nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒07‒13
fourteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. What When Space Matters Little For Firm Productivity? A multilevel analysis of localised knowledge externalities By Otto Raspe; Frank van Oort
  2. Tax Differentials and Agglomeration Economies in Intraregional Firm Location By Jordi Jofre Monseny; Alberto Sole Olle
  3. Creativity and Industrial Cities: A Case Study of Baltimore By Zoltan J. Acs; Monika I. Megyesi
  4. The Localization of Entrepreneurship Capital - Evidence from Germany By David B. Audretsch; Max Keilbach
  5. Specific resources as bases for the differentiation and innovation of tourist destinations By Vaz, Margarida
  6. La citta' come "sistema progressivo": evoluzione strutturale e sviluppo economico By Antonio G. CALAFATI
  7. A Unified Framework for Measuring Preferences for Schools and Neighborhoods By Patrick Bayer; Fernando Ferreira; Robert McMillan
  8. Urban Transportation Policy: A Guide and Road Map By Kenneth A. Small
  9. Toward a regionalisation of industrial policy: the case of French aerospace industry in Aquitaine (In French) By Vincent FRIGANT (GREThA)
  10. Convergence in Income Inequality: the Case of Brazilian Municipalities By Gomes, Fábio A. R.
  11. Assessing the Behaviour of Non-Survey Methods of Constructing Regional Input-Output Tables through a Monte Carlo Simulation By Francesco CHELLI; Andrea BONFIGLIO
  12. Is there an Environmental Urban Kuznets Curve? The case of polluting emissions due to daily mobility in 37 cities. (In French) By André MEUNIE (GREThA); Guillaume POUYANNE (GREThA)
  13. Understanding the Regional Contribution of Higher Education Institutions: A Literature Review By Peter Arbo; Paul Benneworth
  14. Cost-benefit rules for transport projects when labor supply is endogenous and taxes are distortionary By Fosgerau, Mogens; Pilegaard, Ninette

  1. By: Otto Raspe; Frank van Oort
    Abstract: This paper contributes to the debate on localized knowledge externalities as potential source for firm productivity gains. We apply multilevel analysis to link firm productivity (and growth) to knowledge intensive spatial contexts in the Netherlands. If localized knowledge externalities are important, then firms are hypothesised to co-locate in order to capitalize on each other's knowledge stocks. We conceptualise the regional knowledge base by three dimensions: local 'research and development' intensity, local 'innovativeness', and the characterization of locations by a ‘knowledge workers’ dimension (based on ICT use, educational level, communicative and creative skills). Controlling for firm's heterogeneity, we find a relatively small spatial effect: regional characteristics contribute for only a few percents to firm productivity. The regional intensity of 'innovation' most significantly contributes to this effect. We do not find a contextual spatial effect for productivity growth. These results suggest that the territorial dimension of knowledge externalities should not be exaggerated.
    Keywords: productivity, multilevel analysis, localized knowledge externalities, Netherlands
    Date: 2007–06
  2. By: Jordi Jofre Monseny; Alberto Sole Olle (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: agglomeration economies, local taxes, firm location
    JEL: H32 R3
    Date: 2007
  3. By: Zoltan J. Acs (George Mason University; Max Planck Institute of Economics, Jena, Germany); Monika I. Megyesi (University of Baltimore)
    Abstract: Creativity is changing the way cities approach economic development and formulate policy. Creative metropolises base their economic development strategies, at least partly, on building communities attractive to the creative class worker. While there are countless examples of high-tech regions transforming into creative economies, traditionally industrial cities have received much less attention in this regard. This research draws on Baltimore to assess the potential of transforming a traditionally industrial region into a creative economy. It analyses Baltimore's performance on dimensions of talent, tolerance, technology, and territory both as a stand-alone metropolitan area and in comparison to similar industrial metropolises. Using data from the US Census Bureau and research on creativity measures, this case study concludes that Baltimore has the opportunity to capitalize on the creative economy because of its openness to diversity, established technology base, and appealing territorial amenities. An important consideration in the transformation towards a creative economy is Baltimore's geographic proximity and access to the largest reservoir of creative talent in the US: Washington, DC.
    Keywords: creativity, creative class, creativity index, creative cities, talent, technology, tolerance, territory, bohemian index, gay index, old industrial cities, Baltimore, economic development, economic growth, entrepreneurship
    JEL: D64 M13 M14
    Date: 2007–07–02
  4. By: David B. Audretsch (Max Planck Institute of Economics, Jena, Germany; Indiana University, USA); Max Keilbach (Max Planck Institute of Economics, Jena, Germany)
    Abstract: Whereas initially physical capital and later, knowledge capital were viewed as crucial for growth, more recently a very different factor, entrepreneurship capital, has emerged as a driving force of economic growth. In this paper, we define a region's capacity to create new firms start-ups as the region's entrepreneurship capital. We then investigate the local embeddedness of this variable and which variables have an impact on this variable. Using data for Germany, we find that knowledge-based entrepreneurship capital is driven by local levels of knowledge creation and the acceptance of new ideas, indicating that local knowledge flows play an important role. Low-tech entrepreneurship capital is rather increased by regional unemployment and driven by direct incentives such as subsidies. All three measures are locally clustered, indicating that indeed, entrepreneurship capital is a phenomenon that is driven by local culture, and is therefore locally bounded.
    Keywords: Entrepreneurship capital, Local Clusters, Knowledge Spillovers, Spatial Econometrics
    JEL: L60 O30 G30
    Date: 2007–07–02
  5. By: Vaz, Margarida
    Abstract: Given that one type of tourist does not exist and different strategies are drawn to reach the wished "extraordinary" by tourists for holidays, there are windows of opportunities to the tourist destinations, as these give them the chance for differentiated offers and for a flexibility that opposes uniformity and gives place to variety and difference. Assuming that the development of the destinations do not obey to just a standard way, and alternatively is embedded in the historical, cultural, institutional and natural matrices of the regions where destinations are anchored, then the specific resources of a place can assume the basic role of inputs for the differentiation of the tourist destination and for the diversification of its tourist offers. Taking into account the exceptionality of tourist product as an experience, which is associated with an integrated experience offer, one can say that an idiographic perspective of a destination requires that the valuation of its specific resources pass not only for the tourist services providers to assume themselves as agents who facilitate the stay and the mobility of the tourists, but also that they need to become ambassadors of all the kind of services of the destination as well as of the region itself. Such tourist destination generates change. As it generates differentiated strategies at the regional level and as it is based on co-operation and network, these strategies and related facts make the environment propitious to the dissemination of knowledge and innovation. Innovation, in turn, generates difference, that strengthens the identity of the region, and potentially, of the tourist destination. Such strategies of differentiation, in a sustainable development frame, can be the turning point for a more selective tourist industry, and where all can win: the local communities, the tourists, the tourist agents, and the environment.
    Keywords: Specific resources; idiographic approach; innovation; tourist destination; sustainability; regional development
    JEL: L83 R11
    Date: 2007
  6. By: Antonio G. CALAFATI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: [ITALIANO] - Utilizzando come punto di partenza la "teoria dei sistemi (progressivi)" - e assegnando alla relazione causale struttura-prestazioni un ruolo centrale - questo lavoro delinea una prospettiva metodologica per lo studio dello sviluppo economico delle citta'. La prospettiva proposta conduce a spostare il focus scientifico dell'economia urbana sull'identificazione della "struttura" e sull'analisi della "evoluzione strutturale" delle citta'. Inoltre, trattandosi di sistemi aperti, l'evoluzione strutturale viene valutata rispetto ai cambiamenti del contesto relazionale ("ambiente") delle citta'. Studiare le determinanti della traiettoria di sviluppo economico di una citta' significa, quindi, studiare l'evoluzione della sua struttura, riconducendola all'interagire di un insieme di meccanismi evolutivi, ciascuno con la sua logica, i quali devono essere esaminati in modo concreto piuttosto che astratto.;[ENGLISH] - By moving from the theory of "progressive systems" - and assigning to the causal relationship "structure-performances" a key role - this paper outlines a methodological perspective to study the economic development of cities. The proposed perspective leads to shift the scientific focus of urban economics to the identification of the "structure" and the analysis of the "structural evolution" of cities. Moreover, being cities - as any other complex system - an "open system", its structural evolution has to be evaluated with regard to its changing "environment". To study the development trajectory of city means, therefore, to study the evolution of its structure, which is the emerging outcome of the interplay of a constellation of adjustment mechanisms, each with its own rationale, which have to be examined with a substantive rather than a formal approach.
    Keywords: citt…, economia urbana, sviluppo economico, teoria dei sistemi
    JEL: R10 R11
    Date: 2007–06
  7. By: Patrick Bayer; Fernando Ferreira; Robert McMillan
    Abstract: This paper develops a comprehensive framework for estimating household preferences for school and neighborhood attributes in the presence of sorting. It embeds a boundary discontinuity design in a heterogeneous model of residential choice to address the endogeneity of school and neighborhood attributes. The model is estimated using restricted-access Census data from a large metropolitan area, yielding a number of new results. First, households are willing to pay less than one percent more in house prices -- substantially lower than previous estimates -- when the average performance of the local school increases by five percent. Second, much of the apparent willingness to pay for more educated and wealthier neighbors is explained by the correlation of these sociodemographic measures with unobserved neighborhood quality. Third, neighborhood race is not capitalized directly into housing prices; instead, the negative correlation of neighborhood race and housing prices is due entirely to the fact that blacks live in unobservably lower quality neighborhoods. Finally, there is considerable heterogeneity in preferences for schools and neighbors: in particular, we find that households prefer to self-segregate on the basis of both race and education.
    JEL: H0 H4 H72 R0 R21 R31
    Date: 2007–07
  8. By: Kenneth A. Small (Department of Economics, University of California-Irvine)
    Abstract: The main transportation issues facing cities today fall into familiar categories--congestion and public transit. For congestion, there is now a far richer menu of options that are understood, technically feasible, and perhaps politically feasible. One can now contemplate offering roads of different qualities and prices. Many selected road segments are now operated by the private sector. Road pricing is routinely considered in planning exercises, and field experiments have made it more familiar to urban voters. Concerns about environmental effects of urban trucking have resulted in serious interest in tolled truck-only express highways. As for public transit, there is a need for political mechanisms to allow each type of transit to specialize where it is strongest. The spread of “bus rapid transit” has opened new possibilities for providing the advantages of rail transit at lower cost. The prospect of pricing and privatizing highway facilities could reduce the amount of subsidy needed to maintain a healthy transit system. Privately operated public transit is making a comeback in other parts of the world. The single most positive step toward better urban transportation would be to encourage the spread of road pricing. A second step, more speculative because it has not been researched, would be to use more environmentally-friendly road designs that provide needed capacity but at modest speeds, and that would not necessarily serve all vehicles.
    Keywords: Transportation policy; Road pricing; Privatization; Product differentiation
    JEL: R4
    Date: 2007–06
  9. By: Vincent FRIGANT (GREThA)
    Abstract: NAIn this paper, we examine the hypothesis of the increasing role of regional level for designing and driving industrial politics in France. We consider the case of aerospace industry and Aquitaine region. We adopt a historical approach, and consider three key periods. The first corresponds to the initial localizations of aerospace plants in Aquitaine: between WWI and sixties. Then we consider the nineties when the Aquitaine industry –essentially defence oriented- enters into crisis. The third period concerns the current years. This historical approach shows that the region is now a key actor for the local aerospace plants. It’s a new phenomenon. In the two first periods, the State oriented closely the development of this strategic industry; now the Aquitaine institutions are major sources for supporting the local enterprises. In conclusion, we stress some limits of the regionalisation process.
    Keywords: Aerospace industry ; Aquitaine ; Industrial policy ; Regional development
    JEL: L62 L64 L52 R38 R58 N64
    Date: 2007
  10. By: Gomes, Fábio A. R.
    Date: 2007–10
  11. By: Francesco CHELLI (Universita' Politecnica delle Marche, Dipartimento di Economia); Andrea BONFIGLIO ([n.a.])
    Abstract: The paper aims to analyse the tendency of a battery of non-survey techniques of constructing regional I-O tables to over-(under-)estimate impact. The behaviour of the regionalization methods is assessed relatively to the techniques analysed. For this aim, a Monte Carlo simulation has been carried out. Then, a multidimensional scaling procedure has been applied to search for a common and repeated structure of differences among the methods and to give an immediate picture of possible implications, in terms of impact direction, coming from the choice of a given regionalisation method rather than another. Afterwards, the results have been compared to those obtained by applying the same procedure to 2000 I-O tables, which have been mechanically constructed for the 20 Italian regions. The results indicate that the choice of the regionalization method is crucial in estimating multipliers. According to the chosen method, the extent of multipliers could be considerably bigger or lower. This can have serious repercussions in terms of policy choices and, therefore, policy makers and I-O analysts should be aware of it. In addition, the results have confirmed a tendency of the methods to over-(under)-estimate impact both statistically and empirically. However, they have also shown that sectoral aggregation can reverse this tendency. Finally, from an economic point of view, it turned out that the most recent Flegg et al. Location Quotient (Flegg et al., 1995; Flegg and Webber, 1997) is the best to represent regional economies.
    Keywords: Monte Carlo simulation, impact analysis, multidimensional scaling procedure, non-survey techniques, regional policy
    JEL: C15 C67 R15
    Date: 2007–06
  12. By: André MEUNIE (GREThA); Guillaume POUYANNE (GREThA)
    Abstract: The Environmental Kuznets Curve (EKC) has given rise to a flourishing literature since the beginning of the 90’s. The EKC postulates an inverted U-shaped relationship between income and polluting emissions: there would be a level of wealth beyond which polluting emissions would decrease. Surprisingly, this issue has rarely been applied to the cities. Yet we consider such a question as a pertinent one. This article aims at analyzing the Urban EKC (UEKC) hypothesis. It tests it with a sample of 37 cities in the world. Previous studies on the UEKC hypothesis are very scarce. They are the ground for us, to define a specific methodological posture. First, we use polluting emissions per capita instead of pollutants concentrations: thus we control for the influence of urban size. Second, we only take in account pollutants due to a unique source, which is daily mobility. This makes the explanation of the income-polluting emissions relation easier, as our comments are based on a specific, well constituted literature about factors of daily mobility. We expose the theoretical mechanisms by which the UEKC due to daily mobility could be validated. The impact of income on polluting emissions is threefold : behavioural, with a direct effect and an indirect one ; technical (the environmental efficiency of the vehicles increases) ; political (planning authorities wish to evolve towards a « sustainable mobility »). The empirical part of the paper is a test of the UEKC on a sample of 37 cities in the world. We present three important results. First, the estimation of quadratic regressions gives an inverted U-shaped relationship for most of the pollutants, which doesn’t permit to invalidate the UEKC hypothesis. Second, we show that the explanation of such curves is linked to two sets of factors: individual behaviours (e.g. modal choice) and collective choices (e.g. transit supply). Third, we discuss the validity of the UEKC hypothesis, that is we seek to explain the level of polluting emissions. As many factors are entangled, we use a principal components analysis to show that the influence of income may in fact reflect the influence of both urban form and consumers’ habits on polluting emissions due to daily mobility.
    Keywords: Environmental Kuznets Curve ; daily mobility ; urban ; polluting emissions
    JEL: Q53 Q56 R12 R14 R41
    Date: 2007
  13. By: Peter Arbo; Paul Benneworth
    Abstract: The contribution of higher education institutions to regional development is a theme that has attracted growing attention in recent years. Knowledge institutions are increasingly expected not only to conduct education and research, but also to play an active role in the economic, social and cultural development of their regions. The extent to which higher education institutions are able to play this role depends on a number of circumstances: the characteristics of the institutions, the regions in which they are located and the policy frameworks are all significant. At the same time, there are signs of more fundamental conceptual and strategic confusion. The discussions in this domain are frequently characterised by slogans and popular metaphors. This literature review was prepared to support the OECD project entitled 'Supporting the Contribution of Higher Education Institutions to Regional Development', which was conducted by the OECD Programme on Institutional Management in Higher Education (IMHE) in collaboration with the Directorate of Public Governance and Territorial Development. Drawing mainly from a selection of European and North American publications, the report takes an overall view on the development of higher education institutions in the regional context. It focuses on the evolution and discourses of higher education and research, the regional aspects of higher education policies, the various functions and roles that the institutions play, measures taken to link the universities with their regional partners, and the conditions which favour or hamper stronger regional engagement. <BR>La contribution de l'enseignement supérieur au développement régional suscite depuis plusieurs années un intérêt toujours croissant. De plus en plus, on attend des institutions en charge du savoir non seulement qu'elles mènent les activités liées à l'enseignement et à la recherche, mais aussi qu'elles prennent une part active au développement économique, social et culturel de leur région. La marge de manoeuvre dont disposent les établissements d'enseignement supérieur pour remplir ce rôle varie selon certains facteurs : les caractéristiques de l'établissement, la région et le cadre politique dans lesquels il s'inscrit sont autant de critères significatifs. Par ailleurs, on identifie également les signes d'une confusion conceptuelle et stratégique plus profonde, les débats sur ce sujet étant souvent caractérisés par les slogans et les métaphores populaires. Cette analyse bibliographique a été préparée en soutien au projet de l'OCDE intitulé « Appuyer la contribution des institutions d'enseignement supérieur au développement régional », mené par le Programme de l'OCDE sur la gestion des établissements d'enseignement supérieur (IMHE) en coopération avec la Direction de la gouvernance publique et du développement territorial. À partir d'une sélection de publications principalement européennes et nord-américaines, ce rapport adopte une vue d'ensemble sur le développement des établissements d'enseignement supérieur dans le contexte régional. Il cible notamment l'évolution et les débats dans l'enseignement supérieur et la recherche, le volet régional des politiques d'enseignement supérieur, les divers fonctions et rôles que remplissent les établissements, les mesures prises pour relier les universités à leurs partenaires régionaux, ainsi que les conditions qui favorisent ou freinent un engagement régional plus marqué.
    Date: 2007–07–09
  14. By: Fosgerau, Mogens; Pilegaard, Ninette
    Abstract: We embed a stylized traffic model within a general equilibrium model in which labor supply is endogenous and income taxes are distortionary. Within this framework we derive simple rules for performing a cost-benefit analysis that can be applied knowing only the output of the traffic model and a factor that accounts for the labor market distortion in a consistent manner. Thus the rules that we derive should be applicable in the large number of cost-benefit analyses that are performed based on the output of traffic models. Such analyses are routinely performed and guide the allocation of a large share of public investment in many countries of the world as well as the assessment of policies such as road user charging. We find that the rules for leisure transport are exactly the same as in a conventional CBA that includes the marginal cost of public funds. For business travel and commuting we find new rules as a result of the assumption that transport costs have the same distortionary effect as income taxes.
    Keywords: Cost-benefit; Transport; General Equilibrium
    JEL: R42 H40
    Date: 2007–06–18

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