nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒08‒12
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Housing supply and the interaction of regional population and employment By Wouter Vermeulen; Jos van Ommeren
  2. Convergence of Regions from 23 EU Member States By Hans-Friedrich Eckey; Thomas Döring; Matthias Türck
  3. Agglomeration, Diversity and Regional Growth By Braunerhjelm, Pontus; Borgman, Benny
  4. Local sustainable mobility management. Are Portuguese municipalities aware? By Catarina Aroso Monteiro; Aurora A.C. Teixeira
  5. Agglomeration and comparative advantage in vertically-related firms By José Pedro Pontes
  6. Regional Preferences for Hierarchies, Markets, and Networks: Exploring Social Capital Data for Germany By Lorenz Blume; Detlef Sack
  7. Regional Macroeconomic Outcomes Under Alternative Arrangements for the Financing of Urban Infrastructure By James Giesecke; Peter B. Dixon; Maureen T. Rimmer
  8. The evolution of inventor networks in the Silicon Valley and Boston regions By Lee Fleming; Koen Frenken
  9. Railroads and Local Economic Development: The United States in the 1850s By Michael R. Haines; Robert A. Margo

  1. By: Wouter Vermeulen; Jos van Ommeren
    Abstract: Housing markets may significantly affect the relationship between regional population and employment, if housing supply is not fully accommodative to demand. We analyse the relationships between housing supply, regional population and employment empirically in a three-equation dynamic model. Annual regional panel data are used for the Netherlands, where a strong tradition of spatial planning exists. We find that net internal migration is strongly determined by housing supply, whereas employment growth has no statistically significant impact. Growth of the housing stock is only moderately affected by population and employment, possibly as a result of restrictive spatial policies. Employment adjusts substantially towards a long-run relationship with the regional population. The analysis further indicates that labour markets drive this long-run adjustment more than local consumer demand. Hence, people follow houses rather than jobs, and jobs follow people in the long run.
    Keywords: housing supply; population-employment interaction; regional panel data
    JEL: R11 R23 J23
    Date: 2006–05
  2. By: Hans-Friedrich Eckey (Department of Economics, University of Kassel); Thomas Döring (Department of Economics, University of Kassel); Matthias Türck (Department of Economics, University of Kassel)
    Abstract: Convergence of EU regions is an often examined research question. However, there are no studies available which include in their analysis the New Member States from the former Eastern Bloc. We estimate several models of absolute convergence and of conditional convergence taking into account the different initial conditions of the regions from each country. First, we calculate convergence models with equal convergence rates of every region (stationary approaches). We prove a convergence process with nearly all models between 1995-2003. Only the spatial filtering approach in combination with the inclusion of country specific dummy variables shows a significant divergent development. Second, we calculate a geographically weighted regression (GWR) approach, which uses instationary regression coefficients. This model gives evidence for a convergence of most regions. However, some regions seem to move away from their steady state.
    Keywords: Regional Convergence, Spatial Econometrics, Europe
    JEL: C21 R11 R58
    Date: 2006–08
  3. By: Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Borgman, Benny (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The objective of this paper is to empirically examine the importance of the structure of agglomeration on productivity and growth. To accomplish this we will include the degree of co-agglomeration of similar industries as an explanatory variable in the empirical analysis, while simultaneously controlling for the degree of industry-specific agglomeration. To the best of our knowledge, the impact of co-agglomerated industries on productivity has not previously been investigated. The empirical analysis confirms a positive statistical relationship between interdependent and co-located industries on labour productivity.
    Keywords: Co-agglomeration; productivity; growth
    JEL: R11 R12
    Date: 2006–08–03
  4. By: Catarina Aroso Monteiro (INESC-Porto, Universidade do Porto); Aurora A.C. Teixeira (CEMPRE, Faculdade de Economia do Porto, Universidade do Porto)
    Abstract: Urban mobility has become an international problem and several countries have joined together in different consortia, signing international agreements and developing projects with a view to establishing new standards for current mobility levels and the development of the transport systems of the future. Although such worldwide increasing effort regarding sustainable mobility issue, namely by the most proactive European cities, it is not yet clear why measures towards sustainable mobility are not implemented by the generality of local authorities. The main goal of this paper is to identify the different sustainable mobility strategies and the corresponding perceptions by local public authorities. Such local governance aspects have yet to be dealt with appropriately and in a credible way. This shortcoming is particularly acute in Portugal where sustainable urban mobility management is still highly underdeveloped and very few studies have been dedicated to the matter. We provide new evidence on the perceptions and strategies of the Portuguese local public authorities regarding sustainable urban mobility management. Through a survey to all Portuguese municipalities we provide brand new evidence on their perceptions and strategies regarding sustainable urban mobility management. Estimates based on econometric regressions indicate that the most mobility-conscious municipalities are, on average, those that are richer, more cultural and educated, possess alternative transport parks and routes, have larger and more human capital intensive mobility departments. Results show that more than simply participating in urban regeneration programs it is necessary a more committed attitude, namely that municipalities’ urban plans explicitly mention mobility issues and indicators. All the models estimated clearly evidence a higher awareness of North municipalities towards sustainable mobility issues.
    Keywords: Zona Euro; Sustainability; mobility management; regions; human capital
    JEL: Q01 Q56 R11 J24
    Date: 2006–08
  5. By: José Pedro Pontes
    Abstract: This paper models, in game-theoretical terms, the location of two vertically-linked monopolistic firms in a spatial economy formed by a large, high labor cost country and a relatively small, low labor cost country. It is found that the decrease in transport costs shifts firms towards the low production cost country. This process takes two different forms: in labor-intensive industries it leads to spatial fragmentation; in industries with strong input-output relations, agglomerations are conserved, although they shift toward the low labor cost country.
    Keywords: Location; Intermediate goods; Agglomeration; Comparative advantage.
    JEL: F10 F12 R30
  6. By: Lorenz Blume (Department of Economics, University of Kassel); Detlef Sack (Political Science Department, University of Kassel)
    Abstract: Social capital is often defined as consisting of trust and post materialist values on the one hand, and social networks on the other. From an institutionalist point of view this concept is not convincing. Norms (i.e. informal institutions) can combine with different governance modes, not only with networks. The regional governance literature distinguishes between at least three governance modes, hierarchies, markets, and networks, each having its own advantages. This paper examines how regional preferences for these modes are related to trust and post materialist values. A principle component analysis of 48 social capital indicators for 74 West German regions shows that trust and post materialist values do not solely combine with networks but also with preferences for markets and hierarchies. A cluster analysis identifies two dominant types of regional social capital. These types are different from the well-known Italian patterns described by Robert Putnam in his seminal work. In the period 1995- 2002, annual economic growth was on average one percent higher in regions that have combined trust with strong preferences for markets and weak political networks than in opposite regions.
    Keywords: Markets, Hierarchies, Networks, Social Capital, Regional Governance
    Date: 2006–07
  7. By: James Giesecke; Peter B. Dixon; Maureen T. Rimmer
    Abstract: Many studies have found that the economic benefits from investment in urban infrastructure are substantial. In Australia, much of the responsibility for the provision of urban infrastructure rests with regional governments. Throughout the1990's many of these governments embarked on a program of fiscal restraint, seeking to restore financial positions weakened by exposure to failed government enterprises. A large proportion of this fiscal adjustment appears to have been borne by spending on public infrastructure. Today, regional government policy attention is again focussing on public infrastructure. In spite of the now robust fiscal positions of Australia's regional governments, they remain reluctant to finance infrastructure through debt, and raising the rates of existing taxes is perceived as politically unpopular. Instead, governments are exploring alternative financing instruments, such as developer charges and public-private partnerships. This paper uses a dynamic multi-regional CGE model (MMRF) to evaluate the regional macroeconomic consequences of four methods of financing a program of regional government infrastructure provision. The methods are developer charges, debt, payroll tax and residential rates. We demonstrate that the net gains from a program of urban infrastructure development are quite sensitive to the chosen financing means. The net gains tend to be greatest under rates and debt financing, and least under developer charges.
    Keywords: multi-regional CGE, dynamic CGE, infrastructure finance,regional policy
    JEL: D58 R13 R51 R53
    Date: 2005–01
  8. By: Lee Fleming; Koen Frenken
    Abstract: While networks are widely thought to enhance regional innovative capability, there exist few longitudinal studies of their formation and evolution over time. Based on an analysis of all patenting inventors in the U.S. from 1975 to 2002, we observe dramatic aggregation of the regional inventor network in Silicon Valley around 1989. Based on network statistics, we argue that the sudden rise of giant networks in Silicon Valley can be understood as a phase transition during which small isolated networks form one giant component. By contrast, such a transition in Boston occurred much later and much less dramatically. We do not find convincing evidence that this marked difference between the two regions is due to regional differences in the propensity to collaborate or the involvement of universities in patenting. Interviews with key network players suggest that contingent labor mobility between established firms in Silicon Valley, in particular resulting from IBM’s policy as a central player in patenting activity, promoted inter-organizational networking, leading to larger inventor networks.
    Keywords: evolutionary economic, inventor networks
    Date: 2006–07
  9. By: Michael R. Haines; Robert A. Margo
    Abstract: We use county and individual-level data from 1850 and 1860 to examine the economic impact of gaining access to a railroad. Previous studies have found that rail access was positively correlated with the value of agricultural land at a point in time, and have interpreted this correlation as evidence that rail access chiefly benefitted agricultural land owners in the manner predicted by the Hekscher-Ohlin or Von Theunen models. We use a difference-in-difference strategy, comparing changes in outcomes in counties that gained rail access in the 1850s to those that either gained access earlier or did not have access before the Civil War. Most of the estimated effects are small and the signs are not wholly consistent with either model, under the null hypothesis that agriculture was the chief beneficiary of rail access. For example, we find that rail access appears to have increased urbanization, raised the likelihood of participation in the service sector, decreased agricultural yields, and reduced the share of improved acreage in total land area, opposite to the patterns predicted by either the Heckscher-Ohlin or Von Theunen models.
    JEL: N51 N71
    Date: 2006–07

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