nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒11‒17
eleven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Tax differentials and agglomeration economies in intraregional firm location By Jordi Jofre-Monseny; Albert Solé-Ollé
  2. Bridging the gap between growth theory and the new economic geography: The spatial Ramsey model By Raouf Boucekkine; C. Camacho; B. Zou
  3. Local fiscal inflation in France : an unexpected consequence of the growing importance of metropolitan areas ? (In French) By Olivier THOMAS (LEREPS-GRES)
  4. A new approach for β-convergence estimation in Italy By De Siano, Rita; D'Uva, Marcella
  5. On Diffusion of Ideas in the Academic World: the Case of Spatial Econometrics By Nikias Sarafoglou; Jean H.P. Paelinck
  6. Resource abundance and regional development in China: By Zhang, Xiaobo; Xing, Li; Fan, Shenggen; Luo, Xiaopeng
  7. Transport Costs and the Size of Cities: the Case of Russia By Albrecht Kauffmann
  8. What determines entrepreneurial clusters? By Luigi Guiso; Fabiano Schivardi
  9. On the Factors that Affect Airline Flight Frequency and Aircraft Size By Vivek Pai
  10. Road Pricing and Retail Revenues: Results from the Stockholm Road Pricing Trial By Daunfeldt, Sven-Olov; Rudholm, Niklas; Rämme, Ulf
  11. Tax Motivated Takings By Thomas J. Miceli; Kathleen Segerson; C. F. Sirmans

  1. By: Jordi Jofre-Monseny (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB)); Albert Solé-Ollé (Institut d'Economia de Barcelona (IEB); Universitat de Barcelona (UB))
    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, Firm location, Local taxes
    JEL: R3 H32
    Date: 2007
  2. By: Raouf Boucekkine; C. Camacho; B. Zou
    Abstract: We study a Ramsey problem in in¯nite and continuous time and space. The problem is discounted both temporally and spatially. Capital flows to loca- tions with higher marginal return. We show that the problem amounts to optimal control of parabolic partial differential equations (PDEs). We rely on the existing related mathematical literature to derive the Pontryagin con- ditions. Using explicit representations of the solutions to the PDEs, we first show that the resulting dynamic system gives rise to an ill-posed problem in the sense of Hadamard (1923). We then turn to the spatial Ramsey problem with linear utility. The obtained properties are significantly dfferent from those of the non-spatial linear Ramsey model due to the spatial dynamics induced by capital mobility.
    Keywords: Ramsey model, Economic geography, Parabolic partial differential equations, optimal control.
    JEL: C61 C62 O41
    Date: 2007–09
  3. By: Olivier THOMAS (LEREPS-GRES)
    Abstract: This paper intends to question the current development of metropolitan areas in France, and its induced effects. Contrary to the expected benefits (lower costs for the production of public services, scale economies), metropolitan, areas in France has entailed an increase in local taxes and tax burden. Although a part of this fiscal inflation can be attributed to a better quality of public services, the idea that this inflation is the normal result of the strategy of mayors will be stressed.
    Keywords: French metropolitan areas – urban communities with own taxes – fiscal inflation – local public economics – budgetary strategy
    JEL: H30 H73 R51
    Date: 2007
  4. By: De Siano, Rita; D'Uva, Marcella
    Abstract: In this paper we test the presence of β-convergence among Italian regions, in the period 1980-2003, in presence of a trend break in the series following a new approach (Vogelsang and Tomljanovich, 2002). The break year is considered either known (1992) and endogenously estimated from the data. When we consider a known trend break date model the results evidence the presence of a convergence process for most of the Italian regions in the considered period. The outcome relative to the unknown break date model, on the contrary, strongly depend on the econometric model used to estimate the β-convergence.
    Keywords: β-convergence regional convergence
    JEL: C5 R11
    Date: 2007
  5. By: Nikias Sarafoglou; Jean H.P. Paelinck
    Abstract: Spatial econometrics is a fast-growing field in the series of quantitative disciplines, auxiliaries of economics and related social sciences. Space, friction, interdependence, spatiotemporal components, externalities and many other aspects interact and should be treated adequately in this field. The publication of the Paelinck and Klaassen book in the late 1970s generated virtually the field spatial econometrics This article studies the diffusion of spatial econometrics, through experienced history on the one hand, on the other through bibliometric methods. Although this field was an “Invisible College” up to 2006 (absence of any organization in form of association, conference, journal, etc.), the databases depict a fast diffusion in the past and strong prospects for the future.
    JEL: B2 B4 C4 C5 R1
    Date: 2007–09
  6. By: Zhang, Xiaobo; Xing, Li; Fan, Shenggen; Luo, Xiaopeng
    Abstract: "Over the past several decades, China has made tremendous progress in market integration and infrastructure development. Demand for natural resources has increased from the booming coastal economies, causing the terms of trade to favor the resource sector, which is predominantly based in the interior regions of the country. However, the gap in economic development level between the coastal and inland regions has widened significantly. In this paper, using a panel data set at the provincial level, we show that Chinese provinces with abundant resources perform worse than their resource-poor counterparts in terms of per capita consumption growth. This trend that resource-poor areas are better off than resource-rich areas is particularly prominent in rural areas. Because of the institutional arrangements regarding property rights of natural resources, most gains from the resource boom have been captured either by the government or state owned enterprises. Thus, the windfall of natural resources has more to do with government consumption than household consumption. Moreover, in resource-rich areas, greater revenues accrued from natural resources bid up the price of non-tradable goods and hurt the competitiveness of the local economy." from Authors' Abstract
    Keywords: Regional inequality, Resource curse, Dutch disease, Property rights,
    Date: 2007
  7. By: Albrecht Kauffmann
    Date: 2007–11
  8. By: Luigi Guiso; Fabiano Schivardi
    Abstract: We contrast two potential explanations of the substantial di¤erences in entrepreneurial activity observed across geographical areas: entry costs and external effects. We extend the Lucas model of entrepreneurship to allow for heterogeneous entry costs and for externalities that shift the distribution of entrepreneurial talents. We show that these assumptions have opposite predictions on the relation between entrepreneurial activity and .rm level TFP: with di¤erent entry costs, in areas with more entrepreneurs firms' average productivity should be lower and vice versa. We test these implications on a sample of Italian firms and unambiguously reject the entry costs explanation in favor of the externalities one. We also investigate the sources of external e¤ects, finding robust evidence that learning externalities are an important determinant of cross-sectional differences in entrepreneurial activity.
    Keywords: Entrepreneurship, clustering, agglomeration economies
    JEL: D24 D62 J23
    Date: 2007
  9. By: Vivek Pai (Department of Economics, University of California-Irvine)
    Abstract: This paper assesses the determinants of aircraft size and frequency of flights on airline routes by considering market demographics, airport characteristics, airline characteristics and route characteristics. The paper shows that frequency and aircraft size increase with population, income, and runway length. An increase in the proportion of managerial workers in the labor force or the proportion of population below the age of 25 results in greater frequency with the use of small planes. Slot constrained airports and an increase in the number of nearby airports lead to lower flight frequency with the use of smaller planes. Hubs and low cost carriers are associated with larger plane sizes and higher frequency, while regional airline ownership leads to higher frequency and the use of smaller planes. An increase in distance between the endpoints leads to lower frequency with the use of larger planes. As airport delay rises, airlines reduce frequency and use smaller planes, though when airport cancellations rise, flight frequency increases with the use of larger planes. This finding suggests airlines utilize frequency and aircraft size to hedge against flight cancellations.
    Keywords: Airline; Frequency; Aircraft size; Markets
    JEL: C51 D21 L20 L93 R41
    Date: 2007–11
  10. By: Daunfeldt, Sven-Olov (The Swedish Retail Institute); Rudholm, Niklas (The Swedish Retail Institute); Rämme, Ulf (The Swedish Retail Institute)
    Abstract: This paper studies the impact of the Stockholm road pricing trial on retail revenues. The analysis is performed using revenue data from 14 shopping malls, 9 within the tool area and 5 outside the tool area. The data also include revenue data from a sample of retail stores located along the main shopping streets in Stockholm. The results show that the Stockholm road pricing trial did not negatively affect retail revenue, neither in shopping malls nor in the sample of retail stores.
    Keywords: Road tolls; congestion fee; congestion charge; retail revenues; retail profits
    JEL: D12 H31 L81
    Date: 2007–11–06
  11. By: Thomas J. Miceli (University of Connecticut); Kathleen Segerson (University of Connecticut); C. F. Sirmans (University of Connecticut)
    Abstract: Tax motivated takings are takings by a local government aimed purely at increasing its tax base. Such an action was justified by the Supreme Court's ruling in Kelo v. New London, which allowed the use of eminent domain for a private redevelopment project on the grounds that the project promised spillover public benefits in the form of jobs and taxes. This paper argues that tax motivated takings can lead to inefficient transfers of land for the simple reason that assessed values understate owners' true values. We therefore propose a reassessment scheme that greatly reduces the risk of this sort of inefficiency.
    Keywords: Eminent domain, holdout problem, property taxes, takings, urban redevelopment
    JEL: H71 K11 R51
    Date: 2007–11

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