nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒07‒07
eighteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Welfare-maximizing regional government: who benefits from it? By Lapo Valentina
  2. Economic Linkages Across Space By Henry G. Overman; Patricia Rice; Anthony J. Venables
  3. "Disparities in Prices and Income Across German NUTS 3 Regions" By Reinhold Kosfeld; Hans-Friedrich Eckey; Jorgen Lauridsen
  4. Homeownership and Labour Market Behaviour: Interpreting the Evidence By Jan Rouwendal; Peter Nijkamp
  5. A Simple Theory of Industry Location and Residence Choice By Rainald Borck; Michael Pflüger; Matthias Wrede
  6. The Effect of Location on Finding a Job in the Greater Paris Area By Laurent Gobillon; Thierry Magnac; Harris Selod
  7. Tax differentials and agglomeration economies in intraregional firm location By Jordi Jofre-Montseny; Albert Solé-Ollé
  8. Beyond clusters: Fostering innovation through a differentiated and combined network approach By Evert-Jan Visser; Oedzge Atzema
  9. Understanding the spatial organization of agricultural co-operative groups (In French) By Maryline FILIPPI (EGERIE-GRES); Olivier FREY (Coop de France & INRA-SAD); Pierre TRIBOULET (INRA-SAD)
  11. Robust Correlates of County-Level Growth in the U.S. By Matthew J. Higgins; Daniel Levy; Andrew T. Young
  12. Should Urban Transit Subsidies Be Reduced? By Ian W.H. Parry; Kenneth A. Small
  13. Policy Areas Impinging on Elderly Transportation Mobility: An Explanation with Ontario, Canada as Example By Ruben Mercado; Antonio Páez; K. Bruce Newbold
  14. Urban Transport Policies and the Environment: Evidence from Italy By Marco Percoco
  15. Congestion in popular tourist areas: A multi-attribute experimental choice analysis Of willingness-to-wait in amsterdam By Riganti, Patrizia; Nijkamp, Peter
  16. Poverty in the City By Alejandro Grinspun
  17. Inter-CMA Migration of the Immigrants in Canada: 1991-1996 and 1996-2001 By Lei Xu
  18. Characterization and Explanation of the 1996-2001 Inter-CMA Migration of the Second Generation in Canada By Lei Xu

  1. By: Lapo Valentina
    Abstract: Does the purpose of the regional government influence the inter-regional tax competition under spatial concentration? Is the any regional government the effective one? The base of theoretical analyses is the agglomeration theory of new economic geography. It is proposed to build agglomeration model under the inter-regional tax competition, which takes into account the aims of the regional governments, and to test econometrically the tax competition and purposes of the administration in Russian regions
    JEL: R12
    Date: 2007–05–10
  2. By: Henry G. Overman; Patricia Rice; Anthony J. Venables
    Abstract: We develop a diagrammatic framework that can be used to study the economic linkagesbetween regions or cities. Hitherto, such linkages have not been the primary focus of eitherthe theoretical or empirical literatures. We show that our general framework can be used tointerpret both the New Economic Geography and Urban Systems literatures to help usunderstand spatial economic linkages. We then extend the theoretical framework to allow usto consider a number of additional issues which may be particularly important for analyzingthe impact of policy. Such policy analysis will also require empirical work to identify thenature of key relationships. In a final section, we consider what the existing empiricalliterature can tell us about these relationships.
    Keywords: Spatial linkages, Urban systems, New Economic Geography, Urban and regional policy
    JEL: R00 R58
    Date: 2007–06
  3. By: Reinhold Kosfeld (Department of Economics, University of Kassel); Hans-Friedrich Eckey (Department of Economics, University of Kassel); Jorgen Lauridsen (Institute of Public Health, University of Southern Denmark)
    Abstract: In EU countries, knowledge on spatial disparities in overall price level is extremely scarce. When interregional price disparities are large, however, nominal income measures fail to assess prosperity and the catch-up processes of regions. Despite its importance for regional policy, no official regional price statistic is available as a standard. On account of this gap, this paper deals with the econometric estimation of regional price indices for German NUTS 3 regions. Econometric price models for the consumer price index (CPI) and the housing rent index (HRI) are developed on the ground of utility maximization in a two-goods model. The estimated price indices are used to analyse price disparities in the period 1995-2004 across German NUTS 3 regions. Real income comparisons show that the East/West gap is likely to be substantially larger than assessed from incomplete price data in previous studies.
    Keywords: Regional price level, econometric price models, price disparities, real income disparities
    JEL: C21 R13 R31
    Date: 2007–06
  4. By: Jan Rouwendal (Vrije Universiteit Amsterdam); Peter Nijkamp (Vrije Universiteit Amsterdam)
    Abstract: This paper reviews the empirical research that has been generated by Oswald’s thesis, which claims that there is a causal relationship from homeownership to unemployment. The literature confirms a decreasing effect of homeownership on geographical mobility of workers, but does not in general confirm that homeowners have longer unemployment spells or higher unemployment rates. Even though this finding is related to heterogeneity in the labour force and associated selectivity effects, there are clear indications that there is also an effect of homeownership on the search for jobs on the local labour market, especially for highly leveraged homeowners. To offer an integrated representation of the various forces at work, this paper proposes an umbrella model with endogenous search intensity that is consistent with much of the empirical evidence. In particular, it predicts lower geographical mobility of homeowners as well as higher exit rates from unemployment by acceptance of jobs on the local labour market.
    Keywords: thesis; labour market search; homeownership
    JEL: J61 J64 R21 R23
    Date: 2007–06–18
  5. By: Rainald Borck (University of Munich and DIW Berlin); Michael Pflüger (University of Passau, DIW Berlin and IZA); Matthias Wrede (RWTH Aachen University and CESifo)
    Abstract: This paper provides a simple theory of geographical mobility which simultaneously explains people’s choice of residences in space and the location of industry. Residences are chosen on the basis of the utility which mobile households obtain across locations. The spatial pattern of industry is determined by the location decision of a scarce essential factor of production which seeks to obtain the highest possible economic return. Our theory comprehends applications to commuting and physical capital mobility. Referring to the decline in mobility costs, we are able to explain that long-distance commuting and foreign direct investment have increased and that industrial activity has become more concentrated both within as well as across countries.
    Keywords: agglomeration, labour mobility, capital mobility, industry location, migration, commuting
    JEL: F12 F21 F22 R12 R23
    Date: 2007–06
  6. By: Laurent Gobillon (INED); Thierry Magnac (University of Toulouse (GREMAQ, IDEI) and IZA); Harris Selod (INRA-LEA, PSE, CREST and CEPR)
    Abstract: There are large spatial disparities in unemployment durations across the 1,300 municipalities in the Ile-de-France region (Paris Greater Area). In order to characterize these imbalances, we estimate a proportional hazard model stratified by municipality on an exhaustive dataset of all unemployment spells starting in the first semester of 1996. This model allows us to recover a survival function for each municipality that is purged of individual observed heterogeneity. We show that only 30% of the disparities in the observed determinants of the survival rates relate to individual variables. Nearly 70% of the remaining disparities are captured by local indicators, mainly segregation indices.
    Keywords: economic geography, unemployment, duration models, urban economics
    JEL: C41 J64 R23
    Date: 2007–06
  7. By: Jordi Jofre-Montseny (Grup en Federalisme Fiscal i Economia Regional(Institut de Recerca en Economia - IEB), Departament d'Economia Política i Hisenda Pública, Universitat de Barcelona); Albert Solé-Ollé (Grup en Federalisme Fiscal i Economia Regional(Institut de Recerca en Economia - IEB), Departament d'Economia Política i Hisenda Pública, Universitat de Barcelona)
    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: Local taxes, Agglomeration economies, Firm location.
    JEL: R3 H32
    Date: 2007–06
  8. By: Evert-Jan Visser; Oedzge Atzema
    Abstract: Over the past decades, economic and innovation policy across Europe moved in the direction of creating regional clusters of related firms and institutions. Creating clusters through public policy is risky, complex and costly, however. Moreover, it is not necessary to rely on clusters to stimulate innovation. A differentiated and combined network approach to enhancing innovation and stimulating economic growth may be more efficient and effective, especially though not exclusively in regions lacking clusters. The challenge of such a policy is to mitigate the bottlenecks associated with ‘global pipeline’, ‘local buzz’ and ‘stand alone’ strategies used by innovative firms (cf. Bathelt et al. 2004; Atzema & Visser 2005b), and to combine these strategies with a view to their complementarity in terms of knowledge effects. Private and semi-public brokers will be key in the evolving policy, as timely organizational change is crucial for continued innovation, while brokers also need to mitigate governance problems. This requires region-specific knowledge in terms of sectors, life cycles, institutional and socio-cultural factors, and yields spatially differentiated and differentiating adjustment strategies. The role of public policy is to assist in recruiting, provide start-up funding and monitor brokers. With this, policy moves towards a decentralized, process-based, region-specific, spatially diverging and multi-level system of innovation that is geared towards the evolving innovation strategies of firms.
    Keywords: innovation policy, clusters, networks, governance, regionalization
    JEL: R11 R58 O12 O31 O38
    Date: 2007–06
  9. By: Maryline FILIPPI (EGERIE-GRES); Olivier FREY (Coop de France & INRA-SAD); Pierre TRIBOULET (INRA-SAD)
    Abstract: The processes of localization/delocalization of activities attest that space is important in firm’s strategies. Merger and acquisition contributes too modify the spatial organization of firms. This paper aims at analyzing the spatial organization at the level of groups of firms. The conceptual framework combines an analysis in terms of proximity and theories of the firm. We study the co-operative agricultural groups, which are relevant to question the territorial anchoring of the firm. Spatial indicators are proposed and mobilized at different levels of organization of the groups. Results show the importance of territorial anchoring in the strategies of co-operatives heads of the group. However, the development of big co-operative groups could lead to changes in the spatial logics facing a context of globalization.
    Keywords: NAAgricultural cooperatives, Mutualist control, Territorial anchoring
    JEL: C81 G34 Q12
    Date: 2007
  10. By: Andersson, Magnus (European Institute of Japanese Studies); Engvall, Anders (European Institute of Japanese Studies); Kokko, Ari (European Institute of Japanese Studies)
    Abstract: Lao PDR has shown a strong record of economic growth and poverty alleviation since the early 1990s. Yet, the pace of economic development has varied significantly between different parts of the country - the rate of growth was initially faster in more developed areas, but after the mid-1990s growth has been stronger in poorer rural areas. Here it is shown that this pattern of regional development has been driven by the nature of market integration. This is highlighted in three case studies covering: (i) the effect of transport infrastructure and local institutions on domestic consumer good markets; (ii) the process of regional integration with neighboring countries; and (iii) the ability of Lao producers to compete on the world market for coffee.
    Keywords: Laos; Lao PDR; regional development; market integration; infrastructure
    JEL: L11 L66 O12 O18 R11
    Date: 2007–06–01
  11. By: Matthew J. Higgins; Daniel Levy; Andrew T. Young
    Abstract: Higgins et al. (2006) report several statistically significant partial correlates with U.S. per capita income growth. However, Levine and Renelt (1992) demonstrate that such correlations are hardly ever robust to changing the combination of conditioning variables included. We ask whether the same is true for the variables identified as important by Higgins et al. Using the extreme bounds analysis of Levine and Renelt, we find that the majority of the partial correlations can be accepted as robust. The variables associated with those partial correlations stand solidly as variables of interest for future studies of U.S. growth.
    Date: 2007–05
  12. By: Ian W.H. Parry (Resources for the Future); Kenneth A. Small (Department of Economics, University of California-Irvine)
    Abstract: This paper derives intuitive and empirically useful formulas for the optimal pricing of passenger transit and for the welfare effects of adjusting current fare subsidies, for peak and off-peak urban rail and bus systems. The formulas are implemented based on a detailed estimation of parameter values for the metropolitan areas of Washington (D.C.), Los Angeles, and London. Our analysis accounts for congestion, pollution, and accident externalities from automobiles and from transit vehicles; scale economies in transit supply; costs of accessing and waiting for transit service as well as service crowding costs; and agency adjustment of transit frequency, vehicle size, and route network to induced changes in demand for passenger miles. The results support the efficiency case for the large fare subsidies currently applying across mode, period, and city. In almost all cases, fare subsidies of 50% or more of operating costs are welfare improving at the margin, and this finding is robust to alternative assumptions and parameters.
    Keywords: Transit subsidies; Scale economies; Traffic congestion; Welfare effects
    JEL: R48 H21
    Date: 2007–05
  13. By: Ruben Mercado; Antonio Páez; K. Bruce Newbold
    Abstract: As countries face the challenges posed by rising numbers of older persons, the need to reassess their respective policies to address transport needs in aging societies is increasingly recognized in relation to health and sustainability goals. This paper proposes the examination of six interrelated policy areas affecting elderly mobility in a country or administrative region. A general survey of policy developments in each of these areas could improve current strategies and existing processes in the planning and implementation of mobility services that will be responsive to both elderly and the general population now and in the future. These include: 1) general transport policy framework; 2) travel mode preference; 3) alternative transport infrastructure stock and investments; 4) housing-land-use-transportation linkage; 5) research and technology applications that improve travel mode and environment; and 6) institutional and legal reforms. These policy areas are discussed and given concrete elucidation in the case of Ontario, Canada. Reflections and recommendations for further research and policy action deemed critical in the case region are highlighted.
    Keywords: transportation, aging, regional policy, Canada
    JEL: R42 R58
    Date: 2007–05
  14. By: Marco Percoco (Bocconi University)
    Abstract: The paper reviews urban transport policies in Italian cities and their impact on the concentration of NO2 and PM10. Using parametric and non-parametric techniques, it finds no significant effect of the policy actions currently implemented. Further, it finds evidence of a weak positive impact of plans adoption. These results are interpreted as evidence of positive externalities among actions. Finally, by also discussing case studies, the paper points out the absence of economic instruments and argues that significant welfare gains would derive from their adoption.
    Keywords: Urban Transport Policies, Traffic Externalities, Pollution Abatement
    JEL: Q53 R41
    Date: 2007–05
  15. By: Riganti, Patrizia (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Nijkamp, Peter
    Abstract: Many mature and popular tourist destinations are attracting large volumes of tourist flows. Especially during peak periods this may lead to congestion phenomena in different areas of tourist cities. This paper presents the results of a tourist survey carried out in the city centre of Amsterdam, during the high tourist season (2006), when congestion phenomena are clearly present. In addition to a descriptive and exploratory statistical analysis based on multi-attribute choice analysis, the paper also presents the findings from a statistical choice experiment based on the concept of willingness-to-accept tourism congestion. Various interesting results are discussed, with a specific focus on the question how these results can feed into the policy debate to manage congestion in mature cultural destinations.
    Date: 2007
  16. By: Alejandro Grinspun (International Poverty Centre)
    Abstract: .
    Keywords: Poverty, City, Rocinha, Human Development Index, Life Expectancy at Birth
    JEL: B41 D11 D12 E31 I32 O54
    Date: 2005–08
  17. By: Lei Xu
    Abstract: Based on the tabulations of the IMDB, I characterized, explained and compared the 1991-1996 and 1996-2001 inter-CMA migration of the immigrants in Canada. The spatial and temporal patterns were consistent with the neoclassical economic theory and the ethnic enclave theory. In making their decisions on departure and destination choices, the immigrants (both the 1991 landing cohort and 1996 cohort) were responsive to income and employment incentives, as well as the retaining and attracting powers of ethnic communities. This research also discovered an interesting temporal pattern -- while the inter-CMA migration of immigrants accentuated the over representation of the immigrants in Toronto and Vancouver in the 91-96 period, the rise of the “secondary” CMAs led to a spatial dispersal of the immigrants in the 96-01 period. This “new” finding supplements the existing literature on internal migration of Canadian immigrants, which discovered little evidence of an increased dispersion of immigrants over time.
    Keywords: internal migration, immigrants, Canada, Census Metropolitan Area (CMA)
    JEL: R23 F22 O15 J11
    Date: 2007–05
  18. By: Lei Xu
    Abstract: Based on the primary micro data files of the 2001 Canadian census, I investigated the 1996-2001 internal migration patterns of the 2nd generation, in comparison to those of the 1st, 1.5, and 3rd+ generations. In the descriptive analysis, I found that the overall out-migration rate increased monotonically with an increase in generation status. However, with the exception of Toronto, Vancouver and Calgary, the CMA specific out-migration rate generally decreased with an increase in generation status. In terms of in-migration, Toronto, Vancouver, and Calgary were the predominant destinations for all generations. In the multivariate analysis, I found that the different generations were subject to the effects of the same set of explanatory factors -- labor market factors, ethnic similarity factor, and personal factors. Compared to the first generation immigrants, the second generation was less dependent on ethnic communities and more sensitive to the changing spatial economy of the CMA system.
    Keywords: internal migration, second generation, immigrants, Canada
    JEL: R23 F22 O15 J11
    Date: 2007–05

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