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

  1. Relative remote rural areas (RRRA)in developed regions: an analysis of the Emilia-Romagna region to support policy decision making. By Zabbini, Enza; Grandi, Silvia; Dallari, Fiorella
  2. The impact of firm-type dominance on regional manufacturing growth By Salvary, Stanley
  3. Long term regional forecasting with spatial equation systems By Wolfgang Polasek; Richard Sellner; Wolfgang Schwarzbauer
  4. Sectoral Agglomeration Economies in a Panel of European Regions By Brülhart, Marius; Mathys, Nicole Andréa
  5. No place like home? Location choice and firm survival after forced relocation in the German machine tool industry By Guido Buenstorf; Christina Guenther
  6. Spatial Growth and Industry Age By Desmet, Klaus; Rossi-Hansberg, Esteban
  7. Spatial Pillage Game By Jung, Hanjoon Michael
  8. An empirical note on growth and convergence across Russian regions By Solanko, Laura
  9. Coastal tourism versus inland Portuguese tourism. The Serra da Estrela tourist destination By Vaz, Margarida; Dinis, Anabela
  10. Cruise Tourism: challenges and opportunities for coastal regional development. The Carribean case of the West Indies. By Grandi, Silvia; Sala, Anna Maria
  11. Inequality at Low Levels of Aggregation in Chile By Claudio Agostini; Phillip Brown
  12. Local Distributional Effects of Government Cash Transfers in Chile By Claudio Agostini; Phillip Brown
  13. Competing in Taxes and Investment under Fiscal Equalization By Hindriks, Jean J.G.; Peralta, Susana; Weber, Shlomo
  14. Economic Integration and Structural Change: The Case of Irish Regions By Edgar Morgenroth

  1. By: Zabbini, Enza; Grandi, Silvia; Dallari, Fiorella
    Abstract: This paper addresses the identification and the analysis of the remote rural areas (RRA) that should be at the center of future regional development policies for periphery areas in averagely highly developed territories, such as the Emilia-Romagna region. However, since none of the areas of the region can be defined lagging or underdeveloped when compared with the EU 25 countries, it is introduced the concept of “Relative” Remote Rural Area (RRRA) which partially could recall the semi-periphery in the theoretical scheme of Immanuel Wallestrein or the trasition area of Friedmann. Methodologically, the investigation is done both by using as a basis an intermediate geographical level that can be considered in line with the NUTS4 one: the SLL (Local Working Systems) identified by the Italian Institute of Statistics (ISTAT), and by a NUTS5-level cluster analysis performed using a selection of indicators, which includes demographic, socio-economic, employment, agricultural, infrastructure and commuting patterns. This work led to the identification and mapping of a set of municipalities that show the higher remote & rural features of the region. The Province of Ferrara resulted the NUTS3 level with the highest RRRA. After a discussion upon the main characteristics of this areas, preliminary policy indications for these territories are given.
    Keywords: remotness; rurality; local working system (SLL); geographical economic analysis; regional policy
    JEL: R12 C88 R15 R58 C30 R14
    Date: 2007–07
  2. By: Salvary, Stanley
    Abstract: Availability of financial capital and location decisions are variables that influence regional manufacturing output. This study maintains that a region’s manufacturing growth depends upon the region’s firm-type dominance. That is, the type of firms that dominate the region’s manufacturing output can be classified as non-local (national or foreign - NF) vs. local and large vs. small. Accordingly, for policy analysis, regions can be classified by firm-type dominance. This distinction is important since, invariably, location decision options and availability of financial capital are more favourable for the larger NF firms than for local firms. In an attempt to assess the impact of firm-type dominance, this study draws upon the dominant industry model which has established that, in any given region, there is a dominant industry (the driving force of the region) to which a region’s manufacturing growth is linked. The information on the impact of firm-type dominance on a region's manufacturing output may enable policy-makers to design workable (or revise existing) manufacturing diversification policies.
    Keywords: state-regions and industry-regions; chemical industry region; regional policy analysis; manufacturing growth; firm-type dominance; availability of financial capital; dominant industry model; manufacturing firms' location decisions; regional economic development; foreign-owned manufacturing plants.
    JEL: R1 R12 R11
    Date: 2007–08–23
  3. By: Wolfgang Polasek (Institute for Advanced Studies,Vienna, Austria and The Rimini Centre for Economic Analysis, Rimini, Italy); Richard Sellner (Institute for Advanced Studies,Vienna, Austria); Wolfgang Schwarzbauer (Institute for Advanced Studies,Vienna, Austria)
    Abstract: Long-term predictions with a system of dynamic panel models can have tricky properties since the time dimension in regional (cross) sectional models is usually short. This paper describes the possible approaches to make long-term-ahead forecast based on a dynamic panel set, where the dependent variable is a cross-sectional vector of growth rates. Since the variance of the forecasts will depend on number of updating steps, we compare the forecasts behavior of a aggregated and a disaggregated updating procedure. The cross section of the panel data can be modeled by a spatial AR (SAR) or Durbin model, including heteroscedasticity. Since the forecasts are non-linear functions of the model parameters we show what MCMC based approach will produce the best results. We demonstrate the approach by a example where we have to predict 20 years ahead of regional growth in 99 Austrian regions in a space-time dependent system of equations.Creation-Date: 200707
    Date: 2007–07
  4. By: Brülhart, Marius; Mathys, Nicole Andréa
    Abstract: We estimate agglomeration economies, defined as the effect of density on labour productivity in European regions. The analysis of Ciccone (2002) is extended in two main ways. First, we use dynamic panel estimation techniques (system GMM), thus offering an alternative methodological treatment of the inherent endogeneity problem. Second, the sector dimension in the data allows for disaggregated estimation. Our results confirm the presence of significant agglomeration effects at the aggregate level, with an estimated long-run elasticity of 13 percent. Repeated cross-section regressions suggest that the strength of agglomeration effects has increased over time. At the sector level, the dominant pattern is of cross-sector "urbanisation" economies and own-sector congestion diseconomies. A notable exception is financial services, for which we find strong positive productivity effects from own-sector density.
    Keywords: Dynamic panel GMM; Employment density; European regions; Productivity
    JEL: R10
    Date: 2007–08
  5. By: Guido Buenstorf (Max Planck Institute of Economics, Evolutionary Economics Group); Christina Guenther (Max Planck Institute of Economics, Evolutionary Economics Group)
    Abstract: We study location choices and firm performance in the German machine tool industry, focusing on the forced migration of East German firms after World War II. Our analysis of location choices supports earlier findings that industry agglomerations attract further entrants. Relocating firms outperformed entrants that possessed no prior industry experience; apparently were able to build on their prewar capabilities. We find no evidence suggesting that firm performance benefited from agglomeration effects.
    Keywords: Capabilities, agglomeration economies, location choice, firm survival, machine tool industry
    JEL: L20 R12 R30
    Date: 2007–08–31
  6. By: Desmet, Klaus; Rossi-Hansberg, Esteban
    Abstract: U.S. county data for the last 20 or 30 years show that manufacturing employment has been deconcentrating. In contrast, the service sector exhibits concentration in counties with intermediate levels of employment. This paper presents a theory where local sectoral growth is driven by technological diffusion across space. The age of an industry -- measured as the time elapsed since the last major general purpose technology innovation in the sector -- determines the pattern of scale dependence in growth rates. Young industries exhibit non-monotone relationships between employment levels and growth rates, while old industries experience negative scale dependence in growth rates. The model then predicts that the relationship between county employment growth rates and county employment levels in manufacturing at the turn of the 20th century should be similar to the same relationship in services in the last 20 years. We provide evidence consistent with this prediction.
    Keywords: industry age; scale dependence; spatial growth; US counties
    JEL: R1
    Date: 2007–08
  7. By: Jung, Hanjoon Michael
    Abstract: A pillage game is a coalitional game that is meant to be a model of Hobbesian anarchy. The spatial pillage game introduces a spatial feature into the pillage game by assuming that players are located in regions. Players can travel from one region to another in one move and can form a coalition and combine their power only with players in the same region. A coalition has power only within its region. Under this spatial restriction, some members of a coalition can pillage less powerful coalitions without any cost. The feasibility of pillages between coalitions determines the dominance relation. Core, stable set, and farsighted core are adopted as alternative solution concepts.
    Keywords: allocation by force; coalitional games; pillage game; spatial restriction; stable set; farsighted core
    JEL: C71 R19
    Date: 2007
  8. By: Solanko, Laura (BOFIT)
    Abstract: This empirical note uses publicly available Goskomstat data to investigate income growth and convergence across Russian regions. Using data for 1992-2001, we find strong sigma divergence simultaneously with beta convergence. he results indicate that per capita income in Russian regions may be converging towards two separate steady states. The poorest regions seem to be converging among themselves, while growth experiences among other regions have been highly heterogeneous.
    Keywords: convergence; divergence; Russia; regions; growth
    Date: 2007–09–06
  9. By: Vaz, Margarida; Dinis, Anabela
    Abstract: This article looks at the Serra da Estrela mountain range as a tourist destination in the context of the inland Portuguese tourist destinations, identifying its direct competitors as well those that complement its tourism offer. We note the changes in national tourist dynamics, with the inland regions growing at a faster rate than the coastal ones. As a tourist destination the Serra da Estrela could benefit from having the Douro (whose growth is greater) and the Central Alentejo regions (the more established inland destination) as allies. Furthermore, the Serra da Estrela needs to increase its competitive profile to compete with the Trás-os-Montes region, which presents similar competitive arguments (rural and mountain destination).
    Keywords: Coastal tourist destinations; inland tourist destinations; comparative advantages; competitive advantages; territorial marketing.
    JEL: R11 M3 L83
    Date: 2007
  10. By: Grandi, Silvia; Sala, Anna Maria
    Abstract: Cruise tourism is rapidly growing in the last ten years worldwide and not just in North America. From a niche market it is becoming an important way to diversify the tourist supply and a stimulus for the coastal regional develoment even if sustainability is challenging. Identifying an itinerary and route, is central both for tour operators and shipowners in order to define a cruise product, and for port authorities in major and marginal places. The Caribbean area has been a precurson of the fenomenom and in this working paper it is presented the case of the West Indies' area with a specific discussion about Barbados.
    Keywords: Cruise Tourism; Coastal Development Economy; Ship Itineraries; Sustainable Development
    JEL: L92 R49 L83
    Date: 2006–09
  11. By: Claudio Agostini (ILADES-Georgetown University, Universidad Alberto Hurtado); Phillip Brown (Colby College, Waterville, Maine, United States and International Food Policy Research Institute, Washington, D.C., United States.)
    Abstract: By all accounts, poverty in Chile has declined dramatically over the last 20 years, with the nacional headcount ratio declining from nearly 40% in 1987 to below 14% in 2006. Due to data limitations, most research on poverty in Chile has focused on national and regional estimates, yet recent improvements in poverty mapping methodologies now enable the analysis of poverty at the sub-regional level. In this paper, we employ these methodologies to assess the impact of cash transfers on poverty rates at the county level. We find that transfers significantly reduce the incidence of poverty and that estimated headcount ratios fall by between 5% and 68%. To better understand variation in the effectiveness of transfers in reducing poverty at the local level, we also explore the interplay between transfers and geography. We find that the greatest reductions in poverty at the county level occur in rural households and that topography influences the effectiveness of transfers in some areas. Taken together, these findings suggest that targeting at low levels of aggregation can help to deliver further reductions in poverty.
    Keywords: inequality, poverty mapping, government subsidies, cash transfers, Chile
    JEL: H53 I32 O15 D63
    Date: 2007–08
  12. By: Claudio Agostini (ILADES-Georgetown University, Universidad Alberto Hurtado); Phillip Brown (Colby College, Waterville, Maine, United States and International Food Policy Research Institute, Washington, D.C., United States.)
    Abstract: Despite rapid economic growth and poverty reduction, inequality in Chile has remained high and remarkably constant over the last 20 years,prompting academic and public interest in the subject. Due to data limitations, however, research on inequality in Chile has concentrated on the national and regional levels. The impact of cash subsidies to poor households on local inequality is thus not well understood. Using povertymapping methods to asses this impact, we find heterogeneity in the effectiveness of regional and municipal governments in reducing inequality via poverty-reduction transfers, suggesting that alternative targeting regimes may complement current practice in aiding the poor.
    Keywords: Inequality, poverty mapping, government cash transfers, Chile
    JEL: H53 I32 O15 D63
    Date: 2007–05
  13. By: Hindriks, Jean J.G.; Peralta, Susana; Weber, Shlomo
    Abstract: The paper considers a model of federation with two heterogeneous regions that try to attract the capital by competing in capital income taxes and public investment that enhance the productivity of capital. Regions' choices determine allocation of capital across the regions and their revenues under a tax sharing scheme. This framework allows for the examination of different approaches to fiscal equalization schemes (Boadway and Flatters, 1982, and Weingast, 2006). We show that tax competition distorts (downwards) public investments and that the equalization grants discourage public investments with a little effect on equilibrium taxes. However, the equalization schemes remain beneficial not only for the federation and, under a low degree of regional asymmetry, also for each region.
    Keywords: equalization; fiscal; fiscal federalism; heterogeneous regions; public investments
    JEL: C72 H23
    Date: 2007–08
  14. By: Edgar Morgenroth (Economic and Social Research Institute (ESRI))
    Date: 2006–11

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