nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒11‒03
six papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Spatial Pattern of FDI: Some Testable Hypotheses By Pamela Bombarda
  2. Entrepreneurship and the City By Edward L. Glaeser
  3. Thick-market effects and churning in the labor market: evidence from U.S. cities By Hoyt Bleakley; Jeffrey Lin
  4. Hedonic Imputed Housing Price Indices from a Model with Dynamic Shadow Prices Incorporating Nearest Neighbour Information By Harry Cominos; Alicia Rambaldi; D.S. Prasada Rao
  5. Inégalités et clubs de convergence : les résultats d'un modèle à seuil By Karim Azizi
  6. House Prices and Employment Reallocation: International Evidence By Bover, Olympia; Jimeno, Juan Francisco

  1. By: Pamela Bombarda (IUHEI)
    Abstract: This paper is a simple extension of the standard FDI model of Markusen and Horstmann (1992). This latter predicts firms would supply nearby markets with exports but far away markets with FDI. Nevertheless, this does not match the spatial pattern in the data for many home nations and industries. We propose a model with heterogeneous firms where the spatial pattern of FDI depends upon distance-linked communications costs as well as trade costs; the resulting model lines up both with the aggregate knowledge-capital model evidence and the firm-level evidence of Helpman-Melitz-Yeaple, while still allowing individual firms to engage in FDI in nearby markets while supplying distant markets via exports.
    Date: 2007–10
  2. By: Edward L. Glaeser
    Abstract: Why do levels of entrepreneurship differ across America's cities? This paper presents basic facts on two measures of entrepreneurship: the self-employment rate and the number of small firms. Both of these measures are correlated with urban success, suggesting that more entrepreneurial cities are more successful. There is considerable variation in the self-employment rate across metropolitan areas, but about one-half of this heterogeneity can be explained by demographic and industrial variation. Self-employment is particularly associated with abundant, older citizens and with the presence of input suppliers. Conversely, small firm size and employment growth due to unaffiliated new establishments is associated most strongly with the presence of input suppliers and an appropriate labor force. I also find support for the Chinitz (1961) hypothesis that entrepreneurship is linked to a large number of small firms in supplying industries. Finally, there is a strong connection between area-level education and entrepreneurship.
    JEL: R0
    Date: 2007–10
  3. By: Hoyt Bleakley; Jeffrey Lin
    Abstract: Using U.S. Census microdata, the authors show that, on average, workers change occupation and industry less in more densely populated areas. The result is robust to standard demographic controls, as well as to including aggregate measures of human capital and sectoral mix. Analysis of the displaced worker surveys shows that this effect is present in cases of involuntary separation as well. On the other hand, the authors actually find the opposite result (higher rates of occupational and industrial switching) for the subsample of younger workers. These results provide evidence in favor of increasing-returns-to-scale matching in labor markets. Results from a back-of-the-envelope calibration suggest that this mechanism has an important role in raising both wages and returns to experience in denser areas.
    Keywords: Labor market
    Date: 2007
  4. By: Harry Cominos; Alicia Rambaldi; D.S. Prasada Rao (CEPA - School of Economics, The University of Queensland)
    Date: 2007
  5. By: Karim Azizi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: Cet article examine l'éventualité d'un phénomène de convergence locale en mettant notamment l'accent sur une variable d'inégalité dans la distribution des revenus et richesses. A l'aide d'un modèle à seuil, deux variables de transition (stock de capital humain et inégalités) sont identifiées. Trois régimes sont mis en évidence. Pour deux d'entre eux, la relation entre inégalités et croissance est négative. En outre, au sein de ces clubs, les économies ne convergent pas. En revanche, pour le dernier régime, la relation entre inégalités et croissance n'est pas significative et on observe un phénomène de convergence absolue. Plus généralement, nous concluons à l'existence d'équilibres multiples. Ce résultat permet d'expliquer les conclusions antinomiques présentes dans la littérature, selon lesquelles la relation entre inégalités et croissance serait tantôt croissante et tantôt décroissante.
    Keywords: Inégalités, clubs de convergence, modèle à seuil.
    Date: 2007–10
  6. By: Bover, Olympia; Jimeno, Juan Francisco
    Abstract: Over the last decade house prices increased remarkably in many countries. However, while in several countries there was an employment boom in the construction sector, in others the share of employment in this sector did not significantly change. In this paper we estimate a model of labour demand in the construction sector, featuring building constraints, which explains many of the international differences in the response of sectoral reallocation of employment to house prices. Countries with more building possibilities (Spain, Sweden and the US) have a high sectoral reallocation of employment, and display larger elasticities of labour demand in the construction sector with respect to house prices than countries that seem to have fewer building possibilities (Belgium, the Netherlands, and the UK). Nevertheless, our estimates imply that, for the whole economy, the elasticity of labour demand with respect to house prices is broadly similar across countries.
    Keywords: House prices; labour demand; sectoral reallocation of labour
    JEL: J23 R32
    Date: 2007–10

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