nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒01‒23
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Space Vs. Networks in the Geography of Innovation: A European Analysis By Mario A. Maggioni; Mario Nosvelli; T. Erika Uberti
  2. Regional employment forecasts with spatial interdependencies By Hampel, Katharina; Kunz, Marcus; Schanne, Norbert; Wapler, Rüdiger; Weyh, Antje
  3. Improving urban transport performances by tendering lots: an econometric estimation of natural monopoly frontiers By William Roy; Yves Croissant
  4. Random effects and Spatial Autocorrelations with Equal Weights By Badi H. Baltagi
  5. Equilibrium Nonexistence in Spatial Competition with Quadratic Transportation Costs By Arguedas, Carmen; Hamoudi, Hamid; Saez, Manuel
  6. OLS-based estimation of the disturbance variance under spatial autocorrelation By Prof. Dr. Walter Krämer; Christoph Hanck
  7. Regional housing market spillovers in the US - lessons from regional divergences in a common monetary policy setting By Isabel Vansteenkiste
  8. Multivariate ARCH with spatial effects for stock sector and size By Caporin Massimiliano; Paruolo Paolo
  9. Private operators and time-of-day tolling on a congested road network By André de Palma; Robin Lindsey (Corresponding author); Fang Wu
  10. Vergleich von deutschen Arbeitsmarktregionen By Eckey, Hans-Friedrich; Schwengler, Barbara; Türck, Matthias
  11. Identification of Segments of French Urban Public Transport with a Latent Class Frontier Model By William Roy; Carlos Barros
  12. Local Networks to Compete in the Global Era. The Italian SMEs Experience By Antonia R. Gurrieri; Luca Petruzzellis
  13. Energy Regulation, Roll Call Votes and Regional Resources: Evidence from Russia By Theocharis N. Grigoriadis; Benno Torgler
  14. Using Surveys to Compare the Public’s and Decisionmakers’ Preferences for Urban Regeneration: The Venice Arsenale By Anna Alberini; Alberto Longo; Patrizia Riganti
  15. Birds of a Feather - Better Together? Exploring the Optimal Spatial Distribution of Ethnic Inventors By Ajay Agrawal; Devesh Kapur; John McHale

  1. By: Mario A. Maggioni (DISEIS and Catholic University of Milan); Mario Nosvelli (CERIS-CNR); T. Erika Uberti (DISEIS and Catholic University of Milan)
    Abstract: In the last fifteen years, income differences among European Member States have been strongly narrowing while the process has been matched with a widening of the inter-regional variance within single countries. Traditionally, regional economic disparities in Europe have been ascribed to peripherality and/or to a high level of dependence on declining sectors. Nowadays regional disparities can be no longer defined only in terms of statistical differences in the values of standard macroeconomic indicators, but also according to innovative capacities and knowledge endowment. This paper provides an original framework for the interpretation of the existing relationships between innovation process and research activity in Europe and the structural and geographical features shaping the European scientific and technological map. In order to do so, we focus on two knowledge-based relational phenomena: participation in the same research networks (funded by the EU Fifth Framework Programme) and EPO co-patent applications. Using two complementary econometric techniques we try to assess those factors that determine patenting activity, distinguishing structural features, geographical and relational spillovers. Through these variables we measure the intrinsic relational structure of knowledge flows which directly connects people, institutions and, indirectly, regions, across European countries in order to test whether hierarchical relationships based on a-spatial networks between geographically distant excellence centres prevail over diffusive patterns based on spatial contiguity.
    Keywords: Spatial Distribution, Networks, European Analysis
    JEL: O31 R12 C21
    Date: 2006–12
  2. By: Hampel, Katharina (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Kunz, Marcus (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schanne, Norbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wapler, Rüdiger (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The labour-market policy-mix in Germany is increasingly being decided on a regional level. This requires additional knowledge about the regional development which (disaggregated) national forecasts cannot provide. Therefore, we separately forecast employment for the 176 German labour- market districts on a monthly basis. We first compare the prediction accuracy of standard time-series methods: autoregressive integrated moving averages (ARIMA), exponentially weighted moving averages (EWMA) and the structural-components approach (SC) in these small spatial units. Second, we augment the SC model by including autoregressive elements (SCAR) in order to incorporate the influence of former periods of the dependent variable on its current value. Due to the importance of spatial interdependencies in small labour-market units, we further augment the basic SC model by lagged values of neighbouring districts in a spatial dynamic panel (SCSAR). The prediction accuracies of the models are compared using the mean absolute percentage forecast error (MAPFE) for the simulated out-of-sample forecast for 2005. Our results show that the SCSAR is superior to the SCAR and basic SC model. ARIMA and EWMA models perform slightly better than SCSAR in many of the German labour-market districts. This reflects that these two moving-average models can better capture the trend reversal beginning in some regions at the end of 2004. All our models have a high forecast quality with an average MAPFE lower than 2.2 percent." (author's abstract, IAB-Doku) ((en))
    Keywords: regionaler Arbeitsmarkt, Beschäftigungsentwicklung, Prognoseverfahren
    JEL: C53 J21 O18
    Date: 2007–01–16
  3. By: William Roy (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Yves Croissant (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Recently, some cities decided to divide their transport network into several attractive and accessible parts (this procedure is called allotment) in order to reduce urban transit costs. Gains obtained by introducing more competition for the market should be compared with costs associated with cutting the network into several parts, and this question is crucially linked with the measure of returns to scale. In this paper, we estimate a translog cost function on a panel of French urban transit networks. Our main conclusion is that scale economies are exhausted for a production corresponding to a city of about 200,000 inhabitants and that allotment, in terms of scale economies, would reduce costs for the seven biggest cities of our sample.
    Keywords: urban public transport industry, panel data, natural monopoly, allotment
    Date: 2007–01–05
  4. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020)
    Abstract: This note considers a panel data regression model with spatial autoregressive disturbances and random effects where the weight matrix is normalized and has equal elements. This is motivated by Kelejian et al. (2005), who argue that such a weighting matrix, having blocks of equal elements, might be considered when units are equally distant within certain neighborhoods but unrelated between neighborhoods. We derive a simple weighted least squares transformation that obtains GLS on this model as a simple OLS. For the special case of a spatial panel model with no random effects, we obtain two sufficient conditions where GLS on this model is equivalent to OLS. Finally, we show that these results, for the equal weight matrix, hold whether we use the spatial autoregressive specification, the spatial moving average specification, the spatial error components specification or the Kapoor et al. (2005) alternative to modeling panel data with spatially correlated error components.
    Keywords: Panel data, spatial error correlation, equal weights, error components
    JEL: C23 C12
    Date: 2006–12
  5. By: Arguedas, Carmen (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Hamoudi, Hamid (Departamento de Economía Aplicada y Fundamentos del Análisis Económico II, Universidad Rey Juan Carlos); Saez, Manuel (Departamento de Economía, Universidad Europea de Madrid)
    Abstract: Under quadratic transportation costs, the existence of the sequential first-locate-thenprice equilibrium in spatial competition is well known in the literature. In this paper, we find that the equilibrium may fail to exist under certain restrictions with respect to the location of firms and consumers in the market. This result is valid for both the linear and the circular models
    Keywords: Product differentiation, circular model, linear model, quadratic transportation costs, sequential equilibrium
    JEL: C72 D43
  6. By: Prof. Dr. Walter Krämer (Fachbereich Statistik, Universität Dortmund); Christoph Hanck (Fachbereich Statistik, Universität Dortmund)
    Abstract: We investigate the OLS-based estimator s2 of the disturbance variance in the standard linear regression model with cross section data when the disturbances are homoskedastic, but spatially correlated. For the most popular model of spatially autoregressive disturbances, we show that s2 can be severely biased in finite samples, but is asymptotically unbiased and consistent for most types of spatial weighting matrices as sample size increases.
    Keywords: regression, spatial error correlation, bias, variance
    Date: 2006–10
  7. By: Isabel Vansteenkiste (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: In this paper, we seek to quantify the importance of state-level housing price spillovers and interest rate shocks to house price developments in the United States. The econometric approach involves an application of the recently developed global VAR (GVAR) as presented in Dées, DiMauro, Pesaran, and Smith (2005) and Pesaran, Schuermann, and Weiner (2004) to the 31 biggest US states over the period 1986-2005. Such an approach allows not only for the empirical derivation of the impact of common shocks (such as interest rate shocks) on US house price developments, but also for an analysis of the importance of interstate housing price spillovers. Beyond real house prices and real income per capita, each state-specific vector error correction model also includes nation-wide variables — measured as a weighted average of other states —. These individual state models are then linked in a consistent and cohesive manner. Impact elasticities indicate strong interregional linkages for both real house prices and real income per capita. An analysis of generalised impulse responses indicates that the importance of housing price spillovers is state dependent, with shocks occurring in states with relatively lower land supply elasticities having much stronger spillover effects that those in the other states. As regards real interest rates, the impact appears to be relatively small with an increase of 100 basis points in the real 10-year government bond yield resulting in a long run fall in house prices of between 0.5 and 2.5%. This would suggest, in line with DelNegro and Otrok (2005) that the decline in long-term interest rates is not the primary factor that has driven the recent surge in house prices in the United States. JEL Classification: C32, E44, R10, R31.
    Keywords: housing, monetary policy, global VAR (GVAR).
    Date: 2007–01
  8. By: Caporin Massimiliano (Department of Economics, University of Padova, Italy); Paruolo Paolo (Department of Economics, University of Insubria, Italy)
    Abstract: This paper applies a new spatial approach for the specfication of multivariate GARCH models, called Spatial Effects in ARCH, SEARCH. We consider spatial dependence associated with industrial sectors and capitalization size. This parametrization extends current feasible specifications for large scale GARCH models, keeping the numbers of parameters linear as a function of the number of assets. An application to daily returns on 150 stocks from the NYSE for the period January 1994 to June 2001 shows the benefits of the present specification when compared to alternative specifications.
    Keywords: Spatial models, GARCH, Volatility, Large scale models, Portfolio allocation.
    JEL: C32 C51 C52
    Date: 2005–12
  9. By: André de Palma (Université de Cergy-Pontoise (théma) and ENPC, Member of the Institut Universitaire de France); Robin Lindsey (Corresponding author) (University of Alberta); Fang Wu (University of Alberta)
    Abstract: Private-sector involvement in the construction and operation of roads is growing around the world and private toll roads are seen as a useful tool in the battle against congestion. Yet serious concerns remain about exercise of monopoly power if private operators can set tolls freely. A number of theoretical studies have investigated private toll-road pricing strategies, and compared them with first-best and second-best public tolls. But most of the analyses have employed simple road networks and/or used static models that do not capture the temporal dimension of congestion or describe the impacts of tolling schemes that vary by time of day. This paper takes a fresh look at private toll road pricing using METROPOLIS: a dynamic traffic simulator that treats endogenously choices of transport mode, departure time and route at the level of individual travellers. Simulations are performed for the peak-period morning commute on a stylized urban road network with jobs concentrated towards the centre of the city. Tolling scenarios are defined in terms of what is tolled (traffic lanes, whole links, or toll rings) and how tolls are varied over time. Three administration regimes are compared. The first two are the standard polar cases: social surplus maximization by a public-sector operator, and unconstrained profit maximization by a private-sector operator. The third regime entails varying tolls in steps to eliminate queuing on the tolled links. It is a form of third-best tolling that could be implemented either by a public operator or by the private sector under quality-of-service regulation. Amongst the results it is found that the no-queue tolling regime performs favourably compared to public step tolling, and invariably better than private tolling. Another provisional finding is that a private operator has less incentive than does a public operator to implement time-of-day congestion pricing.
    JEL: D42 R41 R48
    Date: 2007
  10. By: Eckey, Hans-Friedrich; Schwengler, Barbara (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Türck, Matthias
    Abstract: "There are two delineations of German labour market regions. On the one hand the 'Gemeinschaftsaufgabe Verbesserung der regionalen Wirtschaftsstruktur' uses labour market regions for business development programs. Their demarcation is based on 270 functional areas after a modification for the regions of Berlin/Brandenburg. On the other hand there is a demarcation of Eckey/Kosfeld/Türck (2006). Their labour market regions are more spacious compared to the regions of the 'Gemeinschaftsaufgabe', because their data set covers 150 spatial units. Both definitions are based on commuter flows, and the regions are quite independent economic areas. Labour market regions are more suitable for labour economic analyses than administrative units such as Kreise, federal states, NUTS-2-regions etc. The articles uses the example Berlin/Brandenburg and points out, how both demarcations are calculated. In addition we draw a comparison of both delineations." (author's abstract, IAB-Doku) ((en))
    Keywords: Gemeinschaftsaufgabe Regionale Wirtschaftsförderung, Fördergebiet, Arbeitsmarktregion, Regionalgliederung, Berlin-Brandenburg, Bundesrepublik Deutschland
    Date: 2007–01–11
  11. By: William Roy (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Carlos Barros (ISEG - Instituto Superior de Economia e Gestão - [U.T.L. - Technical University of Lisbon])
    Abstract: This paper analyses technical efficiency of French urban public transport from 1995 to 2002 with unbalanced panel data. The latent class frontier model is used allowing the identification of different segments in the production frontier. We find that there are three statistically significant segments in the sample. Therefore, we conclude that no common transport policy can reach all of the transportation companies analysed, thereby requiring transport policies by segments.
    Keywords: Urban public transport, stochastic production frontier, latent class model, technical efficiency, panel data.
    Date: 2007–01–05
  12. By: Antonia R. Gurrieri (University of Bari); Luca Petruzzellis (University of Bari)
    Abstract: This study is concerned with the factors that influence the cooperation among cluster-based firms. Theorists have consistently demonstrated the role and importance of economic externalities, such as knowledge spillovers, within industrial clusters. Less attention has been paid to the investigation of social based externalities, though it has been suggested that these may also accrue from geographical agglomeration. This study explores the development of cooperation between firms operating in a single industry sector and in close proximity. The results suggest that social networking has a greater influence than geographic proximity in facilitating inter-firm co-operation. A semi-structured questionnaire has been developed and the answers were analysed with a stepwise regression model.
    Keywords: Networks, Inter-Firm Cooperation, SMEs
    Date: 2006–11
  13. By: Theocharis N. Grigoriadis (The European Union Delegation to Russia); Benno Torgler (University of California)
    Abstract: This paper investigates the relative impact of regional energy production on the legislative choices of Russian Duma deputies on energy regulation between 1994 and 2003. We apply Poole’s optimal classification method of roll call votes using an ordered probit model to explain energy law reform in the first decade of Russia’s democratic transition. Our goal is to analyze the relative importance of home energy on deputies’ behavior, controlling for other factors such as party affiliation, electoral mandate, committee membership and socio-demographic parameters. We observe that energy resource factors have a considerable effect on deputies’ voting behavior. On the other hand, we concurrently find that regional economic preferences are constrained by the public policy priorities of the federal center that continue to set the tone in energy law reform in post-Soviet Russia.
    Keywords: Energy Regulation, Energy Roll Law Reform, Energy Resources, Roll Call Votes, Legislative Politics, State Duma, Russia
    JEL: Q40 D72 K23 P27 P37 P31 R11
    Date: 2006–11
  14. By: Anna Alberini (University of Maryland); Alberto Longo (Queen’s University Belfast); Patrizia Riganti (The University of Nottingham)
    Abstract: In this paper, we illustrate how surveys can be used to elicit the preferences of the public and of policymakers and city officials for regeneration projects at urban sites. Our methodology uses rating exercises, coupled with conjoint-choice stated preferences for the general public and with ranking exercises for the public officials and other stakeholders, and is then applied to investigate alternative reuses of the Venice Arsenale, Italy, and their economic, environmental and social impacts. One interesting feature of the conjoint choice questions for members of the public is that the responses to these questions can be used to estimate the social benefits of regeneration projects, i.e., how much people are willing to pay for these urban transformations. Another advantage of our approach is that it can be used seek and foster broader public participation into urban decisionmaking processes.
    Keywords: Land Use, Decision-Making, Cleanup, Sustainable Development, Local Economic Development, Choice Experiments
    JEL: R14
    Date: 2006–11
  15. By: Ajay Agrawal; Devesh Kapur; John McHale
    Abstract: We examine how the spatial and social proximity of inventors affects knowledge flows, focusing especially on how the two forms of proximity interact. We develop a knowledge flow production function (KFPF) as a flexible tool for modeling access to knowledge and show that the optimal spatial concentration of socially proximate inventors in a city or nation depends on whether spatial and social proximity are complements or substitutes in facilitating knowledge flows. We employ patent citation data, using same-MSA and co-ethnicity as proxies for spatial and social proximity, respectively, to estimate the key KFPF parameters. Although co-location and co-ethnicity both predict knowledge flows, the marginal benefit of co-location is significantly less for co-ethnic inventors. These results imply that dispersion of socially proximate individuals is optimal from the perspectives of the city and the economy. In contrast, for socially proximate individuals themselves, spatial concentration is preferred - and the only stable equilibrium.
    JEL: O33 R12 Z13
    Date: 2007–01

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