nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒05‒20
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. R&D lab location. Evidence from the French case By Corinne Autant-Bernard
  2. Etablissements publics de cooperation intercommunale et développement local en Basse-Normandie By Franck Bisson (CERESUR); Jean Bonnet (CREM – CNRS)
  3. European Urban Growth: now for some problems of spaceless and weightless econometrics By Stefano Magrini; Paul Cheshire
  4. Do Amenities and Diversity Encourage City Growth? A Link Through Skilled Labor By Steven Poelhekke
  5. Disproportionality Measures of Concentration, Specialization, and Polarization By Frank Bickenbach; Eckhardt Bode
  6. Analysis of Environmental Costs of Mobility due to Urban Sprawl - A Modelling Study on Italian Cities By Chiara M. Travisi; Roberto Camagni; Peter Nijkamp
  7. Regional Evidence on the Finance-Growth Nexus By Andrea Vaona
  8. Corredor centro-leste: sistemas de transporte de Minas Gerais na perspectivas dos eixos de desenvolvimento e integração By Ricardo S. Martins; Mauro Borges Lemos
  9. Technology and Trade - an analysis of technology specialization and export flows By Andersson, Martin; Ejermo, Olof
  10. Identifying Individual and Group Effects in the Presence of Sorting: A Neighborhood Effects Application By Patrick Bayer; Stephen L. Ross
  11. Dry law and homicides: evidence from the São Paulo metropolitan area By Ciro Biderman; João Manoel Pinho de Mello; Alexandre A Schneider
  12. Internet Retail Demand: Taxes, Geography, and Online-Offline Competition By Glenn Ellison; Sara Fisher Ellison
  13. Prices, Spatial Competition, and Heterogenous Producers: An Empirical Test By Chad Syverson
  14. Housing Prices in Australia - 1970 to 2003 By Peter Abelson; Demi Chung
  15. "The Social Capital of Regional Dynamics: A Policy Perspective" By Hans Westlund
  16. Impact de la fiscalité et des dépenses communales sur la localisation intra-métropolitaine des entreprises et des ménages : Bruxelles et sa périphérie By Didier Baudewyns; Benoït Bayenet; Robert Plasman; Catherine Van Den Steen

  1. By: Corinne Autant-Bernard (CREUSET (EA 3724) - Centre de Recherche Economique de l'Université de Saint Etienne - [Université Jean Monnet - Saint-Etienne])
    Abstract: The purpose of this paper is to empirically investigate how regional advantages and firms characteristics influence the location of R&D. Looking at 2024 decisions of R&D lab location in France, we implement an extended conditional logit with spatially lagged explanatory variables to evaluate the importance of each factor and to test the spatial dimension of knowledge spillovers. The results indicate that large market size, large amount of ideas, and low level of competition in the target region increases the probability of setting up R&D labs while the diffusion of knowledge across regions induces a significant spatial dependence
    Keywords: Economic geography; Location choice; Knowledge spillovers; Spatial dependence; géographie économique; externalités de connaissance; choix de localisation; dépendance spatiale
    Date: 2006–04–21
  2. By: Franck Bisson (CERESUR); Jean Bonnet (CREM – CNRS)
    Abstract: We investigate in this paper local development at the level of the french local entities called EPCI (Etablissement Public de Coopération Intercommunale), which gather different city councils of the French region Basse-Normandie. Sets of socio-economic and fiscal variables allow us to characterize with data analysis methods these EPCI. We show that the development of these entities since 1990 may be divided up thanks to a hierarchical classification into rural EPCI versus urban EPCI with, in the case of the Basse-Normandie Region, the specific class of touristic EPCI. In addition we show that the distance from the main urban poles is a disadvantage for the development of a large part of the south rural areas of the Manche Department and some contiguous EPCI from the southwest of the Orne Department. The growth at a sub regional level appears mainly driven by urbanisation and its induced effects that redistribute the growth in the rural neighbourhood.
    Keywords: local development, french cities, French region, data analysis methods.
    JEL: R1 C40 H70
    Date: 2006
  3. By: Stefano Magrini (Department of Economics, University Of Venice Cà Foscari); Paul Cheshire (Department of Geography and Environment, London School of Economics)
    Abstract: This paper investigates growth differences in the urban system of the EU12 for a data set relating to Functional Urban Regions comparing the results of ‘artisanal’ methods of model selection with those obtained using general to specific model selection with PcGets. The artisanal approach tests hypotheses relating to the role of human capital, EU integration and fragmentation of urban government. The paper also explores issues of spatial dependence and mechanisms of spatial interaction. Using PcGets as suggested by Hendry and Krolzig (2004) to optimise model selection we find that while PcGets provides a powerful tool for model selection when applied to cross sectional data, caution is necessary to ensure that variables relating to spatial adjustment processes are included and spatial dependence is avoided. More generally, not only do the results provide consistent estimates of parameters but they also support relevant theoretical insights. Finally careful testing for spatial dependence reveals that national borders are still significant barriers to adjustment within the EU.
    Keywords: Growth, Cities, Spatial Dependence, Local Public Goods, Human Capital; EU Integration
    JEL: H41 H73 O18 R11 R50
    Date: 2006
  4. By: Steven Poelhekke
    Abstract: The share of skilled workers in urban populations has steadily increased since 1970 in US metropolitan areas, but more in some cities than in others. A higher concentration of skills is a sought after asset for cities as it affects population growth positively, also when the initial share is instrumented for by using land-grant colleges. However, skilled cities may attract more skilled workers, but not because they are more skilled initially: increasing returns are rejected when controlling for fixed effects and bias due to inclusion of a lagged dependent variable. Several amenities such as a low-skilled personal service sector do affect the concentration of skills positively. Although firms seem to benefit from externalities, there is no convincing case for an effect on the concentration of college graduates in a city.
    Keywords: urban and city growth, human capital, skills, spillovers, externalities, concentration, diversity, amenities
    JEL: J24 R1 R30 O11 O18
    Date: 2006
  5. By: Frank Bickenbach; Eckhardt Bode
    Abstract: The paper extends the methodological toolbox of measures of industrial concentration and regional specialization. First, a taxonomy is proposed which gives rise to a modular construction system for disproportionality measures based on three characteristic features: the projection function, the reference distribution, and the weighting scheme. The taxonomy helps reduce the mismatch between research purpose, data and statistical measure which has been one of the major obstacles to reliable inferences in the literature. Second, the taxonomy is extended (i) to measures of polarization which evaluate specialization and concentration simultaneously and allow for a nested analysis at different spatial and industrial scales, and (ii) to spatial concentration measures which deal with the checkerboard problem and MAUP by taking into account information from neighboring regions.
    Keywords: statistical measures, regional specialization, industrial concentration, economic polarization, geographical weighting
    JEL: C43 F15 R12
    Date: 2006–05
  6. By: Chiara M. Travisi (DIG, Politecnico di Milano, and Fondazione Eni Enrico Mattei); Roberto Camagni (DIG, Politecnico di Milano, Milano, Italy); Peter Nijkamp (Vrije Universiteit Amsterdam, The Netherlands)
    Abstract: A sound empirical and quantitative analysis on the relationship between different patterns of urban expansion and the environmental or social costs of mobility is rare, and the few studies available provide at best a qualitative discussion of these issues. Some recent tentative studies on the metropolitan area of Milan have empirically explored whether different patterns of urban expansion generate different levels of land use and heterogeneous impacts of urban mobility. The results confirmed the expectation that a higher environmental impact of mobility may result from more extensive and sprawling urban development, from recent urbanisation processes and from residential specialisation. The present paper extends the previous empirical analysis to seven major Italian metropolitan areas (namely, Bari, Florence, Naples, Padua, Perugia, Potenza and Turin) in order to corroborate the previous tentative results for the Italian context. The novelty of the prese! nt paper is threefold. First, we are interested in exploring the changes that have occurred due to the increased intensity of mobility across a ten-year period, from 1981 to 1991, which corresponds to the Italian economic boom years. Secondly, using an econometric analysis of cross-section data, we consider several metropolitan areas simultaneously, and are therefore able to explore whether there are significant differences in the way the model explains variations in the mobility impact across various Italian urban areas. And finally, we offer a structural interpretation of the causal chain in the explanation of the mobility impact intensity by using Causal Path Analysis as a statistical test framework.
    Keywords: urban mobility; sprawl; environmental costs; self-containment capacity; causal path analysis
    JEL: Q56 R14 R41
    Date: 2006–05–01
  7. By: Andrea Vaona (Dipartimento di Scienze economiche (Università di Verona))
    Abstract: The Finance-Growth Nexus is a classical source of debate among economists. This contribution o¤ers regional evidence on this issue in order to see if it can meet the data within a 140 years old economic union –Italy -, in the ideal context for its main competitor - New Economic Geography - and in order to avoid pooling between developed and developing countries. The results for this application support the view that …nance leads growth, reject its possible endogeneity and shows its robustness even in presence of spatial unobserved heterogeneity.
    Keywords: Finance, Growth, Regions
    JEL: O18 O16 C31
    Date: 2005–12
  8. By: Ricardo S. Martins (FACE-UFMG); Mauro Borges Lemos (Cedeplar-UFMG)
    Abstract: The general purpose of this paper was to investigate the particular situation of the state of Minas Gerais, in the contexto of the new national logistic perspective, relatives to selected investments in the systems of transportation in areas of the Brazilian cerrado. The nonlinear model allocated flows of soybean among producing regions and ports, considering minimized cost of transport routes, considering some modals. In the case, the Port of Vitória (Center-East Corridor) was not sensible to the implantation of the transport systems, therefore it only reacted to the additions in the exported volumes. This implies the urgency of attention to the effective competition with the São Paulo (Port of Santos), that had expanded its area of influence for regions that could be being taken care of for the Center-East Corridor and the necessity to approach the strategical character of the investments in the transport systems (improvements in the highways, expansion of the railroad), as well as one better knowledge of the requeriments of the shippers, that can have significant regional impacts in the intraregional integration with the Triângulo Mineiro and areas under influence of the São Francisco Waterway.
    JEL: R53 R58 Q13
    Date: 2006–05
  9. By: Andersson, Martin (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Ejermo, Olof (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper examines how technology specialization, measured by citations-weighted patents, affects trade flows. The paper analyzes (i) the relationship between technology specialization and export specialization across regions and (ii) how the technology specialization of origin and destination affect the size and structure of link-specific export flows. We find that the export specialization of a region typically corresponds to the region’s technology specialization, which supports the view that comparative advantages can be created by investments in technology and knowledge. Export flows from regions to destination countries with similar technology specialization as the origin regions consist of commodities of higher quality in the specific technology, as indicated by higher prices. Highly specialized regions export more and charge higher prices. The results of the paper suggest that an understanding of trade ultimately requires an understanding of the spatial pattern of investments in (and creation of) technology and knowledge, as such investments shape export specialization patterns and the corresponding composition of export flows between locations across space.
    Keywords: exports; technology; knowledge; specialization; quality; patents
    JEL: F14 O33 O52 R12
    Date: 2006–05–11
  10. By: Patrick Bayer; Stephen L. Ross
    Abstract: Researchers have long recognized that the non-random sorting of individuals into groups generates correlation between individual and group attributes that is likely to bias naïve estimates of both individual and group effects. This paper proposes a non-parametric strategy for identifying these effects in a model that allows for both individual and group unobservables, applying this strategy to the estimation of neighborhood effects on labor market outcomes. The first part of this strategy is guided by a robust feature of the equilibrium in the canonical vertical sorting model of Epple and Platt (1998), that there is a monotonic relationship between neighborhood housing prices and neighborhood quality. This implies that under certain conditions a non-parametric function of neighborhood housing prices serves as a suitable control function for the neighborhood unobservable in the labor market outcome regression. The second part of the proposed strategy uses aggregation to develop suitable instruments for both exogenous and endogenous group attributes. Instrumenting for each individual’s observed neighborhood attributes with the average neighborhood attributes of a set of observationally identical individuals eliminates the portion of the variation in neighborhood attributes due to sorting on unobserved individual attributes. The neighborhood effects application is based on confidential microdata from the 1990 Decennial Census for the Boston MSA. The results imply that the direct effects of geographic proximity to jobs, neighborhood poverty rates, and average neighborhood education are substantially larger than the conditional correlations identified using OLS, although the net effect of neighborhood quality on labor market outcomes remains small. These findings are robust across a wide variety of specifications and robustness checks.
    JEL: J41 R14
    Date: 2006–05
  11. By: Ciro Biderman (Escola de Economia de São Paulo, Fundação Getúlio Vargas.); João Manoel Pinho de Mello (Department of Economics PUC-Rio); Alexandre A Schneider (Secretary of Education,Mayorship of São Paulo.)
    Abstract: Over the last 15 years, several Latin American cities have adopted dry laws, which restrain the sale of alcohol in bars and restaurants during specific hours of the week. Bogotá, in 1991, was the first. Several more have followed suit, or are likely to do so in the near future. Policy makers and the general press have argued that these measures reduce crime. In this paper, we use a particular feature of the adoption of laws in the São Paulo Metropolitan Area (SPMA) to estimate the effect of dry laws on the ultimate form of violent crime: murder. Between March 2001 and August 2004, 16 out of the 39 municipalities of the SPMA have adopted, at different dates, dry laws. By comparing the dynamics of homicide between adopting and non-adopting cities, we estimate that dry laws reduce homicides by at least 10%, with an even higher effect in high crime cities. Results are robust to inclusion of a large set of controls, to propensity score matching, to outliers, and to correction possible spillover effects from adopting to non-adopting cities.
    Keywords: Dry Law, Alcohol, Crime, Difference-in-Difference
    Date: 2006–05
  12. By: Glenn Ellison; Sara Fisher Ellison
    Abstract: Data on sales of memory modules are used to explore several aspects of e-retail demand. There is a strong relationship between e-retail sales to a given state and sales tax rates that apply to purchases from online retailers. This suggests that there is substantial substitution between online and online retail, and tax avoidance may be an important contributor to e-retail activity. Geography matters in two ways: we find some evidence that consumers prefer purchasing from firms in nearby states to benefit from faster shipping times as well as evidence of a separate preference for buying from in-state firms. Consumers appear fairly rational in some ways, but boundedly rational in others.
    JEL: L8 D1 H2
    Date: 2006–05
  13. By: Chad Syverson
    Abstract: In markets where spatial competition is important, many models predict that average prices are lower in denser markets (i.e., those with more producers per unit area). Homogeneous-producer models attribute this effect solely to lower optimal markups. However, when producers instead differ in their production costs, a second mechanism also acts to lower equilibrium prices: competition-driven selection on costs. Consumers’ greater substitution possibilities in denser markets make it more difficult for high-cost firms to profitably operate, truncating the equilibrium cost (and price) distributions from above. This selection process can be empirically distinguished from the homogenous-producer case because it implies that not only do average prices fall as density rises, but that upper-bound prices and price dispersion should also decline as well. I find empirical support for this process using a rich set of price data from U.S. readymixed concrete plants. Features of the industry offer an arguably exogenous source of producer density variation with which to identify these effects. I also show that the findings do not simply result from lower factor prices in dense markets, but rather because dense-market producers have low costs because they are more efficient.
    JEL: L0 L1 D4 L6
    Date: 2006–05
  14. By: Peter Abelson (Department of Economics, Macquarie University); Demi Chung (Department of Economics, Macquarie University)
    Abstract: There have been few reliable published data for housing prices in Australia (as in many other countries). In this paper we attempt to provide an authoritative account of prices for houses and apartments (units) in Australia from 1970 to 2003. Where possible we draw directly on data from land title offices or on studies that draw on these data. The first part of the paper describes the main data sources. The main body of the paper provides best estimates of median house and unit prices and real price indices in the capital cities and in the rest of Australia. We also estimate how improvements in housing quality have influenced real house prices over time. In summary we find that there have been strong national trends, especially in recent years, and that house and unit prices have moved in similar ways. There were significant housing price booms from 1971 to 1974, from 1979 to 1981, from 1987 to 1989, and from 1996 through to 2003. After each of the first three booms, real prices tended to fall. However, in the long run real price rises outstripped falls. Consequently, real house prices rose by about 180 per cent between 1970 and 2003. Allowing for hous ing improvements, real prices rose by more like about 100 per cent over this period. However, both estimates give an exaggerated view of real price increases if, as we expect, there is a real house price downturn post 2003.
    JEL: R31
    Date: 2004–09
  15. By: Hans Westlund (National Institute for Working Life)
    Abstract: This paper deals with social capital as an extra-market externality, and its role for innovations and growth. It analyses the changes of innovation activity over time, from early industrialism to the global knowledge economy, how the relations between the actors of today's innovation systems have developed and the role of social networks for innovations. The different kinds of networks built by the three constructers of social networks: the individual, the organizations and the (public and civic) society are discussed. The role of public policy in building social capital for innovations and growth is analyzed.
    Date: 2006–05
  16. By: Didier Baudewyns (DULBEA, Université libre de Bruxelles, Brussels); Benoït Bayenet (DULBEA, Université libre de Bruxelles, Brussels); Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels); Catherine Van Den Steen (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: Ce rapport de recherche : (1) analyse l’évolution récente des finances publiques locales en Région bruxelloise (ressources fiscales et non fiscales, régionales, communales, etc.) ; (2) simule les effets d’une baisse de la fiscalité communale sur les budgets locaux (« pertes à compenser » par la Région) ; (3) teste économétriquement, sur 52 communes de l’agglomération étendue de Bruxelles, les effets de variations de l’impôt foncier local (précompte immobilier) et des additionnels communaux à l’impôt des personnes physiques, sur les localisations de l’emploi et des résidents. Ce test inclut la contrepartie des dépenses publiques locales comme variable de contrôle. Les résultats non significatifs obtenus pour les variables de taxation pour la période 1991-2001 suggèrent que les agents économiques, une fois qu’ils ont décidé de s’installer en zone métropolitaine bruxelloise, ne fonderaient pas leurs décisions de localisation précise intra-zone sur le critère de la fiscalité locale.
    Keywords: Bruxelles, fiscalité locale, localisation.
    JEL: H71 H73 R30
    Date: 2006–05

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