nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒04‒09
twenty-one papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Knowledge Spillover Agents and Regional Development By Michaela Trippl; Gunther Maier
  2. Property Rights and the Urban Environment: Local Public Goods in Indonesian Cities By Hoy, M.; Jimenez, E.
  3. Labor productivity in Europe: Evidence from a sample of regions By Lionel Artige; Rosella Nicolini
  4. Demographic Change and Regional Competitiveness: The Effects of Immigration and Ageing By Jacques Poot
  5. Can Information Asymmetry Cause Agglomeration? By Berliant, Marcus; Kung, Fan-chin
  6. Expensive and low-price places to live - Regional price levels and the agglomeration wage differential in Western Germany By Blien, Uwe; Gartner, Hermann; Stüber, Heiko; Wolf, Katja
  7. What attracts human capital? : Understanding the skill composition of interregional job matches in Germany By Arntz, Melanie
  8. Geographic concentration and firm productivity By David C. Maré; Jason Timmins
  9. Satellites and Suburbs: A High-resolution Model of Open-space Conversion By Colin Vance; Rich Iovanna
  10. Defining Areas: Linking Geographic Data in New Zealand By Arthur Grimes; David C. Maré; Melanie Morten
  11. How Does Geography Matter in Ethnic Labor Market Segmentation Process? A Case Study of Chinese Immigrants in the San Francisco CMSA By Qingfang Wang
  12. House Prices and Rents: Socio-Economic Impacts and Prospects By Arthur Grimes; Andrew Aitken
  13. Language, Agglomeration, and Hispanic Homeownership By Donald Haurin; Stuart Rosenthal
  14. Determinants of Manufacturing-R&D Co-location By Mikko Ketokivi; Jyrki Ali-Yrkkö
  15. Geographic Redistribution of the U.S. Manufacturing and The Role of State Development Policy By Yoonsoo Lee
  16. Segregation and Strategic Neighborhood Interaction By Jason Barr; Troy Tassier
  17. Traffic, Transportation, Infrastructure and Externalities - a Theoretical Framework for a CGE Analysis - By Conrad, Klaus
  18. The Harris-Todaro Hypothesis By M. Ali Khan
  19. On the Link between Urban Form and Automobile Use - Evidence from German Survey Data By Colin Vance; Ralf Hedel
  20. Phillips Curve or wage curve? Evidence from West Germany: 1980-2004 By Baltagi, Badi H.; Blien, Uwe; Wolf, Katja
  21. How Land Use Shapes the Evolution of Road Networks By David Levinson; Bhanu Yerra

  1. By: Michaela Trippl; Gunther Maier
    Date: 2007
  2. By: Hoy, M.; Jimenez, E.
    Date: 2006
  3. By: Lionel Artige; Rosella Nicolini
    Abstract: The present paper aims at analyzing the sources of labor productivity in Europe at regional level. We study the productivity performance in a sample of twenty European regions belonging to four countries (France, Germany, Italy and Spain). Exploiting the increasing availability of disaggregated data at regional level, we propose both a descriptive statistics and an econometric analysis of productivity sources since 1995. Our main finding is that the levels and sources of labor productivity are rather heterogeneous across the sample. This heterogeneity is found to be associated with disparities both across sectors and regions.
    Keywords: Labor productivity, productivity determinants, European regions.
    JEL: J24 O11 O18 O52
    Date: 2006
  4. By: Jacques Poot (University of Waikato)
    Abstract: The demographic profile of a region is usually seen as a slowly changing background phenomenon in the analysis of regional competitiveness and regional growth. However, regional demographic change can have a significant impact on regional competitiveness and such change is often more rapid and profound than at the national level. In turn, regional population size, growth, composition and distribution are endogenous to regional economic development. This paper focuses on the impact of population ageing and immigration on aspects of regional competitiveness such as innovation, entrepreneurship and productivity. Immigration and ageing trends have generated huge separate literatures but it is argued here that it is fruitful to consider these trends jointly. Theoretically, there are many channels through which immigration and population ageing can affect regional competitiveness. There is empirical evidence that population ageing reduces regional competitiveness, while immigration – particularly of entrepreneurs and highly skilled workers to metropolitan areas – enhances competitiveness. Much of the available literature is based on small-scale case studies and rigorous econometric research on the impact of demographic change at the regional level is still remarkably rare. Some directions for further research are suggested.
    Keywords: regional competitiveness, immigration, population ageing, innovation
    JEL: F22 J11 O31 R11
    Date: 2007–03–27
  5. By: Berliant, Marcus; Kung, Fan-chin
    Abstract: The modern literature on city formation and development, for example the New Economic Geography literature, has studied the agglomeration of agents in size or mass. We investigate agglomeration in sorting or by type of worker, that implies agglomeration in size when worker populations differ by type. This kind of agglomeration can be driven by asymmetric information in the labor market, specifically when firms do not know if a particular worker is of high or low skill. In a model with two types and two regions, workers of different skill levels are offered separating contracts in equilibrium. When mobile low skill worker population rises or there is technological change that favors high skilled workers, integration of both types of workers in the same region at equilibrium becomes unstable, whereas sorting of worker types into different regions in equilibrium remains stable. The instability of integrated equilibria results from firms, in the region to which workers are perturbed, offering attractive contracts to low skill workers when there is a mixture of workers in the region of origin.
    Keywords: Adverse selection; Agglomeration
    JEL: D82 R13 R12
    Date: 2006–10–31
  6. By: Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Gartner, Hermann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Stüber, Heiko (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Recently, there has been a renewed interest in the agglomeration wage differential. One of the open research question is whether wage differences between large cities and the rural country are due to unobserved differences in regional price levels. In this paper information on regional price levels for western German regions is used to assess this wage differential. Since for many regions price information is not available Multiple Imputation is used to generate completed data sets. It can be shown that this strategy is more reliable than simply using predictions of regression analysis. The results obtained show that the agglomeration wage differential in Germany is smaller than in the US, and that only a minor part of it can be explained by differences in prices." (author's abstract, IAB-Doku) ((en))
    Keywords: Lohnunterschied, regionale Disparität, Preisniveau, Westdeutschland, Bundesrepublik Deutschland
    JEL: R12 J31 C11
    Date: 2007–04–05
  7. By: Arntz, Melanie
    Abstract: By examining the destination choice patterns of heterogenous labor, this paper tries to explain the skill composition of internal job matching flows in Germany. Estimates from a nested logit model of destination choice suggest that spatial job matching patterns by high-skilled individuals are mainly driven by interregional income differentials, while interregional job matches by less-skilled individuals are much more affected by regional differentials in job opportunities. Regional differentials in non-pecuniary assets slightly contribute to spatial sorting processes in Germany. Such differences in destination choices by skill level are partly modified by different spatial patterns of job-to-job matches and job matches after unemployment. Simulating job matching patterns in a scenario of economic convergence between eastern and western Germany demonstrates that wage convergence is the most effective means of attracting human capital to eastern Germany.
    Keywords: interregional job matches, destination choice, human capital
    JEL: C35 J61 R23
    Date: 2006
  8. By: David C. Maré (Motu Economic and Public Policy Research); Jason Timmins (New Zealand Department of Labour)
    Abstract: Firms operating in dense labour markets are more productive, although understanding the mechanisms behind this relationship is both challenging and contentious. This paper uses a newly assembled dataset on location and labour productivity of most New Zealand firms to examine the role of location patterns at the industry, local labour market, and industry*location levels. We derive estimates in the presence of firm, location, and period fixed effects, paying particular attention to controlling for unobserved local and industry factors. Our findings confirm that labour productivity is higher for firms in geographically-concentrated industries ("localisation"), for firms in more industrially-diversified labour markets ("urbanisation"), and for firms operating in larger labour markets. Controlling for heterogeneity of industries, locations, and firms, we find some support for a positive productivity effect of changes in both localisation and urbanisation, although not all estimated effects are statistically and economically significant.
    Keywords: Labour Productivity, Geographic concentration; agglomeration
    JEL: R12 R3
    Date: 2006–10
  9. By: Colin Vance; Rich Iovanna
    Abstract: This study examines the determinants of urbanized area across a 10,000-mile square swath in central North Carolina, an area undergoing extensive conversion of forest and agricultural land.We model the temporal and spatial dimensions of these landscape changes using a database that links five satellite images spanning 1976–2001 to a suite of socioeconomic, ecological and GIScreated explanatory variables. By specifying the complementary log-log derivation of the proportional hazards model, we employ a methodology for modeling a continuous time process – the conversion of land to impervious surface – using discrete-time satellite data. Spatial effects are captured by several variables derived from the imagery that measure the landscape configuration surrounding a pixel. Empirical results confirm the significance of several determinants of urbanization identified elsewhere in the literature, including proximity to roads and population density, but also suggest that the parameterization of these variables is biased when the influence of landscape configuration is unaccounted for. We conclude that the inclusion of spatial pattern metrics significantly improves both the explanatory and predictive power of the estimated model of urbanization.
    Keywords: Urbanization, hazard models, satellite imagery
    JEL: R14 C41
    Date: 2006–10
  10. By: Arthur Grimes (Motu Economic and Public Policy Research); David C. Maré (Motu Economic and Public Policy Research); Melanie Morten (Motu Economic and Public Policy Research)
    Abstract: This paper develops a match quality statistic to quantify the trade-off between 'specificity' and 'completeness' when aggregating one regional aggregation to another. We apply this statistic to calculate the degree of mismatch between various regional aggregations for New Zealand using 1991 and 2001 Census Data. A program to calculate mismatch statistics is included as an appendix, as a Stata(r) ado file.
    Keywords: Match quality; Geographic Aggregation
    JEL: R1 C80
    Date: 2006–08
  11. By: Qingfang Wang
    Abstract: In the context of continuing influxes of large numbers of immigrants to the United States, urban labor market segmentation along the lines of race/ethnicity, gender, and class has drawn considerable growing attention. Using a confidential dataset extracted from the United States Decennial Long Form Data 2000 and a multilevel regression modeling strategy, this paper presents a case study of Chinese immigrants in the San Francisco metropolitan area. Correspondent with the highly segregated nature of the labor market as between Chinese immigrant men and women, different socioeconomic characteristics at the census tract level are significantly related to their occupational segregation. This suggests the social process of labor market segmentation is contingent on the immigrant geography of residence and workplace. With different direction and magnitude of the spatial contingency between men and women in the labor market, residency in Chinese immigrant concentrated areas is perpetuating the gender occupational segregation by skill level. Whereas abundant ethnic resources may exist in ethnic neighborhoods and enclaves for certain types of employment opportunities, these resources do not necessarily help Chinese immigrant workers, especially women, to move upward along the labor market hierarchy.
    Keywords: Chinese immigrants, ethnic niches, gender, residence, workplace, San Francisco
    Date: 2007–03
  12. By: Arthur Grimes (Motu Economic and Public Policy Research); Andrew Aitken (Motu Economic and Public Policy Research)
    Abstract: We use New Zealand property data at the area unit (suburb) level to examine implied prospects for communities over time, and test whether these derived prospects have explanatory power relating to actual future outcomes. We also use the data to analyse whether disadvantaged communities face particular problems in relation to rental markets. Our results indicate that: capital gains and rental growth expectations historically have appeared reasonable in that they have not been suggestive of asset bubbles or other fad behaviour; derived capital gains and rental growth expectations have explanatory power both over actual future capital gains and actual future rental growth; and lower socio-economic areas face higher rental yields even after controlling for non-socio-economic factors than do high socio-economic areas.
    Keywords: House prices; house rents; rental yields; capital gains; community prospects
    JEL: R11 R21
    Date: 2007–03
  13. By: Donald Haurin (Department of Economics, Ohio State University); Stuart Rosenthal (Department of Economics, Syracuse University)
    Abstract: As of the fourth quarter of 2005, 76 percent of white non-Hispanic families owned homes, but only 50 percent of Hispanic families. We argue that low rates of homeownership in Hispanic communities create a self-reinforcing mechanism that contributes to this large disparity. In part, this occurs because proximity to other homeowners belonging to a family’s social network improves access to information about how to become a homeowner. Role model effects may also be relevant. We investigate these issues using household-level data on out-of-state movers from the 2000 Decennial Census. Three especially important results are obtained. First, proximity to Hispanic homeowners in the 1995 place of residence increases the propensity of a Hispanic family to own a home in 2000. Second, that effect is especially strong with respect to proximity to weak English speaking Hispanic homeowners. Third, these patterns hold regardless of the Hispanic family’s own ability to speak English. From a policy perspective, these results suggest that local programs designed to promote homeownership among weak English-speaking Hispanic families likely increase Hispanic homeownership beyond just the immediate program participants.
    Keywords: Language, Agglomeration, Homeownership
    JEL: R11 R12 R21
    Date: 2007–01
  14. By: Mikko Ketokivi; Jyrki Ali-Yrkkö
    Abstract: The phenomenon of physical R&D-manufacturing co-location is interesting, because researchers have made very different observations regarding its prevalence. In some populations co-location of the two functions seems to be the norm; in others, an exception. However, we still do not have an explicit explanatory theory of co-location. In this paper, we look the reasons why manufacturing and R&D may have to be physically co-located. In a sample of 241 Finnish industrial firms, we find that the need for co-location varies drastically from company to company. We further find that product complexity, process complexity and industry clockspeed have an effect on co-location need.
    Keywords: business location decisions, co-location, R&D, manufacturing, contingency theory
    JEL: D21 D23 F21 F23 L6 O32
    Date: 2007–03–30
  15. By: Yoonsoo Lee
    Abstract: Competition among state and local governments to lure businesses has attracted considerable interest from economists, as well as legislators and policy makers. This paper quantifies the role of plant relocations in the geographic redistribution of manufacturing employment and examines the effectiveness of state development policy. Only a few studies have looked at how manufacturing firms locate their production facilities geographically; they have used either small manufacturing samples or small geographic regions. This paper provides broader evidence of the impact of plant relocations using confidential establishment level data from the U.S. Census Longitudinal Research Database (LRD), covering the full population of manufacturing establishments in the United States over the period from 1972 to 1992. This paper finds a relatively small role for relocation in explaining the disparity of manufacturing employment growth rates across states. Moreover, it finds evidence of very weak effects of incentive programs on plant relocations.
    Keywords: entry, exit, relocation, tax incentive
    JEL: J23 H25 H73 R58
    Date: 2007–03
  16. By: Jason Barr; Troy Tassier
    Abstract: We introduce social interactions into the Schelling model of residential choice. These social interactions take the form of a Prisoner's Dilemma game played with neighbors. First, we study the Schelling model over a wide range of utility functions and then proceed to study a spatial Prisoner's Dilemma model. These models provide a benchmark for studying a combined model with preferences over like-typed neighbors and payoffs in the spatial Prisoner's Dilemma game. We study this combined model both analytically and using agent-based simulations. We find that the presence of these additional social interactions may increase or decrease segregation compared to the standard Schelling model. If the social interactions result in cooperation then segregation is reduced, otherwise it is increased.
    Keywords: Schelling Tipping Model, Spatial Prisoner's Dilemma, Cooperation, Segregation
    JEL: C63 C73 D62
    Date: 2007–04
  17. By: Conrad, Klaus (Institut für Volkswirtschaft und Statistik (IVS))
    Abstract: In Europe traffic congestions make it impossible to estimate travel time. The increasing number of cars calls for a transportation policy towards an improved efficiency of the transportation system. However, extending road infrastructure to reduce the con
  18. By: M. Ali Khan (The Johns Hopkins University, Baltimore, USA)
    Abstract: The Harris-Todaro hypothesis replaces the equality of wages by the equality of ‘expected’ wages as the basic equilibrium condition in a segmented but homogeneous labour market, and in so doing it generates an equilibrium level of urban unemployment when a mechanism for the determination of urban wages is specified. This article reviews work in which the Harris-Todaro hypothesis is embedded in canonical models of trade theory in order to investigate a variety of issues in development economics. These include the desirability (or the lack thereof) of foreign investment, the complications of an informal sector, and the presence of clearly identifiable ethnic groups
    Keywords: Harris-Todaro, Wages, Labour Economics, Labour Market, Rural to Urban Migration
    JEL: D00
    Date: 2007
  19. By: Colin Vance; Ralf Hedel
    Abstract: This study investigates the influence of urban form on automobile travel using travel-diary data from Germany. Two dimensions of car use are considered: the discrete decision to own a car and the continuous decision of distance traveled. Because these decisions are likely to be influenced by factors unobservable to the researcher, we apply censored regression models to evaluate the role of biases emerging from sample selectivity. Unlike much of the literature, we find that urban form variables are a significant determinant of both automobile ownership and use, a finding that holds even after using instrumental variables to control for endogeneity.
    Keywords: urban form, non-work automobile travel, sample selectivity, instrumental variables
    JEL: R14 R41
    Date: 2006–09
  20. By: Baltagi, Badi H.; Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Wolf, Katja (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper reconsiders the West German wage curve using the employment statistics of the Federal Employment Services of Germany (Bundesanstalt für Arbeit) over the period 1980-2004. This updates the earlier study by Baltagi and Blien (1998) by 15 years for a more disaggregated 326 regions of West Germany. It is based on a random sample of 417,426 individuals drawn from the population of employees whose establishments are required to report to the social insurance system. We find that the wage equation is highly autoregressive but far from unit root. This means that this wage equation is not a pure Phillips curve, nor a static wage curve, and one should account for wage dynamics. This in turn leads to a smaller but significant unemployment elasticity of -0.02 up to -0.03 rather than the -0.07 reported in the static wage curve results reported by Baltagi and Blien (1998)." (author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitslosenquote, Lohnhöhe, regionaler Arbeitsmarkt, Lohnkurve, IAB-Beschäftigtenstichprobe, Phillipskurve, Westdeutschland, Bundesrepublik Deutschland
    JEL: C23 J30 J60
    Date: 2007–04–02
  21. By: David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota); Bhanu Yerra
    Abstract: The present research develops an agent-based model to treat the organization, growth, and contraction of network elements. The components model travel demand, revenue, cost, and investment. Revenue earned by links in excess of maintenance costs is invested on the link to until all revenue is consumed. After upgrading (or downgrading) each link in the network, the time period is incremented and the whole process is repeated until an equilibrium is reached or it is clear that it cannot be achieved. The model is tested with three alternative land use patterns: uniform, random, and bell-shaped, to test the effects of land use on resulting network patterns. It is found that similar, but not identical, equilibrium hierarchical networks result in all cases, with the bell-shaped network, with a CBD, having higher level roads concentrated in a belt around the CBD, while the other networks are less concentrated
    Keywords: Self-organization, network growth, network evolution, transportation planning, land use planning
    JEL: R40 R42 R48 R14 D10 D83 D85 O33
    Date: 2006

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