nep-geo New Economics Papers
on Economic Geography
Issue of 2006‒11‒18
nineteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Description and Spatial Analysis of Employment Change in New Zealand Regions 1986-2001 By Jacques Poot; Bill Cochrane; Sandra Baxendine
  2. Exploratory Spatial Data Analysis and Spatial Econometric Modeling for the study of Regional Productivity Differentials in European Union, from 1975 to 2000 By Yiannis Kamarianakis; Julie Le Gallo
  3. Regional Specialization And Location Of Industrial Activity In Turkey By Ayten Aysen Kaya
  4. As cidades e a classe criativa no Brasil: diferenças espaciais na distribuição de indivíduos qualificados By André Braz Golgher
  5. The Balassa Index Meets the Dissimilarity Theil Index: a Decomposition Methodology for Location Studies By Eleonora CUTRINI
  6. Economic convergence vs. socio-economic convergence in space By Cuffaro , Miranda; Cracolici, Maria Francesca; Nijkamp, Peter
  7. High Point Industries of Aegean Region of Turkey By Nese Kumral; Çagaçan Deger
  8. Export-Led Growth and Geographic Distribution of the Poultry Meat Industry in Brazil By Ueki, Yasushi
  9. On Joint Modelling and Testing for Local and Global Spatial Externalities By Zhenlin Yang
  10. A Spatio-Temporal Model of House Prices in the US By Sean Holly; M. Hashem Pesaran; Takashi Yamagata
  11. Theory of a Flowchart Approach to Industrial Cluster Policy By Kuchiki, Akifumi
  12. Analyse spatiale du pouvoir de vote : application au cas de l'intercommunalité dans le département du Val d'Oise By Fabrice Barthélémy; Mathieu Martin
  13. Tiebout's Tale in Spatial Economies: Entrepreneurship, Self-Selection, and Efficiency By Hideo Konishi
  14. A credit contagion model for loan portfolios in a network of firms with spatial interaction By Diana Barro; Antonella Basso
  15. Agglomeration Economies in Japan: Technical Efficiency, Growth and Unemployment By Mitra, Arup; Sato, Hajime
  16. Social Interaction and Urban Sprawl By Jan K. Brueckner; Ann G. Largey
  17. Local Market Scale and the Pattern of Job Changes Among Young Men By Christopher H. Wheeler
  18. Can the German Electricity Market Benefit from the EU Enlargement? : Results of Scenario Calculations Using the EMELIE Model By Manfred Horn; Claudia Kemfert; Vitaly Kalashnikov
  19. Bringing Non-governmental Actors into the Policymaking Process: The Case of Local Development Policy in Thailand By Shigetomi, Shinichi

  1. By: Jacques Poot (University of Waikato); Bill Cochrane (University of Waikato); Sandra Baxendine (Waikato District Health Board)
    Abstract: Over the last two decades New Zealand has undergone fundamental economic restructuring, and phases of slow and rapid growth, which have resulted in some dramatic changes in the regional economies. This paper provides a detailed multiperiod shift-share analysis over three intercensal periods between 1986 and 2001 on changes in regional employment outcomes at two levels of spatial disaggregation: 29 Administrative Regions (ARs), based on Regional Council areas, and 58 Labour Market Areas (LMAs) that have economically meaningful (commuting determined) boundaries. The contributions to employment outcomes of national trends, sectoral composition within regions, structural change, and local conditions are identified. A four-category disaggregation of regional employment into sex, age, occupation industry is also undertaken. The results show a dichotomy between metropolitan and non-metropolitan areas, but also several distinct clusters among the latter. Regional competitive advantage is clearly linked with net inward migration. There is also evidence of significantly positive spatial autocorrelation in the competitive effect. Local indicators of spatial association help to identify regions that stand out in terms of being surrounded by similar regions, or by regions that are just the opposite, in terms of the competitive effect. Interestingly, regional population growth precedes the competitive component of employment growth rather than just being a symptom of it.
    Keywords: Shift-Share Analysis, Cluster Analysis, Regional Competitiveness, Migration, Spatial Correlation
    JEL: R11 R12
    Date: 2005–11–21
  2. By: Yiannis Kamarianakis (Regional Analysis Division, Institute of Applied and Computational Mathematics, Foundation for Research and Technology-Hellas, Greece); Julie Le Gallo (, France)
    Abstract: Economic processes are often characterized by spatial autocorrelation: the coincidence of value similarity to locational similarity. As a consequence of spatial autocorrelation, analysts observe spatial regional clusters. Recent advances in the areas of spatial statistics/econometrics offer tools for the investigation of the aforementioned issues. Following the exploratory spatial data analysis of Le Gallo and Ertur (2003) on European regional per capita GDP we use such tools to investigate the evolution of regional productivity disparities in the European Union and the extent to which the existing interregional inequalities in productivity can be attributed to differences in sectoral composition between regions and/or to uniform productivity gaps across sectors. At the exploratory stage we observe a core-periphery pattern similar to the one observed in the study of regional GDP. At the modeling stage the inclusion of spatial dependencies produces estimations significantly different from the ones presented at previous studies.
    Keywords: spatial autocorrelation, exploratory spatial data analysis, European regions, productivity dispariti
  3. By: Ayten Aysen Kaya (Department of Economics, Ege University)
    Abstract: The aim of this study is to determine where the Turkish manufacturing industry tend to concentrate and by finding out the direction of this tendency to provide a ground in order to contribute to the realizations of regional policies of Turkey. Turkey’s regions are examined within the context of regional specialization and concentration. Regional specialization and concentration are measured by the Location Quotient Index (LQ) that can be computed at the regional level (NUTS 2). There are 26 NUTS 2 level in Turkey. Using employment data at 4 Digit ISIC Rev.3 codes, regional high point industries is identified, where industries account for at least over 0.2 percent of the regional workforce and which are at least 25 % more concentrated than average (LQ> 1.25). Consequently, changes in LQ are measured for high point manufacturing industries. These high point industries are then grouped to form the basis of a cluster. Focusing on industry clusters that gives all regions of Turkey a comparative advantage will help to create sustainable regional development policies.
    Keywords: regional specialization, regional concentration, industrial cluster, Location Quotient Index,
    JEL: R11 R12
    Date: 2006–11
  4. By: André Braz Golgher (Cedeplar-UFMG)
    Abstract: The theoretical foundation for this text is the one presented by Florida (2002a, 2002b, 2005). He discusses the importance of a vibrant society and also of a highly diversified population for the attraction of talented and creative people. This attraction would promote a concentration of this type of person in some specific localities and this would be decisive for the development of cities and regions. Based on this discussion, an empirical analysis about the distribution of qualified population and some aspects that influence this distribution was done for Brazil. In order to do so, some indicators were built for different geographical areas and periods. Firstly, the text discusses the temporal tendencies for states in Brazil in the period between 1986 and 2004. A positive evolution was verified for all the qualification index, and a tendency of homogenization was observed. Then, municipal data for the year of 2000 was presented. Some municipalities had the highest values for most of the indicators, such as: São Caetano do Sul (SP), Niterói (RJ) and Florianópolis (SC). After this, given the importance of intraurban interchanges in Brazilian metropolitan regions, it was presented a study emphasizing these areas. Two metropolitan regions had the best indicators and were classified as in areas: Florianópolis (SC) and Rio de Janeiro (RJ). In the last part of the text, the intraurban heterogeneity of the three more populous metropolitan regions in Brazil, RMSP, RMRJ and RMBH, was studied and a high degree of urban polarization was verified.
    Keywords: Human capital; internal migration; regional development; Brazil
    JEL: J24 O15 R10
    Date: 2006–10
  5. By: Eleonora CUTRINI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: It is well known that the broad concept of localisation has two connotations, namely, regional specialisation and industrial concentration. The main purpose of this paper is to introduce an entropy index of overall localisation suitable to conceptualise specialisation and concentration as the two sides of the same medal in a nested geographical perspective. The system of dissimilarity entropy measures is potentially applicable to the assessment of the spatial distribution of several economic phenomena when a twofold geographical level of analysis is considered. In the specific case, the decomposition provides an accurate method to quantify the cross-country divergence in localisation from the agglomeration within countries.
    Keywords: concentration, dissimilarity entropy index, localisation, specialisation, within-between country decomposition
    JEL: C43 L16 O18 R12
    Date: 2006–11
  6. By: Cuffaro , Miranda (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Cracolici, Maria Francesca; Nijkamp, Peter
    Abstract: This paper aims to present a new analysis framework for assessing disparities among regions (or countries). It combines both economic and social variables, where the economic attributes refer in particular to marked differences in consumption variables. This analysis is also appealing for spatial convergence analyses over time. In our paper, both economic and social variables are included as the basis of a logical operational scheme that is suitable for comparative research. In this scheme the economic aspects of living standards are represented by different categories of consumption expenditures, while the social aspects are represented by indicators of health, education, labour market conditions, etc. The analysis of a region’s performance cannot be limited exclusively to either economic or social aspects, and hence our study aims to combine in an integrated framework both material (i.e., economic) and immaterial (i.e., social) aspects of society. In a time perspective, by introducing these concepts in the analysis of differences among regions, we may then be able to distinguish the concept of convergence into economic convergence and social convergence. Our analysis is illustrated by means of an empirical application to Italian data.
    Keywords: Italy; Regional disparities; Convergence
    JEL: R12
    Date: 2006
  7. By: Nese Kumral; Çagaçan Deger (Department of Economics, Ege University)
    Abstract: As theoretical studies on industrial clusters have progressed, many researchers have focused on identifying clusters in various regions in different national economies. The emphasis has generally been to identify potential clusters, upon which a policy of sustainable development can be formulated. This paper aims to provide a basis to enable the identification of the regional clusters in Turkey. Using manufacturing industry data for years 1995 and 2000, regional high points of the Aegean Region have been identified by calculating shares of regional employment and concentration ratio. Then the identified industries have been focused upon to provide an initial framework to identify Aegean Region’s clusters.
    JEL: O18 L60 R12
    Date: 2006–06
  8. By: Ueki, Yasushi
    Abstract: This paper includes an examination of the sustainability of recent high growth in the poultry meat industry in Brazil. In addition, an assessment is made of the impact of increased production of poultry meat products on the development of local industries. Comparative studies of leading companies in the United States, Mexico, and Brazil reveal competitive advantages in the low costs of feedstuff and labor as well as disadvantages in the scale of business and management efficiency in the Brazilian poultry sector. Increases in domestic and foreign demand for Brazilian poultry meat have promoted development of the Brazilian poultry sector in local areas. The formation of industrial clusters is observed using regional data related to the location of slaughterhouses and the number of chickens farmed. Statistical analyses support observations made in this paper.
    Keywords: Brazil, Poultry meat, Regional development, Clusters, ・
    JEL: C19 N56 O13 R12
    Date: 2006–08
  9. By: Zhenlin Yang (School of Economics and Social Sciences, Singapore Management University)
    Abstract: This paper concerns the joint modeling, estimation and testing for local and global spatial externalities. Spatial externalities have become in recent years a standard notion of economic research activities in relation to social interactions, spatial spillovers and dependence, etc., and have received an increasing attention by econometricians and applied researchers. While conceptually the principle underlying the spatial dependence is straightforward, the precise way in which this dependence should be included in a regression model is complex. Following the taxonomy of Anselin (2003, International Regional Science Review 26, 153-166), a general model is proposed, which takes into account jointly local and global externalities in both modelled and unmodelled effects. The proposed model encompasses all the models discussed in Anselin (2003). Robust methods of estimation and testing are developed based on Gaussian quasi-likelihood. Large and small sample properties of the proposed methods are investigated.
    Keywords: Asymptotic property, Finite sample property, Quasi-likelihood, Spatial regression models, Robustness, Tests of spatial externalities.
    JEL: C1 C2 C5
    Date: 2006–10
  10. By: Sean Holly; M. Hashem Pesaran; Takashi Yamagata
    Abstract: The purpose of this paper is to apply recent advances in the econometrics of panel data to a problem that has a clear spatial dimension. We model the dynamic adjustment of real house prices using data at the level of US States. In the last decade, in most OECD countries there has been a significant rise in real house prices. This attracted the attention of many international organisations and central banks. In this paper we consider interactions between housing markets by examining the extent to which real house prices at the State level are driven by fundamentals such as real income, as well as by common shocks, and determine the speed of adjustment of house prices to macroeconomic and local disturbances. We take explicit account of both cross sectional dependence and heterogeneity. This allows us to find a cointegrating relationship between house prices and incomes and to identify a small role for real interest rates. Using this model we then examine the role of spatial factors, in particular the effect of contiguous states by use of a weighting matrix. We are able to identify a significant spatial effect, even after controlling for State specific real incomes, and allowing for a number of unobserved common factors.
    Keywords: house price, cross sectional dependence, spatial dependence
    JEL: C21 C23
    Date: 2006
  11. By: Kuchiki, Akifumi
    Abstract: A flowchart approach to industrial cluster policy emphasizes the importance ofthe ordering of policy measures. The flow of policy implementation is to establish an industrial zone, to invite an anchor company, and to promote its related companies to invest in the industrial zone. This article delineated "a flowchart approach to industrial cluster policy" by proposing sufficient conditions for forming industrial clusters typical in the manufacturing industry in Asia to enhance regional economic growth. The typical industrial cluster policy was theorized by defining an industrial zone as "quasi-public goods", and it was shown that the policy enhances economic growth under a production function of "increasing returns to scale" of an anchor company. Critical amounts of the production of "scale economies" that are used by the related companies to decide whether or not to invest in clusters were also shown.
    Keywords: Flowchart approach, industrial cluster policy, sufficient conditions, regional economic growth, quasi-public goods, increasing returns to scale, scale economies, Industrial policy, Economics, Industrial estates, Economic development, Economic growth
    JEL: O14 R12 R58
    Date: 2006–10
  12. By: Fabrice Barthélémy (Université de Cergy-Pontoise (Théma)); Mathieu Martin (Université de Cergy-Pontoise (Théma))
    Abstract: The spatial analysis of power indices is commonly used in the literature to study the importance of ideological criteria. Our purpose is to show, through the example of some french groupings of local cities, the importance of the geographical situation of the players when considering power analysis. We show that the classical measure of power (with the Shapley-Shubik index of power) may be sometimes radically different if the geographical aspect of the player is taken into account (with the Shapley-Owen index of power).
    Keywords: Shapley-Shubik index of power, french grouping of local cities, spatial analysis
    JEL: C7 D7 R5
    Date: 2006
  13. By: Hideo Konishi (Boston College)
    Abstract: This paper establishes the existence and efficiency of equilibrium in a local public goods economy with spatial structures by formalizing Hamilton's (1975 Urban Studies) elaboration of Tiebout's (1956 JPE) tale. We use a well-known equilibrium concept from Rothschild and Stiglitz (1976, QJE) in a market with asymmetric information, and show that Hamilton's zoning policy plays an essential role in proving existence and efficiency of equilibrium. We use an idealized large economy following Ellickson, Grodal, Scotchmer and Zame (1999, Econometrica) and Allouch, Conley and Wooders (2004). Our theorem is directly applicable to the existence and efficiency of a discrete approximation of mono- or multi-centric city equilibrium in urban economics with commuting time costs even if we allow existence of multiple qualities of (collective) residences, when externalities due to traffic congestion are not present.
    JEL: C62 D60 H41 H70 H73 R52
    Date: 2006–11–10
  14. By: Diana Barro (Department of Applied Mathematics, University of Venice); Antonella Basso (Department of Applied Mathematics, University of Venice)
    Abstract: This contribution studies the effects of credit contagion on the credit risk of a portfolio of bank loans. To this aim we introduce a model that takes into account the counterparty risk in a network of interdependent firms that describes the presence of business relations among different firms. The location of the firms is simulated with probabilities computed using an entropy spatial interaction model. By means of a wide simulation analysis we use the model proposed to study the effects of default contagion on the loss distribution of a portfolio.
    Keywords: credit risk, bank loan portfolios, contagion models, entropy spatial models
    JEL: G33 G21 C15
    Date: 2006
  15. By: Mitra, Arup; Sato, Hajime
    Abstract: This paper examines if the effects of agglomeration economies get manifested in technical efficiency and generate faster economic growth and higher (lower) levels of employment (unemployment). Using the prefecture level data for each of the two-digit groups of industries in Japan, the paper estimates region-specific technical efficiency index based on the stochastic frontier production function framework. The results of the factor analysis show that in most of the industry-groups (with a few exceptions) efficiency has a positive association with external scale variable(s). Though the relationship is not seen to be very strong, it would be equally erroneous to ignore the effect of agglomeration economies on efficiency. In the case of some of the light goods industries the agglomeration effect is relatively stronger. Further, economic growth varies positively with external scale variable(s) and unemployment rate tends to fall with respect to growth and concentration. All this tends to suggest that measures against industrial concentration may be counter-productive, particularly in the context of globalisation when countries are in dire need of raising productivity.
    Keywords: Agglomeration economies, Technical efficiency, Economic conditions, Economic growth, Manufacturing industries, Unemployment, Japan
    JEL: J60 L60 R12
    Date: 2006–02
  16. By: Jan K. Brueckner; Ann G. Largey
    Abstract: Various authors, most notably Putnam (2000), have argued that low-density living reduces social capital and thus social interaction, and this argument has been used to buttress criticisms of urban sprawl. If low densities in fact reduce social interaction, then an externality arises, validating Putnam’s critique. In choosing their own lot sizes, consumers would fail to consider the loss of interaction benefits for their neighbors when lot size is increased. Lot sizes would then be inefficiently large, and cities excessively spread out. The paper tests the premise of this argument (the existence of a positive link between interaction and density) using data from the Social Capital Benchmark Survey. In the empirical work, social interaction measures for individual survey respondents are regressed on census-tract density and a host of household characteristics, using an instrumental-variable approach to control for the potential endogeneity of density.
    JEL: J11 R10
    Date: 2006
  17. By: Christopher H. Wheeler (Federal Reserve Bank of St. Louis)
    Abstract: In finding a career, workers tend to make numerous job changes, with the majority of "complex" changes (i.e. those involving changes of industry) occurring relatively early in their working lives. This pattern suggests that workers tend to experiment with different types of work before settling on the one they like best. Of course, since the extent of economic diversity differs substantially across local labor markets in the U.S. (e.g. counties and cities), this career search process may exhibit important differences depending on the size of a worker's local market. This paper explores this issue using a sample of young male workers drawn from the National Longitudinal Survey of Youth 1979 Cohort. The results uncover two rather striking patterns. First, the likelihood that a worker changes industries rises with the size and diversity of his local labor market when considering the first job change he makes. Second, however, this association gradually decreases as a worker makes greater numbers of job changes. By the time he makes his fourth change, the likelihood of changing industries significantly decreases with the scale and diversity of the local market. Both results are consistent with the idea that cities play an important role in the job matching process.
    Keywords: Job Search, Labor Market Matching, Agglomeration
    JEL: J24 R23
    Date: 2006–09
  18. By: Manfred Horn; Claudia Kemfert; Vitaly Kalashnikov
    Abstract: This paper investigates the impacts of the eastern enlargement of the European Union in 2004 and the liberalisation of European electricity markets on Germanys electricity exchange with neighbouring countries and on electricity prices. Thus, electricity imports from Czech Republic have increased sharply in the last few years and have dampened German wholesale prices for electricity. In this paper the EMELIE simulation model, a game theoretic model for the European electricity market, is applied to analyse possible long-term effects of these changes. In the model calculations it is assumed that competition will prevail on the European electricity market in 2030, as far as possible with the existing transmission capacities. Primary energy prices are assumed to increase moderately from 2004 to 2030 (30 % for gas and 15 % for hard coal), and the price for CO2-certificats is assumed to remain high (€25/t). It is further assumed that Germany sticks to the aim to shut down nuclear power stations [...]
    Keywords: Solow model, regional convergence, spatial lags, spatial filtering
    Date: 2006
  19. By: Shigetomi, Shinichi
    Abstract: During the past two decades in Thailand, non-governmental actors, such as NGOs, intellectuals, and people's organizations, have found widening opportunities to participate in policy formation and in the implementation of local development. The government has facilitated the formation of civil society forums, in the expectation of influencing local-level governance. The last two national five-year development plans were formulated after taking into account the voices of people in the provinces. Even though they may seem petty, some state funds are now transmitted through non-governmental institutions for policy implementation at the grassroots level. These changes have their origin in a reformation of rural development administration in early 1980s. This reformation in due course led to policies that have allowed the participation of non-governmental actors. Meanwhile, rural people have proved their ability to engage in participatory development by forming various local organizations, while NGOs have grown to be proficient facilitators of local development. This paper describes the process whereby three leading actors, namely the government, local people, and the NGOs, have interacted to bring about a more participatory system of local development administration.
    Keywords: Social movements, Local development, Thailand, NGOs, Non-governmental organizations, Civil society, Decision making, Rural development
    JEL: O20 R10
    Date: 2006–08

This nep-geo issue is ©2006 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.