nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒06‒18
fourteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Regional Income and Employment Effects of the 1972 Munich Olympic Summer Games By Stephanie Jasmand; Wolfgang Maennig
  2. 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
  3. Tax differentials and agglomeration economies in intraregional firm location By Jordi Jofre; Alberto Sole
  4. Labour Market Effects of the 2006 Soccer World Cup in Germany. By Florian Hagn; Wolfgang Maennig
  5. Regional impacts of remittances on the economic growth of Mexico By Mendoza, Jorge Eduardo; Calderon, Cuahtemoc
  6. About urban mega regions : knowns and unknowns By Yusuf, Shahid
  7. An application proposal of yardstick competition for the regional markets of the French railway system By Julien Lévêque
  8. The Use of Permanent Contracts Across Spanish Regions: Do Regional Wage Subsidies Work? By J. Ignacio García-Pérez; Yolanda Rebollo
  9. Methodologies and Tools to Evaluate Issues Relating to Land-Use and / or Social Aspects of Urban Transportation Policies: An accessibility Concept Linked Approach By David Caubel
  10. Foreign direct investment in Vietnam: An overview and analysis the determinants of spatial distribution across provinces By Nguyen, Ngoc Anh; Nguyen, Thang
  11. A Direct Test of the Homevoter Hypothesis By Carolyn A. Dehring; Craig A. Depken, II; Michael R. Ward
  12. Analyse des dynamiques spatiales en région Rhône-Alpes By Danièle Bloy; Jean-Michel Cusset; Nicolas Ovtracht
  13. Home, Sweet Home or Is It - Always? Testing the Efficiency of the Norwegian Housing Market By Erling Røed Larsen and Steffen Weum
  14. Economic Base Multipliers Revisited By Derek Bond; Michael J. Harrison; Edward J. O'Brien

  1. By: Stephanie Jasmand; Wolfgang Maennig (University of Hamburg)
    Abstract: Olympic Games may have impacts on income and employment in the host city, but no ex post study has been carried out for European Olympic host cities to date. The present study closes this gap using the 1972 Munich Olympic Games. The data period examined in this study allows for analysis of long-term effects. In addition, the methodology avoids overestimating the significance of the effects. Finally, we report results for all possible combinations of pre- and post-Olympic periods. The results: income in Olympic regions grew significantly faster than in other German regions. In contrast, no employment effects were identified.
    Keywords: Olympic Games, mega events, income, employment
    JEL: L83 O18 R11 R53 R58
    Date: 2007–06
  2. 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
  3. By: Jordi Jofre (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB)); Alberto Sole (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))
    Abstract: This paper analyses empirically how differences in local taxes affect the intraregional location of new manufacturing plants. These effects are examined within the random profit maximization framework while accounting for the presence of different types of agglomeration economies (localization/ urbanization/ Jacobs? economies) at the municipal level. We look at the location decision of more than 10,000 establishments locating between 1996 and 2003 across more than 400 municipalities in Catalonia, a Spanish region. It is necessary to restrict the choice set to the local labor market and, above all, to control for agglomeration economies so as to identify the effects of taxes on the location of new establishments.
    Keywords: Agglomeration economies, Firm location, Local taxes
    JEL: R3 H32
  4. By: Florian Hagn; Wolfgang Maennig (University of Hamburg)
    Abstract: Olympic Games may have impacts on income and employment in the host city, but no ex post study has been carried out for European Olympic host cities to date. The present study closes this gap using the 1972 Munich Olympic Games. The data period examined in this study allows for analysis of long-term effects. In addition, the methodology avoids overestimating the significance of the effects. Finally, we report results for all possible combinations of pre- and post-Olympic periods. The results: income in Olympic regions grew significantly faster than in other German regions. In contrast, no employment effects were identified.
    Keywords: Labour market, regional economics, sports economics, World Cup, Stadium Impact
    JEL: L83 R53 R58
    Date: 2007–06
  5. By: Mendoza, Jorge Eduardo; Calderon, Cuahtemoc
    Abstract: The study relates the economic liberalization of the Mexican economy and the expansion of remittances inflows with regional economic growth in Mexico. A convergence non-linear econometric model was specified using the degree of economic openness and remittances as the conditional variables. The results showed that some regions have experienced a rapid growth of per capita remittances. However this variable does not presented a statistically significant coefficient. On the other hand, variables reflecting economic liberalization exhibited a positive effect on regional growth.
    Keywords: International Migration; remittances; regional economic growth
    JEL: O14 J61 O47
    Date: 2006
  6. By: Yusuf, Shahid
    Abstract: Mega urban regions are not a passing phenomenon. They are likely to persist and to enlarge their economic footprints because they benefit from the advantages of market scale, agglomeration economies, location, and the increasing concentration of talented workers. Metropolitan regions which are polycentric, relatively well managed, and have invested heavily in transport infrastructure are able to contain some of the problems attendant upon a concentration of people and industry. Moreover, with energy and water resources becoming relatively scarce and many countries anxious to pre serve arable land for farming, the economic advantages of densely populated urban areas are on the rise because they have a lower resource utilization quotient. During the next 15 years, mega urban economies could coalesce in three Southeast Asian locations: Bangkok, Jakarta, and the Singapore-Iskander Development Region (IDR, South Johor). The Bangkok and Jakarta (Jabotabek) metropolitan regions have passed the threshold at least in terms of population size but they have yet to approach the industrial diversity, dynamism, and growth rates of a Shanghai or a Shenzhen-Hong Kong region. Singapore, if coupled with IDR, has the potential but it is still far from being an integrated urban region. This paper examines the gains from closer economic integration and the issues to be settled before it could occur. The paper notes that a tightening of localized economic links between two sovereign nations through the formation of an urban region would involve a readiness to make long-term political commitments based on a widely perceived sense of substantial spillovers and equitably shared benefits. Delineating these benefits convincingly will be essential to winning political support and a precondition for a successful economic flowering.
    Keywords: Transport Economics Policy & Planning,ICT Policy and Strategies,Population Policies,Tertiary Education,Agricultural Knowledge & Information Systems
    Date: 2007–06–01
  7. By: Julien Lévêque (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Inherited from the mid-20th century, the European organization of national railways in state-owned, integrated and few regulated monopolies is not relevant anymore. Although this has been an interesting answer to the problems of externalities, investments and regulation, changes have occurred in technology, demand and economical analysis. In particular, economists have proposed many regulation schemes, which lead the regulators to increase the efficiency of the firms operating on the market. Because of the high costs of rail transportation, governments decide to liberalize the market; in particular, the European Commission and the European Parliament wish the passenger rail market opening. However, some countries, like France, still have not opened their passenger rail market, which is currently monopolized by the historic and national operator, the SNCF. In this paper, we assume that for social, political and economical (economies of density, network externalities) reasons, the regional passenger traffic will remain operated by the SNCF, in the coming years. However, we propose a regulation framework, based on yardstick competition (comparisons of performances), which could encourage the SNCF to improve the efficiency of its regional trains. Yardstick competition consists in estimating what should be the best prices and subsidies, by comparing the performance of several similar and regulated firms, operating on several monopoly markets. If an operator seems to be relatively efficient according to comparisons, it has to be rewarded. On the other hand, an inefficient operator has to be punished, so that the comparison mechanism promotes competition. The paper aims at analysing the introduction of yardstick competition on the French market of regional rail transport operation. We show that the implementation of yardstick competition permits the local regulators to preserve the monopoly of the SNCF and to develop a virtual competition between its local activities. This leads to improve the efficiency of the regional operators and to increase the expertise of the rail regulators. In the first part of the paper, we discuss the implementation of yardstick competition on the French market of regional rail transport operation. First we describe what is called yardstick competition and how it could be implemented on this market. Then, we show that paradoxically to the preservation of the SNCF monopoly, the new market structure of the regional passenger rail transport (regionalized in 2002) is suitable for such an implementation of yardstick competition. In the second part, we examine some theoretical, economical models. On the one hand, we explain why the use of comparisons benefits to the rail regulators (reduction of its capture by the operator, reduction of uncertainty...). On the other hand, we review and discuss some limits of the mechanism (external heterogeneity of the compared operators, investment incentives, and collusion...). In the third part, we present the results of an econometric treatment, estimating the efficiency scores of the regional operators. First, we describe the cost-data base used, before resolving the question of external heterogeneity between the operators. It appears that the only explanatory variable of the external inefficiency is the delinquency rate: in some regions, the operator has to employ more ticket inspectors due to the delinquency. Then we explain the followed methodology and discuss the outcomes of the model. Operators' efficiency scores vary from 0.8 (for the worst) to 1 (for the best). Those internal inefficiencies may be due to sub-optimal spatial organization or employee rotations, the operation of rural trains with two agents although one is sufficient, informational rent or local strikes. Hence, we conclude that yardstick competition could be an original and efficient way of introducing “intramodal” competition in the regional passenger rail market.
    Keywords: Yardstick Competition ; Efficiency ; French Railway System ; Regional Markets
    Date: 2007–06–07
  8. By: J. Ignacio García-Pérez; Yolanda Rebollo
    Abstract: This paper evaluates the effect of regional wage subsidies to foster permanent employment for a sample of temporary and unemployed Spanish workers. We study the transition into permanent employment using a new dataset based on administrative Social Security registers named “La Muestra Continua de Vidas Laborales”, which is used for the first time to carry out policy evaluation exercises in the Spanish labor market. This dataset offers important advantages with respect to the Labour Force Survey, given it offers the complete labor history of the worker. Moreover, since we have individual, regional and time variation in our policy measure, we can apply a difference-in-differences estimator to identify the average treatment effect of this policy. Though, these regional policies have been implemented for almost ten years, as far as we know, this is the first attempt to evaluate them. Our main results are that, in average terms, this policy has positive but small effects on the transition rate into permanent employment either from a temporary contract or from unemployment. The incidence of these subsidies, however, is larger when the worker is in a temporary contract. It is also larger for young females while for old male workers do not have any effect. Measured at the average wage subsidy (5100 Euros) the total change in the entrance probability from a temporary to a permanent contract is around 26% for young women, 24% for middle age ones and 22% for middle age men, the most benefited workers. Nevertheless, since the transition rates to permanent contracts at the same firm are pretty low these relative changes hardly generate a change in the transition probability from a temporary to a permanent contract at the same firm. For instance, in the case of young women the estimated transition probability growths from 0.064% to 0.075% while for middle age men it changes from 0.039% to 0.041%.
  9. By: David Caubel (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Transportation policy issues are important in urban areas since they try to answer growing preoccupations. Nevertheless, do assessment tools enable the evaluation of social equity? In the French case, assessment methodologies - cost-benefit analysis - have been developed to make allowance for more elements. Even if economic and environment aspects could be evaluated for each urban transport system user, analysis does not linger over individual impacts. The question of social equity is either in the background or is not analysed, in both transportation policies and methodologies assessment. However, literature review and decision-maker's speeches on equality show us a re-emergence of the social field in transportation policies. This appears with values of individual “rights” and “chance”. By consequence, we interpret the equal opportunity between individuals by the accessibility concept. Accessibility is one of the basic approaches to the question of the social aspects in transportation policies. In order to take into account for social field and to answer accessibility to what, for whom and how?” indicators based on a “differentiated accessibility” could be established. These indicators would propose a tool that would make it possible to light the decision makers and to account for individual inequalities, considered in terms of chances to profit from the amenities of an urban area that they need to achieve their goals.
    Keywords: Accessibility ; Assessment ; Equity ; Methods ; Social field
    Date: 2007–06–11
  10. By: Nguyen, Ngoc Anh; Nguyen, Thang
    Abstract: Vietnam has been quite sucessful in attracting FDI inflows since the inception of economic reform in 1986. The inflow of FDI has contributed significantly to the economic development of Vietnam. Still, the determinants of FDI inflow and its impacts on the economy of Vietnam are under-researched. In this paper we provide an overview of foreign direct investment (FDI) in Vietnam and attempt to review of the current status of economic research on the determinants of FDI and its impacts on the economy of Vietnam. Our regression analysis of the determinants of FDI spatial distribution across provinces points to the importance of market, labour and infrastructure in attracting FDI. Government policy as measured by the Provincial Competiveness Index (PCI), however, does not seem to be a significant factor at the provincial level. Foreign investors from differenct source countries seem to behave differently in chosing the location of investment.
    Keywords: Foreign Direct Investment; Vietnam; multinationals; spatial distribution;
    JEL: F23 F2
    Date: 2007–06–10
  11. By: Carolyn A. Dehring (Department of Insurance, Legal Studies and Real Estate, The University of Georgia); Craig A. Depken, II (Department of Economics, University of Texas at Arlington); Michael R. Ward (Department of Economics, University of Texas at Arlington)
    Abstract: We propose a methodology that facilitates a direct test of the homevoter hypothesis, which posits that homeowner/voter support for a public good project is positively related to the project’s expected effect on property values. First, we estimate how events that indicate an increasing probability that the public good project will be undertaken impact local residential property values before the referendum is held. These pre-vote impacts are considered noisy signals to homeowners about the market’s assessment of the net marginal benefits of the project. Second, we aggregate these market signals to the precinct level and relate them to precinct-level voting results concerning the proposed project. We apply this method to the 2004 referendum in Arlington, Texas, concerning a publicly subsidized stadium to host the NFL Dallas Cowboys. The analysis supports the homevoter hypothesis and establishes a possible methodology for future evaluations in this small but growing empirical literature.
    Keywords: economic impact, event studies, sports, property values, stadiums
    JEL: R58 H71 L83
    Date: 2007–06
  12. By: Danièle Bloy (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Jean-Michel Cusset (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Nicolas Ovtracht (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: Ce travail s'inscrit dans un programme de recherche du LET qui s'efforce de mieux comprendre les dynamiques spatiales à différentes échelles. Sur un espace concernant quatre départements de Rhône- Alpes, il s'agit, pour nous de mieux comprendre et représenter les interactions entre caractéristiques socio-économiques des communes qui composent cet espace, et les formes de mobilité quotidienne de leurs actifs. Le choix méthodologique a consisté à établir des classements typologiques des 1553 communes : l'un repose sur les distributions statistiques du lieu de travail des résidents et des modes de transport utilisés ; l'autre sur des indicateurs socio-économiques (PCS et revenus). La mise en correspondances de ces typologies, par une analyse factorielle, permet de dégager une classification communale qui croise les deux séries de dimensions, mobilité et socio-économique, et de délivrer une représentation spatiale qui restitue des territoires très homogènes quant à ces deux dimensions. Les représentations cartographiques de ces deux typologies, et de la classification finale, permettent de restituer ces décompositions et recompositions territoriales.
    Keywords: Dynamiques spatiales ; analyse de données ; analyse factorielle ; caractéristiques socio-économiques des communes ; région Rhône-Alpes (France)
    Date: 2007–06–11
  13. By: Erling Røed Larsen and Steffen Weum (Statistics Norway)
    Abstract: The question of whether the housing market is efficient or not is posed by an increasing number of economists, policymakers, current homeowners and prospective homebuyers. This article tests the efficiency hypothesis on data from the Norwegian housing market in its capital, Oslo. We employ the Case-Shiller time-persistence-test on a repeated-sales model of a house price index and returns to housing. Our data cover the period 1991-2002 and comprise 20 752 transactions of same-object-repeated-sales. We explain why certain features, sometimes suppressed in earlier tests, of the data set are of importance in efficiency tests, and argue that ours is particularly well-suited for the purpose. We demonstrate that the repeated-sales house price index contains inertia and time-persistence. In addition, we investigate how the price history of returns; which consist of capital gains, dividends, and interest payments; can be exploited to predict future returns. Both the house price index and housing returns contain forecastable elements, so we reject the null hypothesis of martingale processes, a finding that is indicative of Case-Shiller inefficiency. This discovery is supplemented with an exploration of trading and timing rules by examinations of intra-market and inter-market returns. We show that the housing market consistently yield higher return at lower risk than does the stock market over the period, which is inconsistent with inter-market efficiency.
    Keywords: efficient market hypothesis; excess returns; house prices; housing market; martingale process; risk; time persistency; trading rules
    JEL: C22 C43 D12 E37 G14 R21
    Date: 2007–06
  14. By: Derek Bond (University of Ulster); Michael J. Harrison (Trinity College Dublin); Edward J. O'Brien (European Central Bank)
    Abstract: This paper takes a fresh look at the estimation of economic base multipliers. It uses recent developments in both nonstationary and nonlinear inference to consider issues surrounding the derivation of such multipliers for Northern Ireland. It highlights the problem of distinguishing between nonstationarity and nonlinearity in empirical work. The results of standard unit root and cointegration analysis call into question the adequacy of that framework for estimating employment multipliers. There is strong evidence of nonlinearity; and modelling using random field regression supports the findings of Harrison and Bond (1992) that there is substantial parameter instability or nonlinearity in the data.
    JEL: C22 C52 R12
    Date: 2007–06

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