nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒11‒10
eighteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Related variety and regional growth in Italy By Ron Boschma; Simona Iammarino
  2. Why Does the Effect of New Business Formation Differ Across Regions? By Michael Fritsch; Alexandra Schroeter
  3. Disparities in Labor Market Outcomes across Geopolitical Regions in Nigeria: Fact or Fantasy? By Ruth Uwaifo Oyelere
  5. Cluster Life Cycles - Dimensions and Rationales of Cluster Development By Max-Peter Menzel; Dirk Fornahl
  6. On the dynamics of knowledge generation and trust building in regional innovation networks. A multi method approach By Maria Daskalakis; Martina Kauffeld-Monz
  7. Urban crime and labor mobility By Subhayu Bandyopadhyay; Christopher H. Wheeler
  8. Multi-interregional economic impact analysis based on multiinterregional input output model consisting of 7 regions of Vietnam, 2000 By Bui Trinh; Mai Quynh Nga; Duong Manh Hung; Kwang Moon Kim
  9. Tradable driving rights in urban areas: their potential for tackling congestion and traffic-related pollution By Charles Raux
  10. Innovation across U.S. industries: the effects of local economic characteristics By Gerald A. Carlino; Robert M. Hunt
  11. Understanding Recent Trends in House Prices and Home Ownership By Robert J. Shiller
  12. The Effects of Immigration on US Wages and Rents: A General Equilibrium Approach By Ottaviano, Gianmarco I P; Peri, Giovanni
  13. Do House Prices Reflect Fundamentals? Aggregate and Panel Data Evidence By Vyacheslav Mikhed; Petr Zemcik
  14. Regional spatial planning assessments for adaptation to accelerated sea level rise - an application to Martinique’s coastal zone By Christine Schleupner
  15. Testing for Bubbles in Housing Markets: A Panel Data Approach By Vyacheslav Mikhed; Petr Zemcik
  16. Demographic, Social and Economic Changes in Tharparkar (1988-2006) - An Analysis By Rajar, Allah Wasayo; Herani, Gobind; Dhakan, Ali Akbar
  17. Politique de cohésion et développement régional By Henri Capron
  18. How to Promote Repeaters? Empirical Analysis of Tourist Survey Data in Kansai Region By Kaoru Okamura; Mototsugu Fukushige

  1. By: Ron Boschma (Utrecht University); Simona Iammarino (SPRU, University of Sussex)
    Keywords: agglomeration economies, related variety, regional growth
    JEL: R11 R12 O18
    Date: 2007–09–01
  2. By: Michael Fritsch (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Alexandra Schroeter (Friedrich Schiller University Jena, Faculty of Economics and Business Administration)
    Abstract: We investigate regional differences of the effect of new business formation on employment growth in West Germany. We find an inverse ‘u’-shaped relationship between the level of start-up activity and employment change. The main variables that shape the employment effects of new businesses in a region are population density, the share of medium level skilled workers, the proportion of Research and Development conducted in small businesses (entrepreneurial technological regime), the unemployment rate as well as the degree of specialization of the regional economy. However, indicators for education and innovation activity in the region proved not to be statistically significant. Conducting our analysis for manufacturing and services separately confirmed the pattern of our previous results only for manufacturing but not for services.
    Keywords: Entrepreneurship, new business formation, regional development, entrepreneurship policy
    JEL: M13 O1 O18 R11
    Date: 2007–10–30
  3. By: Ruth Uwaifo Oyelere (Georgia Institute of Technology and IZA)
    Abstract: Differences in geopolitical regions of Nigeria are not debatable. However, there is no clear consensus on the dimension of these disparities. In this paper, claims of geopolitical region disparities in labor market outcomes are investigated using survey data from Nigeria between 1996-1999. Both descriptive and econometric analysis are used to test the null hypothesis that there are no significant regional differences in labor market outcomes in Nigeria. The results are surprising given the anecdotal evidence and general perception of disparities along this dimension. First, similar mean incomes across regions in Nigeria were noted. In addition, returns to education were not significantly different for Northern and Southern Nigeria. Given these findings, the null hypothesis cannot be rejected. There is no evidence of significant disparities in labor market outcome across geopolitical regions in Nigeria.
    Keywords: regional disparities, labor market outcomes, Nigeria, returns to education, inequality
    JEL: O5 I0 J70 O18
    Date: 2007–09
  4. By: Jorge E, Mendoza
    Abstract: The study focuses on the analysis of economic growth of the Latin American countries, during the period 1950-2000 The methodology of the paper is based on the use of spatial econometric thechniques applied to a cross section and panel data. The results showed conditional convergence for the region from 1950 to 1975, and both absolute and conditional divergence from 1980 to 2000.
    Keywords: Convergence; Latin America
    JEL: O38 O16 O54 O11
    Date: 2007
  5. By: Max-Peter Menzel (University of Bern, Institute of Geography, Economic Geography and Regional Studies); Dirk Fornahl (University of Karlsruhe (TH), Institute for Economic Policy Research (IWW), and Max Planck Institute of Economics, Jena)
    Abstract: We present a model that explains how a cluster moves through a life cycle and why this movement differs from the industry life cycle. The model is based on three key processes: the changing heterogeneity in the cluster describes the movement of the cluster through the life cycle; the geographical absorptive capacity enables clustered companies to take advantage of a larger diversity of knowledge and the stronger convergence of clustered companies compared to non-clustered companies results in a reduction of heterogeneity. We apply these processes to four stages of the cluster life cycle: emergence, growth, sustainment and decline.
    Keywords: cluster evolution, life cycle, heterogeneity
    JEL: R11 O30 L25
    Date: 2007–10–30
  6. By: Maria Daskalakis (Department of Economics, University of Kassel); Martina Kauffeld-Monz (Department of Economics, University of Kassel)
    Abstract: Researchers in the field of innovation networks have acknowledged the important role knowledge and interaction play for the emergence of innovation. However, not much research has been done to investigate the behavioural dynamics necessary for the success of innovation networks. Our article deals with this issue in a threefold manner: we combine a theoretical analysis with an empirical validation and set up a multi-agent system based on both, simulating the behavioural dynamic of collaborative R&D. With regard to the theoretical foundation, the cognitive foundations of knowledge generation under bounded rationality are conceptualized. This is linked to a discussion about the role trust plays in the course of economic interaction. Trust itself proves to be a relevant mode of economic (inter)action which enables agents to overcome social dilemmas that might arise in the process of collaborative R&D. For empirical validation, a unique data set is used (23 German innovation networks, containing about 600 agents). Results of the analyses highlight the dynamics and interdependence of knowledge generation and trust as well as the sources of trust building in terms of three different components (generalised trust, specific trust, and institutional trust). The multi-agent system comprises the theoretical and empirical findings, e.g. in incorporating heterogeneity with regard to adaptive capacity, reciprocity and the tolerance of non-reciprocal behaviour. The results give evidence of the (changing) relevance of trust in the course of collaborative R&D. The success of collaborative R&D is determined through a co-evolution of individual and interactive processes of knowledge transformation und trust building.
    Keywords: Regional Innovation System, Innovation Networks, Behavioral Economics, Trust, Knowledge Transfer.
    Date: 2007–05
  7. By: Subhayu Bandyopadhyay; Christopher H. Wheeler
    Abstract: We present a model of crime where two municipalities exist within a metro area (MSA). Consistent with the literature, local law enforcement has a crime reduction effect and a crime diversion effect. The former confers a spillover benefit to the other municipality, while the latter a spillover cost. If the net spillovers are positive (negative), then the respective Nash enforcement levels are too low (high) from the perspective of the MSA. When we allow for Tiebout type mobility, labor will move to the location offering lower disutility crime (including the tax burden). To attract labor both jurisdictions would like to raise the relative crime that exists in the competing region. Interestingly, this could raise or reduce enforcement compared to the immobility case. If it was too high (low) under immobility, it will be raised (reduced) further under mobility. In the symmetric case, neither can gain any labor, but the competition for it pushes the jurisdictions further away from the efficient (cooperative) outcome. Thus, mobility must be welfare reducing. We also consider asymmetry in the context of differences in efficiency of enforcement. The low cost municipality has the lower crime damage (inclusive of the tax burden) and attracts labor. Mobility is necessarily welfare reducing for the high cost municipality and for the MSA, but it has an ambiguous effect on the low cost municipality.
    Date: 2007
  8. By: Bui Trinh (Vietnam General Statistical Office - Ministry of Planning and Investment, Vietnam); Mai Quynh Nga (National Centre for Socio-Economic Information and Forecast – Ministry of Planning and Investment, Vietnam); Duong Manh Hung (Vietnam General Statistical Office - Ministry of Planning and Investment, Vietnam); Kwang Moon Kim (Member of AREES, Japan)
    Abstract: I/O model has been widely used to assess the impacts of changes in an economy, it is also an important tool to make forecasts and the results from an I/O model are very helpful in policy-making process. Many scientific findings in economics have to give credit to the I/O approach developed by Leontief and this study is none of the exceptions. This study has gone one step further to develop a new concept, economy-wide multipliers to assess the modernization process in Vietnam’s economy, multi-regional I/O table of 7 regions and 10 aggregated sectors in Vietnam is used for calculation.
    Keywords: Input-Output; Multi-interregional; Vietnam
    Date: 2007–07
  9. By: Charles Raux (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: Congestion pricing as a transport demand management measure is difficult to implement because most of motorists expect a deterioration of their welfare. Tradable driving rights (TDR), that is allocating quotas of driving rights for free to urban inhabitants, could be a more acceptable alternative. This mechanism provides also a supplementary incentive to save whether trips or distance travelled by car, because of the possibility of selling unused rights. A complete system of TDR is designed in detail, aiming whether at reducing trips or vehicles-kilometres, in order to control congestion, or the same target modulated on the basis of the pollutant emission categories of vehicles in order to control atmospheric pollution. An assessment is carried out on the Lyon urban area, which points at some welfare distributive issues between motorists and the community, when compared with conventional congestion pricing.
    Keywords: transport demand management (TMD) ; tradable driving rights (TDR) ; automobile traffic ; congestion pricing ; air pollution ; urban areas ; Lyon (France)
    Date: 2007–11–05
  10. By: Gerald A. Carlino; Robert M. Hunt
    Abstract: This paper extends the research in Carlino, Chatterjee, and Hunt (2007) to examine the effects of local economic characteristics on the rate of innovation (as measured by patents) in more than a dozen industries. The availability of human capital is perhaps the most important factor explaining the invention rate for most industries. The authors find some evidence that higher job market density is associated with more patenting in industries such as pharmaceuticals and computers. They find evidence of increasing returns with respect to city size (total jobs) for many industries and more modest effects for increases in the size of an industry in a city. This suggests that inter-industry spillovers are often at least as important as intra-industry spillovers in explaining local rates of innovation. A more competitive local market structure, characterized by smaller establishments, contributes significantly to patenting in nearly all industries. More often than not, specialization among manufacturing industries is not particularly helpful, but the authors find the opposite for specialization among service industries. Industries benefit from different local sources of R&D (academia, government labs, and private labs) and to varying degrees.
    Keywords: Technological innovations
    Date: 2007
  11. By: Robert J. Shiller
    Abstract: This paper looks at a broad array of evidence concerning the recent boom in home prices, and considers what this means for future home prices and the economy. It does not appear possible to explain the boom in terms of fundamentals such as rents or construction costs. A psychological theory, that represents the boom as taking place because of a feedback mechanism or social epidemic that encourages a view of housing as an important investment opportunity, fits the evidence better.
    JEL: R0
    Date: 2007–10
  12. By: Ottaviano, Gianmarco I P; Peri, Giovanni
    Abstract: In this paper we document a strong positive correlation of immigration flows with changes in average wages and average house rents for native residents across U.S. states. Instrumental variables estimates reveal that the correlations are compatible with a causal interpretation from immigration to wages and rents of natives. Separating the effects of immigrants on natives of different schooling levels we find positive effects on the wages and rents of highly educated and small effects on the wages (negative) and rents (positive) of less educated. We propose a model where natives and immigrants of three different education levels interact in production in a central district and live in the surrounding region. In equilibrium the inflow of immigrants has a positive productive effect on natives due to complementarieties in production as well as a positive competition effect on rents. The model calibrated and simulated with U.S.-states data matches most of the estimated effects of immigrants on wages and rents of natives in the period 1990-2005. This validation suggests the proposed model as a useful tool to evaluate the impacts of alternative immigration scenarios on U.S. wages and rents.
    Keywords: housing prices; immigration; rents; U.S. States; wages
    JEL: F22 J61 R23
    Date: 2007–11
  13. By: Vyacheslav Mikhed; Petr Zemcik
    Abstract: We investigate whether recently high U.S. house prices are justified by fundamental factors. The standard unit root and cointegration tests with aggregate data indicate that house rent is the only fundamental which has the same order of integration as the price, but these two variables are not cointegrated. Nationwide analysis potentially suffers from problems of the low power of stationarity tests applied to relatively short series and the ignorance of dependence among regional house markets. Therefore, we conduct panel data stationarity tests which are robust to cross-sectional dependence and have greater power than univariate tests. While this time it is inflation and income that have the same order of integration as house price, they are not cointegrated with it, even if combined with the aggregate stock index. It appears that the real estate prices take long swings from their fundamental value and it can take decades before they revert to it.
    Keywords: Cointegration, panel data, unit root, bubble, house prices, rents
    JEL: G12 R21 R31 C33
    Date: 2007–10
  14. By: Christine Schleupner (Research unit Sustainability and Global Change, Hamburg University)
    Abstract: Accelerated sea level rise and hurricanes are increasingly influencing human coastal activities. With respect to the projected continuation of accelerated sea level rise and global warming one must count with additional expenses for adaptation strategies along the coasts. On the mountainous island Martinique the majority of settlements are situated along the coast almost at sea level. But potential rises in sea level and its impacts are not addressed in coastal management, even if saltwater intrusion and coastal erosion with increasing offshore loss of sediment are locally already a severe problem. Following article deals with the evaluation of human vulnerability to accelerated sea level rise on the Martinique coast. In addition, it assesses the possible effects of sea level rise on the island for future regional planning purposes spatially. The actual situation and legislation measures for coastal zone management of the island are described and sea level rise response strategies are discussed. This paper sees itself as recommendation of action not only for Martinique.
    Keywords: GIS Modelling, Spatial Analysis, Caribbean, Climate Change, Coastal Zone Management
    JEL: Q20
    Date: 2007–10
  15. By: Vyacheslav Mikhed; Petr Zemcik
    Abstract: We employ recently developed cross-sectionally robust panel data tests for unit roots and cointegration to find whether house prices reflect house-related earnings. We use U.S. data for Metropolitan Statistical Areas, with house price measured by the weighted-repeated-sales index, and cash flows either by market tenant rents or estimates of a fair market rent. In our full sample periods, an error-correction model is not appropriate, i.e. there is a bubble. We then combine overlapping ten-year periods, price-rent ratios, and the panel data tests to construct a bubble indicator. The indicator is high for the late 1980s, early 1990s and since the late 1990s for both panels. Finally, evidence based on panel data Granger causality tests suggests that house price changes are helpful in predicting changes in rents and vice versa.
    Keywords: Cointegration, panel data, unit root, bubble, house prices, rents.
    JEL: G12 R21 R31 C33
    Date: 2007–10
  16. By: Rajar, Allah Wasayo; Herani, Gobind; Dhakan, Ali Akbar
    Abstract: This study is firstever in nature and belongs to Thaparkar but the concept is general and can be replicated in mostly rain-fed areaes of the world. This study attempts to find out demographic, social and economic changes and its prospects. To achieve mandated task, the study is focussed on: Firstly, to find out the existing trends of demographic changes in the district. Secondly, to identify ever-increasing population and demographic problems and policy implementation gap, and finally, the paper attempts to suggest policy recommendations for sustainable management of demographic problems. Data analysis, findings and recommendations would be beneficial to the policy makers, planers, government, NGOs, and donnor agerncies for further planning of the developlment policies. Demographic, social and economic changes are the variables for special analysis. Therefore, an attempt has been made to test the following hypothesises. It was hypothysed that: (i). Higher the population growth rate, lower the afforidability power. (ii). Higher the literacy ratio, lower the population growth. (iii). Higher the literacy ratio, higher the living status. (iv). Higher the urbanization, higher the literacy ratio. (v). When the literacy rate increases, the positive development also increases in social sectors. (vi). Population density increases, the income growth rate decresaes.
    Keywords: Rain-fed Areas; Demographic; Social and Economic Changes; Transient and Incoherent Grazing
    JEL: R11 O12 J11
    Date: 2007
  17. By: Henri Capron (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: En quelque trente ans de politique régionale, l’Union européenne a traversé différentes étapes dans la mise en oeuvre de cette politique tant sur le plan de sa conceptualisation que de ses adaptations aux élargissements successifs. La plus importante de celles-ci est incontestablement la réforme des fonds structurels opérée en 1989. Si des aménagements ont été apportés au fil des périodes de programmation, les modifications les plus importantes concernent l’actuelle période de programmation. Le nouveau cadre réglementaire se veut plus stratégique et moins contraignant administrativement. C’est à une analyse de l’évolution de la politique régionale européenne et de la politique structurelle complétée par une discussion sur sa mise en oeuvre au sein de l’espace Wallonie-Bruxelles sur laquelle ce papier se penche.
    Keywords: Europe, politique régionale, développement.
    JEL: R11 R12
    Date: 2007–10
  18. By: Kaoru Okamura (Graduate School of Economics, Kobe University); Mototsugu Fukushige (Graduate School of Economics, Osaka university)
    Abstract: It depends on the repeater tourists whether the sightseeing spot develops continuously or not . I n t h i s paper, we analyze the purposes of the tourists with d i fferent frequency for visiting by applying binary logistic model for questionnaire survey. The result shows that t h e t o u r i s t s w i t h d i fferent frequency f o r v i s i t i n g h a v e d i fferent purposes of t ourism. To promot e the repe a t e r t o u r i s t s , a sightseeing spots have various resources for tourism, which means not to develop new sight spots, but to present a new attr a c t i v e t o u r p l a n .
    Keywords: Repeater Tourists, Tourism Promotion, Tourism Policy, Binary Logit Mode
    JEL: R11
    Date: 2007–10

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