nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒06‒11
twelve papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Spatial Hierarchy of Technological Change and Economic Development in Europe By Verspagen, Bart
  2. Stable Partial Agglomeration in a New Economic Geography Model with Urban Frictions By Sylvain Barde
  3. A Tale of Two Stadiums: Comparing the Economic Impact of Chicago’s Wrigley Field and U.S. Cellular Field By Victor Matheson; Robert Baade; Mimi Nikolova
  4. Industry Specialization, Diversity and the Efficiency of Regional Innovation Systems By Michael Fritsch; Viktor Slavtchev
  5. New Estimates of Regional GDP in Spain, 1860-1930 By Julio Martinez Galarraga
  6. Modelling the Folk Theorem: A Spatial Cournot Model with Explicit Increasing Returns to Scale By Sylvain Barde
  7. Agglomeration and Co-Agglomeration of Services Industries By Kolko, Jed
  8. Dynamic of demografic indicators: competitiveness of byelorussian regions (Gomel region) By Khatsko, Aliaksei
  9. Spatial Mismatch or Racial Mismatch? By Judith K. Hellerstein; David Neumark; Melissa McInerney
  11. An assessment of government funding of business angel networks: a regional study By Collewaert, V.; Manigart, S.; Rudy Aernoudt
  12. Panel Unit Root Tests and Spatial Dependence By Badi H. Baltagi; Georges Bresson; Alain Pirotte

  1. By: Verspagen, Bart (Eindhoven University of Technology, UNU-MERIT)
    Abstract: This paper discusses the possibility of a spatial hierarchy of innovation and growth dynamics in Europe. A spatial hierarchy is understood as a geographical clustering of regions, where important differences exist in terms of innovation and growth dynamics between the clusters. The literature on regional growth and innovation is briefly scanned. After this, a database on European regional growth and innovation dynamics is presented. Spatial correlation analysis and spatial principal components analysis are used to explore the possibility of a spatial hier-archy in Europe. The results point to a hierarchy consisting of four groups: South Europe, East Europe, and two groups in West and North Europe. Growth and innovation performance in these clusters is discussed, and some policy conclusions are drawn.
    Keywords: Technological Change, Economic Development, Europe, Geographical Distribution, Government Policy
    JEL: O31 O18 O52 O38
    Date: 2007
  2. By: Sylvain Barde
    Abstract: This paper extends the Puga (1999) model by introducing urban frictions. It assumes that the agglomeration of manufacturing in a city imposes a cost on the inhabitants of the agglomerated region. Furthermore, an implicit function methodology is developed to provide a numerical stability function that does not require prior analytical work. Simulations reveal that these numerical stability conditions are consistent with the original Puga (1999) analytical predictions. The central finding is that the extension significantly alters the agglomeration properties of the original Puga framework. In particular, partial agglomeration becomes a stable long run outcome in both with and without migration. Furthermore, the level of sensitivity of the agglomeration to the friction cost market parameters is shown to be different in the both cases. This outlines the need to evaluate the imperfectness of migration when modifying the urban geography as a policy implication.
    Keywords: Agglomeration; new economic geography; migration; urban friction
    JEL: R11 R12 F12
    Date: 2007–01
  3. By: Victor Matheson (Department of Economics, College of the Holy Cross); Robert Baade (Department of Economics and Business, Lake Forest College); Mimi Nikolova (Department of Economics and Business, Lake Forest College)
    Abstract: Supporters of sports stadium construction often defend taxpayer subsidies for stadiums by suggesting that sports infrastructure can serve as an anchor for local economic redevelopment. Have such promises of economic rejuvenation been realized? The City of Chicago provides an interesting case study on how a new stadium, U. S. Cellular Field, has been integrated into its southside neighborhood in a way that may well have limited local economic activity. This economic outcome stands in stark contrast to Wrigley Field in northern Chicago which continues to experience a synergistic commercial relationship with its neighborhood.
    Keywords: sports, stadiums, development, baseball, Chicago, economic impact
    JEL: L83 O18 R53
    Date: 2007–06
  4. By: Michael Fritsch (University of Jena, School of Busniess and Economics, Max Planck Institute of Economics Jena, and Institute for Economic Research (DIW Berlin)); Viktor Slavtchev (University of Jena, School of Busniess and Economics)
    Abstract: Innovation processes are characterized by a pronounced division of labor between actors. Two types of externality may arise from such interactions. On the one hand, a close location of actors affiliated to the same industry may stimulate innovation (MAR externalities). On the other hand, new ideas may be born by the exchange of heterogeneous and complementary knowledge between actors, which belong to different industries (Jacobs' externalities). We test the impact of both MAR as well as Jacobs' externalities on innovative performance at the regional level. The results suggest an inverted u-shaped relationship between regional specialization in certain industries and innovative performance. Further key determinants of the regional innovative performance are private sector R&D and university-industry collaboration.
    Keywords: Innovation, technical efficiency, patents, agglomeration concentration, specialization, diversity, regional analysis.
    JEL: O31 O18 R12
    Date: 2007–06–05
  5. By: Julio Martinez Galarraga (Universitat de Barcelona)
    Abstract: This paper presents a new regional database on GDP in Spain for the years 1860, 1900, 1914 and 1930. Following Geary and Stark (2002), country level GDP estimates are allocated across Spanish provinces. The results are then compared with previous estimates. Further, this new evidence is used to analyze the evolution of regional inequality and convergence in the long run. According to the distribution dynamics approach suggested by Quah (1993, 1996) persistence appears as a main feature in the regional distribution of output. Therefore, in the long run no evidence of regional convergence in the Spanish economy is found.
    Keywords: convergence, economic growth, regional gdp, distribution dynamics, economic history
    JEL: N93 O47 E1 N94 O18
    Date: 2007
  6. By: Sylvain Barde
    Abstract: This paper attempts to model directly the "folk theorem" of spatial economics, according to which increasing returns to scale are essential for understanding the geographical distributions of activity. The model uses the simple structure of most New Economic Geography papers, with two identical regions, a costlessly traded agricultural sector and a manufacturing sector subject to iceberg costs. This simple setting isolates IRS in manufacturing production function as the only potential agglomerating force. This implies that an unstable symmetric equilibrium means IRS cause agglomeration. The central result is that while a CRS manufacturing sector will always stay at the symmetric equilibrium, the presence of IRS in manufacturing causes the symmetric equilibrium to become unstable and agglomeration becomes the only long run equilibrium for the system.
    Keywords: Agglomeration; increasing returns to scale; imperfect competition
    JEL: R10 R12 F12
    Date: 2007–01
  7. By: Kolko, Jed
    Abstract: Economic research on industry location and agglomeration has focused nearly exclusively on manufacturing. This paper shows that services are prominent among the most agglomerated industries, especially at the county level. Because traditional measures of knowledge spillovers, natural resource inputs, and labor pooling explain little of agglomeration in services industries, this paper takes an alternative approach and looks at co-agglomeration to assess why industries cluster together. By considering the location patterns of pairs of industries instead of individual industries, the traditional agglomeration explanations can be measured more richly, and additional measures – like the need to locate near suppliers or customers – can be incorporated. The results show that co-agglomeration between pairs of services industries is driven by knowledge spillovers and the direct trading relationship between the industries, especially at the zip code level. Information technology weakens the need for services industries to co-agglomerate at the state level, perhaps because electronic transport of services outputs lowers the value of longer-distance proximity. These results are in sharp contrast to results for manufacturing, for which labor pooling contributes most to co-agglomeration, and the direct-trading relationship contributes more to state-level co-agglomeration. These differences between services and manufacturing are consistent with simple models of transport costs.
    Keywords: agglomeration; economic geography; services; technology; internet; co-agglomeration; firm location; transport costs
    JEL: R30 R12 L80
    Date: 2007–04
  8. By: Khatsko, Aliaksei
    Abstract: Статья посвящена проблеме конкурентоспособности Белорусских регионов, в частности Гомельской области в разрезе районов. Значительное число авторов описывает проблемы конкурентоспособности областей Беларуси, но не районов. В то же самое время, тщательный анализ показывает значительную разницу между уровнями развития именно отдельных районов. В связи с этим считаем, анализ конкурентоспособности на уровне районов актуален на данный момент. Оценка конкурентоспособности районов должна включать в себя значительное количест-во факторов. Основное внимание в статье уделено анализу демографических пока-зателей, как индикаторов динамики трудового потенциала. The article stresses on the problem of regional competitiveness of Belarusian regions, exactly to the Gomel region (oblast) and its parts. Great number of authors describes only main regions of Belarus (oblast), but not their parts (rayon). Close analysis shows great differences between levels of social-economic development of the parts of each of the main Belarusian regions rayons. Therefore, analysis of competition at the rayon’s level is reasonable. Main attention devote to the analysis of demographic indicators as a part of humans’ capital development and factor of competitiveness. The main conclusion is the urgent necessity of regional competitiveness estimation for Belarusian regions. The estimation of competitiveness should include a research of wide range of factors re-flecting the rate of the competitiveness of the current region (rayon).
    Keywords: конкурентоспособность; регион; район; трудовые ресурсы; миграция; естественный прирост
    JEL: R11 J11
    Date: 2006
  9. By: Judith K. Hellerstein; David Neumark; Melissa McInerney
    Abstract: We contrast the spatial mismatch hypothesis with what we term the racial mismatch hypothesis -- that the problem is not a lack of jobs, per se, where blacks live, but a lack of jobs into which blacks are hired, whether because of discrimination or labor market networks in which race matters. We first report new evidence on the spatial mismatch hypothesis, using data from Census Long-Form respondents. We construct direct measures of the presence of jobs in detailed geographic areas, and find that these job density measures are related to employment of black male residents in ways that would be predicted by the spatial mismatch hypothesis -- in particular that spatial mismatch is primarily an issue for low-skilled black male workers. We then look at racial mismatch, by estimating the effects of job density measures that are disaggregated by race. We find that it is primarily black job density that influences black male employment, whereas white job density has little if any influence on their employment. This evidence implies that space alone plays a relatively minor role in low black male employment rates.
    JEL: J71 J78 R12
    Date: 2007–06
  10. By: Brigitte S. Waldorf (Department of Agricultural Economics, College of Agriculture, Purdue University)
    Abstract: This paper— part of a comprehensive project on industry clusters and rural competitiveness— explores the role of industrial specialization and rurality on economic performance for counties in the continental United States. Regression models are estimated that evaluate the impact of industry cluster-specific employment shares on per capita income growth overall, as well as in a sequence of different contextual settings. Overall, the results suggest that economic disparities across U.S. counties will diminish. The results also suggest that economic specialization “per se” is not a guarantee for economic growth. Instead, economic growth very much depends on the type of specialization and the contextual setting, with distinct differences between, for example, the metropolitan sphere, the rural sphere, and the rural-metro interface.
    Keywords: Manufactured Housing;Economic Growth, Industry Clusters, Rural America
    JEL: O18 O51 R11
    Date: 2007
  11. By: Collewaert, V.; Manigart, S.; Rudy Aernoudt
    Abstract: In this paper we evaluate whether government intervention through the public funding of business angel networks is warranted. Based on a regional study of four BANs, we find that these subsidies reach their goals in terms of contribution to economic development and reducing financing and information problems entrepreneurial companies face. However, they are partly based on the wrong assumptions as these companies are not (yet) value creating. Therefore, we advise caution in using the market failure argument as grounds for government intervention in the informal risk capital market.
    Keywords: risk capital; business angels; policy; economic development; market failure
    JEL: G24 H71 M13 R58
    Date: 2007–06–05
  12. By: Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Georges Bresson; Alain Pirotte
    Abstract: This paper studies the performance of panel unit root tests when spatial effects are present that account for cross-section correlation. Monte Carlo simulations show that there can be considerable size distortions in panel unit root tests when the true specification exhibits spatial error correlation. These tests are applied to a panel data set on net real income from the 1000 largest French communes observed over the period 1985-1998.
    Keywords: Nonstationarity, panel data, spatial dependence, cross-section correlation, unit root tests
    JEL: C23
    Date: 2006–12

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