nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒11‒24
seventeen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Productive Public Expenditure in a New Economic Geography Model By Commendatore, Pasquale; Kubin, Ingrid; Petraglia, Carmelo
  2. Industry Churning and the Evolution of Cities: Evidence for Germany By Sebastian Findeisen; Jens Suedekum
  3. "Homeless Networks and Geographic Concentration: Evidence from Osaka City" By Shinichiro Iwata; Koji Karato
  4. Housing supply in the Netherlands By Wouter Vermeulen; Jan Rouwendal
  5. Regional Unemployment and Human Capital in Transition Economies By Stepán Jurajda; Katherine Terrell
  6. Regional Economies of Scale in Transportation and Regional Welfare By Alexandre Skiba
  7. Strengthening Cluster Building in Developing Country alongside the Triple Helix: Challenge for Indonesian Clusters - A Case Study of the Java Region By IRAWATI, DESSY
  8. Regions Matter: How Regional Characteristics Affect External Knowledge Acquisition and Innovation By Keld Laursen; Francesca Masciarelli; Andrea Prencipe
  9. High fertility in city suburbs: compositional or contextual effects? By Hill Kulu; Paul J. Boyle
  10. Poverty dynamics in rural Madagascar: regularities and specificities at the regional level\r\n (In French) By Claire GONDARD-DELCROIX (GREThA)
  11. The labor supply of married women: why does it differ across U.S. cities? By Dan Black; Natalia Kolesnikova; Lowell J. Taylor
  12. Ethnic Sorting in the Netherlands By Aslan Zorlu; Jan Latten
  13. Oligarchies in Spatial Environments By Ehlers Lars; Storcken Ton
  14. Urbanization, educational expansion, and expenditures inequality in Indonesia in 1996, 1999, and 2002: By Akita, Takahiro; Miyata, Sachiko
  15. Growth, Development and Structural Change of Innovator Networks - The Case of Jena By Uwe Cantner; Holger Graf
  16. Environmental Policy in a Federal State - A Regional CGE Analysis of the NEC Directive in Belgium By Saveyn Bert; Van Regemorter Denise
  17. The Housing Boom and Forest Fires By Libertad González Luna

  1. By: Commendatore, Pasquale; Kubin, Ingrid; Petraglia, Carmelo
    Abstract: We assess whether and how differences in productive public expenditure impacts on industrial location. Since productive public expenditure and taxation affect in opposite direction industrial location, it is not straightforward that following an increase in productive public expenditure in a region, that region will necessarily enjoy stronger agglomeration. As a major contribution to the literature, we consider jointly two effects arising from public policy: the demand effect and the productivity effect. The interplay of these two effects determines the final impact on the spatial distribution of firms. The result is influenced by the proportion in which tax payers of the two regions contribute to the financing of public expenditure.
    Keywords: economic geography; public expenditure; footloose capital
    JEL: F20 H5 R12
    Date: 2007–04
  2. By: Sebastian Findeisen (University of Konstanz); Jens Suedekum (University of Duisburg-Essen, University of Konstanz and IZA)
    Abstract: In this paper we show that the recent model by Duranton (AER, 2007) performs remarkably well in replicating the city size distribution of West Germany, much better than the simple rank-size rule known as Zipf’s law. The main mechanism of this theoretical framework is the "churning" of industries across cities. Little is known so far about the determinants of local industry turnover, however. We present an empirical analysis of the excess churning index for West German cities, which describes the strength of intra-city industry reallocations that has occurred over time. We find that human capital is a key driver of growth and local industrial change, but only among successful cities. Industrial change within unsuccessful cities is strongly driven by the disappearance of old-fashioned and declining industries such as agriculture or mining. On a more general level, our results suggest that the recent model by Duranton is a powerful description of the urban growth process. Still there are some aspects that are not captured by that model, which are at the core of other theories of urban growth.
    Keywords: industry turnover, urban growth, structural change, churning, city size distribution, Zipf’s law
    JEL: O18 R11 R12
    Date: 2007–11
  3. By: Shinichiro Iwata (Faculty of Economics, University of Toyama); Koji Karato (Faculty of Economics, University of Toyama)
    Abstract: Homeless people in Osaka City are geographically concentrated. The purpose of this paper is to examine this geographic concentration by focusing on homeless networks. The data we use contain information on Osaka City.s homeless population by census blocks. The estimated results of a spatial autoregressive model with autoregressive disturbances show that the homeless network is signi.cantly positive across census blocks. Networks exist in a homeless society.
    Date: 2007–11
  4. By: Wouter Vermeulen; Jan Rouwendal
    Abstract: In spite of a growing recognition of the importance of supply conditions for the level and volatility of house prices, empirical work on housing supply outside the US is scarce. This paper considers various measures of housing supply in the Netherlands, where real house prices have roughly tripled since 1970. Besides the volume of investment in residential structures and new housing construction in units, we derive time series of structure and location quality in a hedonic analysis. Each of these variables appears to be almost fully inelastic with respect to house prices in at least the short to medium long run. Further analysis of the quality of location index shows that conventional models of competitive land and housing markets cannot account for these findings. However, they may be well explained in terms of the rather extensive body of interventions by the Dutch government.
    Keywords: Housing supply; residential investment; housing markets; land use regulation
    JEL: E22 R31 R52
    Date: 2007–09
  5. By: Stepán Jurajda (CERGE-EI, CEPR and IZA); Katherine Terrell (University of Michigan, CEPR and IZA)
    Abstract: Differences in regional unemployment in post-communist economies are large and persistent. We show that inherited variation in human-capital endowment across the regions of four such economies explains the bulk of regional unemployment variation there and we explore potential explanations for this outcome through related capital and labor mobility patterns. The evidence suggests that regions with high inherited skill endowments attract skilled workers as well as FDI. This mobility pattern, which helps explain the lack of convergence in regional unemployment rates, is consistent with the presence of complementarities in skill and capital. Nevertheless, we find no supporting evidence of human capital wage spillovers implied by the complementarities story. Unemployment of the least-skilled workers appears lower in areas with a higher share of college-educated labor and future research is needed to see if this finding as well as the observed migration pattern arise from different adjustments to regional shocks by education level brought about in part by Central European labor-market institutions, such as guaranteed welfare income raising effective minimum wages.
    Keywords: unemployment, human capital, regional labor markets, transition economies, labor mobility, complementarities, spillovers, Czech Republic, Hungary, Romania, Ukraine
    JEL: E24 J0 J61
    Date: 2007–11
  6. By: Alexandre Skiba (Department of Economics, The University of Kansas)
    Abstract: A discriminatory tariff can be welfare superior to free trade in the presence of regional economies of scale. This is because a tariff on non-regional trade concentrates trade within a region, lowering the cost of transportation, so that the gains from economies of scale can theoretically offset the losses from the tariff. To complement the theoretical point I estimate the relation between transportation cost and regional volume of trade. The estimates suggest that a 10% increase in the volume of trade brings about 2.5% reduction in transportation cost in the long run.
    Keywords: regional economies of scale, transportation costs, preferential trade agreements, regional welfare
    JEL: F10 F12
    Date: 2007–09
    Abstract: This paper is a component of my conceptual foundation paper due to PhD field work in Indonesia to understand the possibility and the chance for developing country such as Indonesia to strengthen cluster building alongside The Triple Helix model within the region of Java. This paper is a conceptual paper based on case study in Indonesia related to the Triple Helix and cluster approach for chosen Industrial Clusters in Java. In this paper, the focus will be on six selected industrial clusters across the Java region. They are Gresik Industrial District in East Java, Tugu Wijaya Semarang in Central Java, Sentul Bogor in West Java, Jababeka in Bekasi, Kujang Industrial District, and Kawasan Berikat Nusantara in Jakarta. In conjunction with the fact in Indonesian industrial condition, Indonesian government initiated the setting up of industrial district which later known as 2 industrial cluster to make existence easier for both domestic and international investors by providing all necessary infrastructure, facilities and housing in one safe location - at a reasonable cost - thus providing a secure base for industry and manufacturing. Regarding clustering approach, Indonesia has a very long tradition of SMEs (Small and Medium Sized Enterprises) cluster around similar activities. In 2002, the cluster comprised approximately 3700 firms mostly SMEs employing 58.000 permanent workers (Loebis and Schmitz, 2005). They are usually craft industries and export oriented driven. About 70% of the cluster production is exported while the rest is sold on the domestic markets. However, little is known about the critical success factors that determine economic development of cities and regions and empirical studies that draw lessons for policy are scarce (Tichy, 1998), specifically for implementing cluster approach in industry/manufacturing sector in Indonesia. Moreover, there are good reasons to doubt to what extent a purely sectoral view is adequate to analyse region economic growth and to design policies. There are many indications that urban economic growth increasingly seems to emerge from fruitful cooperation between economic actors, who form innovative networks. It is in these geographically concentrated network configurations, or ‘cluster’ that value-added and employment growth in urban regions is realised. This demands a new policy approach in urban economic development, specifically for Indonesian study. Accordingly, it is motivating to investigate the process of cluster building in industrial district in Java region as the important region due to economic, social, and political condition. Thus, details can be read in the following section within this paper.
    Keywords: Cluster; Triple Helix; SMEs;
    JEL: O5
    Date: 2007–01–07
  8. By: Keld Laursen; Francesca Masciarelli; Andrea Prencipe
    Abstract: To introduce new products and processes, firms often acquire knowledge from other organizations. Drawing on social capital and transaction cost theory, we argue that not only is the impact of such acquisitions on the successful development of product and product innovations dependent on strategic and economic variables, it may also be contingent on the “knowledge characteristics” of the geographical area in which the firm is located. Combining data on social capital at the level of 21 regions with a large scale data set on innovative activities by a representative sample of 2464 Italian manufacturing firms, we find — after controlling for a large set of firm and regional characteristics — that being located in regions characterized by high levels of social interaction leads to a higher propensity to innovate. In addition, being located in an area characterized by a high degree of social interaction positively moderates the effectiveness of externally acquired R&D on innovation inclination.
    Keywords: Social capital; external acquisition; process innovation; product innovation
    JEL: L23 O31
    Date: 2007
  9. By: Hill Kulu (Max Planck Institute for Demographic Research, Rostock, Germany); Paul J. Boyle (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Fertility rates are known to be higher in city suburbs. One interpretation is that the suburban ‘context’ influences the behaviour of individuals who reside there while an alternative is that the ‘composition’ of the suburban population explains the higher fertility levels. Furthermore, suburban in-migrants who intend to have children may have a significant influence on suburban fertility rates. Using Finnish longitudinal register data we show that fertility rates are higher in the suburbs and rural areas and lower in the cities. While fertility variation across these residential contexts decreases significantly after controlling for women’s demographic and socio-economic characteristics, it does not disappear entirely suggesting that the local context may have some influence on fertility. While movers to suburbs do display higher fertility levels than non-migrant residents, their overall impact is not great because they form a small share of the suburban population.
    Keywords: Finland, event history analysis, fertility, migration, residential mobility, rural areeas, suburban areas, urban areas
    JEL: J1 Z0
    Date: 2007–11
    Abstract: Poverty is a temporal phenomenon and its evolutions have to be studied. Nevertheless, it is overall important to understand the working process which explains trajectories of poverty, at both levels of households and regional under-groups. Carrying out an applied study on rural Madagascar, the article shows that poverty dynamics can not be properly understood without a territorial approach.
    Keywords: Chronic poverty, transitory poverty, regional dynamics, rural Madagascar
    JEL: I3 R11
    Date: 2007
  11. By: Dan Black; Natalia Kolesnikova; Lowell J. Taylor
    Abstract: Using Census Public Use Micro Sample (PUMS) data for 1980, 1990 and 2000, this paper documents a little-noticed feature of U.S. labor markets that there is wide variation in the labor market participation rates and annual work hours of white married women across urban areas. This variation is also large among sub-groups, including women with children and those with different levels of education. Among the explanations for this variation one emerges as particularly important: married women's labor force participation decisions appear to be very responsive to commuting times. There is a strong empirical evidence demonstrating that labor force participation rates of married women are negatively correlated with commuting time. What is more, the analysis shows that metropolitan areas which experienced relatively large increases in average commuting time between 1980 and 2000 also had slower growth of labor force participation of married women. This feature of local labor markets may have important implications for policy and for further research.
    Keywords: Women - Employment ; Labor market
    Date: 2007
  12. By: Aslan Zorlu (AMIDst, AIAS, University of Amsterdam and IZA); Jan Latten (Statistics Netherlands)
    Abstract: This paper examines the residential mobility behaviour of migrants and natives in the Netherlands using a rich administrative individual data file. The inclination to move and the choice of destination neighbourhood are estimated, correcting for the selection bias of movers. Subsequently, the role of preferences in the mobility behaviour is implicitly derived from regression estimates. The analysis shows that the percentage of natives in the destination neighbourhood is predicted to be about 18 percentage points lower for nonwestern migrants than for natives. About 65 percent of the differential is explained by their observable characteristics; the remaining part can largely be attributed to preferences and discrimination. No indication is found of the spatial assimilation of second-generation nonwestern migrants. On the other hand, the mobility pattern of the second-generation western migrants is similar to that of natives.
    Keywords: migrants, residential segregation
    JEL: J1 J6 R3
    Date: 2007–11
  13. By: Ehlers Lars; Storcken Ton (METEOR)
    Abstract: In spatial environments we consider social welfare functions satisfying Arrow''s requirements, i.e. weak Pareto and independence of irrelevant alternatives. Individual preferences measure distances between alternatives according to the Lp-norm (for a fixed p > 1). When the policy space is multi-dimensional and the set of alternatives has a non-empty interior and it is compact and convex, any quasi-transitive welfare function must be oligarchic. As a corollary we obtain that for transitive welfare functions weak Pareto, independence of irrelevant alternatives, and non-dictatorship are inconsistent if the set of alternatives has a non-empty interior and it is compact and convex.
    Keywords: mathematical economics;
    Date: 2007
  14. By: Akita, Takahiro; Miyata, Sachiko
    Abstract: "This paper considers urban-rural location and education as the main causes of expenditure inequality and attempts to examine inequality changes associated with urbanization and educational expansion in Indonesia from 1996 to 2002, using Indonesian monthly household consumption expenditure data. It introduces a hierarchical framework of inequality decomposition by population subgroups, which enables researchers to analyze inequality resulting from differences in educational attainment as well as inequality within each educational group, after the effects on inequality of urban–rural differences in the composition of educational attainments are removed. It finds that the urban sector's higher educational group contributes significantly to overall inequality. Inequality within the group increased significantly once Indonesia recovered from the financial crisis of 1998. This, together with educational expansion in urban areas, led to a conspicuous rise in urban inequality. Overall expenditure inequality has increased markedly, due not only to the rise in urban inequality but also a widening urban-rural disparity, accompanied by a population shift from the rural to the urban sector. Since more people will obtain higher education as the economy continues to develop, and more jobs requiring specialized skills become available in urban areas, urban inequality is likely to remain high. In order to mitigate urban inequality and thus overall inequality, the government needs to introduce policies that could reduce inequality among households whose heads have a tertiary education." from Authors' Abstract
    Keywords: Expenditure inequality, Urbanization, Educational expansion, Theil index, Two-stage nested inequality decomposition analysis,
    Date: 2007
  15. By: Uwe Cantner (Friedrich-Schiller-University Jena, Department of Economics. Chair of Economics / Mircroeconomics); Holger Graf (Friedrich-Schiller-University Jena, Department of Economics. Chair of Economics / Mircroeconomics)
    Abstract: We attempt to extend the static analysis of innovator networks by providing case study based insights into the dynamic, developmental or evolutionary pattern of such networks. In the theoretical part, we develop some building blocs that are considered central to a theory of network evolution. Especially, we focus on the growth of innovator networks and their structural change over time, i.e. how new relationships come into existence and existing ties are cut, how new actors join the system, and other actors leave it. The factors shaping these structural properties, can explain how coherence might increase in some periods while it might decrease in others. We exemplify these patterns for the case of the Jena network of innovators during the period 1995-2001.
    Keywords: Innovator network, internal/external relationships, network entry and exit
    JEL: O31 L14 R11
    Date: 2007–11–12
  16. By: Saveyn Bert (K.U.Leuven-Center for Economic Studies); Van Regemorter Denise (K.U.Leuven-Center for Economic Studies)
    Date: 2007–03
  17. By: Libertad González Luna
    Keywords: Forest fires, housing prices, land-use change
    JEL: Q15 Q23 R21
    Date: 2007–10

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