the long run number of skilled workers and therefore of the growth prospects of an economy. Neighbourhood effects interact with the initial distribution of educated agents across space and play a key role in the long run stabilisation of the number of educated individuals. Our model implies a tendency towards segregation, with a possibly positive influence on growth, if team effects operate. The long run growth rate is also shown to depend on the rate of time preference. Initial circumstances are of vital importance for long run outcomes. A poor initial education endowment will imply a long run reduced number of skilled workers and a mediocre growth rate, so there no economic convergence tendency. On the contrary, poor societies will grow less, or will even fall into a poverty trap, and will diverge continuously from richer ones.
    Keywords: agent modelling; economic growth; education; human capital; neighbourhood effects; poverty trap.
    JEL: I20 J24 R12
  13. By: Marte Rønning (Centre for Economic Research and Department of Economics, Norwegian University of Science and Technology); Jon Hernes Fiva (Centre for Economic Research and Department of Economics, Norwegian University of Science and Technology)
    Abstract: Recent theoretical contributions have emphasized the favorable incentive effects of property taxation. The object of this paper is to confront these theories with Norwegian data on student performance. The institutional setting in Norway is well suited to analyzing the effects of property taxation because we can compare school districts with and without property taxation. In addition, we focus on an alternative incentive mechanism - competition between school districts. The empirical results indicate that students in school districts that levy residential property taxes perform better at the national examination than students in comparable school districts. Strategic interaction in school quality is present, but the magnitude of the interaction effect is modest.
    Keywords: Student achievement;efficiency;property taxation;competition;spatial auto-regressive model
    JEL: C21 H71 I22
    Date: 2004–08–01
  14. By: Sudip Ranjan Basu (Graduate Institute of International Studies HEI , Geneva)
    Abstract: The purpose of this paper is to explore the determinants of economic well-being. We provide a methodology to compute well-being by aggregating different socio-economic dimensions with factor analysis technique. We also estimate quality of good governance (using latent variable approach) and a financial decentralisation index. Panel data is employed to explore if better quality of institutional arrangements (of governance and more financial decentralisation) lead to better outcome in the economic well-being index. The evidence shows a strong positive link ( from using data of 16 major Indian states over four points of time (1970s to 1997-latest)).
    Keywords: Economic Well-being, Governance, Decentralisation, Panel data, India
    JEL: O1 C10 C23 R11
    Date: 2005–09–08
  15. By: Felici Roberto (BOLOGNA); Pagnini Marcello (BOLOGNA)
    Abstract: We examine the determinants of entry into Italian local banking markets during the period 1991-2002 and build a simple model in which the probability of branching in a new market depends on the features of both the local market and the potential entrant. Our econometric findings show that, all else being equal, banks are more likely to expand into those markets that are closest to their pre-entry locations. We also find that large banks are more able to cope with distance-related entry costs than small banks. Finally, we show that banks have become increasingly able to open branches in distant markets, probably due to the advent of information and communication technologies.
    Keywords: entry, barriers to entry, local banking markets, geographical distance.
    JEL: G21 L13 L22 R30
    Date: 2005–06
  16. By: Deodhar Satish Y
    Abstract: Apples have been grown in India for a century. At present apple production exceeds 1.4 million tonnes a year. Still, there are wide variations in the apple prices across the country. We test the price data for market integration using cointegration and error correction methodology. Delhi, the major wholesale market for apples, does not seem to influence other markets. Mumbai market does influence Bangalore market, although with about a two week lag. Absence of integration can be attributed to traders from southern region bypassing the Delhi wholesale market, cascading effect of trader margins at various distribution points, absence of competition to agricultural produce marketing committee markets, and, inadequacy of road and cool chain infrastructure.
    Date: 2005–08–12

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