nep-geo New Economics Papers
on Economic Geography
Issue of 2007‒12‒15
twelve papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. THE CREATIVE CLASS AND SOCIAL CAPITAL - civil society, regional development and high-tech employment in Japan By Westlund, Hans; Calidoni-Lundberg, Federica
  2. Acnowledging for spatial effects in the Portuguese housing markets By G. Carvalho, Pedro; Ribeiro, Alexandra
  3. R&D Accessibility and Comparative Advantages in Quality Differentiated Goods By Johansson, Sara
  4. Entrepreneurship and Local Growth - a comparison of the U.S. and Sweden By Borgman, Benny; Braunerhjelm, Pontus
  5. Does Economic Integration Affect the Structure of Industries? Empirical Evidence from the CEE By d'Artis Kancs
  7. The Effect of Information and Communication Technologies on Urban Structure By Y Ioannides; Henry G. Overman; Esteban Rossi-Hansberg; Kurt Schmidheiny
  8. FDI Spillovers at Regional Level: Evidence from Portugal By Nuno Crespo; Isabel Proença; Maria Paula Fontoura
  10. Global-local linkages, Spillovers and Cultural Clusters: Theoretical and Empirical insights from an exploratory study of Torontos Film Cluster. By Chaminade, Cristina; Vang-Lauridsen, Jan
  11. Voting Patterns, Party Spending and Space in England and Wales By David Cutts; Don Webber
  12. Economic Growth or Civil Development? Alternative ways for southern Italy. By Radhuber, Michael

  1. By: Westlund, Hans (KTH and JIBS); Calidoni-Lundberg, Federica (Swedish Institute for Growth Policy Studies)
    Abstract: Do the social and cultural environments have any impact on regional development, expressed in terms of e.g. entrepreneurship, innovations and growth of new industries? A rapidly increasing field of research has found many indications on that such an impact of the civil society exists. In the literature, two partly contradicting hypotheses can be discerned: 1. Florida’s hypothesis, saying that a heterogeneous civil society with diverse values combined with tolerance is influencing regional growth in a positive way, and 2. Putnam’s hypothesis, saying that a homogenous civil society with common norms and values and trust between its citizens is having a positive impact on regional development.This paper studies the validity of these two hypotheses on the current regional development in Japan,measured in four alternative ways: population growth, the high-tech sector’s and high-tech services’ regional distribution, and the net growth of enterprises. As determining variables, we use data from the Japanese General Social Surveys’ International Comparative Survey on Values and Behavioral Patterns, Non-Profit Organizations per capita and share of the population being born abroad, plus control variables in the form of market accessibility and human capital. On detailed regional level (46 prefectures) the analysis does not give any significant support to any of the civil society hypotheses. However, on large-region level (8 regions) the civil society measure gives a significant result for high-tech industry and services.
    Keywords: Regional development; Social capital; Creative class; Civil society; Japan; High-tech industry
    JEL: J24 O33 R11 R12
    Date: 2007–12–11
  2. By: G. Carvalho, Pedro; Ribeiro, Alexandra
    Abstract: The aim of this paper is to revisit a former paper on the Portuguese housing market (1995), acknowledging for spatial effects in order to interpret housing market changes over 1995-2001. The paper will include a first section devoted to explain the differences between the OLS regression analysis and spatial econometrics, explaining the theoretical background used to develop a spatial lag model with the same database; the second section will show the misspecification problems we found when we ran the same model for after 1995-1998 databases; the third section is devoted to describe new housing literature findings relating housing market evolution with the macroeconomic cycles in Portugal; as a consequence the fourth section will include the method we developed with recent census data, to explain the evolution of the country macroeconomic cycles and the agents’ new behavioural attitudes concerning housing; finally and using spatial analysis we can understand the main changes occurred over the 1995-2001 period. The evaluation of the results contradicts some mainstream scholar and political knowledge to explain spatial inequalities between coast and interior municipalities. Complexity issues seem to be present when we consider the way different market agents make decisions on housing markets, looking this good either as a place to live or an alternative investment asset. In the concluding remarks we raise some new interesting questions for further research.
    JEL: C51 E32 R21 C21 R11 D01
    Date: 2007–12–01
  3. By: Johansson, Sara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This paper analyzes the influences of human capital and technology transfers from R&D activities on regional export specialization along the range of product quality. Previous literature on specialization and trade in quality differentiated goods concludes that the production of high quality product varieties is intensive in knowledge and R&D. This study contributes to previous research by addressing the influence of spatial knowledge flows on the observed patterns of regional quality specialization. A theoretical model of endogenous quality choice derives regional comparative advantages to the presence of external knowledge flows from R&D activities. These knowledge transfers are modeled by accessibility variables, which deduce the presence of technology transfers from R&D activities to the geographical distribution of R&D activities and the observed patterns of spatial interaction. The impacts of regional R&D accessibility on regions’ revealed comparative advantages in high quality segments are subsequently examined in a two-dimensional cross-regional regression analysis. The results of this empirical work show significant positive effects of human capital and R&D accessibility on the revealed comparative advantages in production of high quality goods in Swedish regions. The empirical analysis also provides evidences of technology spillovers from abroad, as the presence of multinational firms increases the region’s specialization in high-quality segments. These results are robust over four different specifications of above-average product qualities. However, the sizes of estimated coefficients for R&D accessibility rises slightly with the quality level considered. This suggests that technological advantages becomes of larger importance the more superior are the levels of product quality considered.
    Keywords: Product quality; vertical differentiation; Knowledge; Accessibility; Spatial dependence; comparative advantage; technology
    JEL: F12 F14 R12 R32
    Date: 2007–12–11
  4. By: Borgman, Benny (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Braunerhjelm, Pontus (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: The U.S. is traditionally viewed as an economy driven by entrepreneurs, whereas the Swedish model is associated with high welfare ambitions and less focus on entrepreneurial activities. This paper seeks to empirically investigate whether the connection between entrepreneurship and growth at the regional level differs between the U.S. and Sweden. By regressing annual entrepreneurship on regional employment growth (and controlling for other conceivable variables impacting employment growth) entrepreneurship is shown to be positively and significantly associated with regional growth in both countries in the 1990s. Still, the result is more robust for the U.S. Other important variables for regional growth is business density and, in the case of the U.S., educational levels and internal scale economies.
    Keywords: Entrepreneurship; Knowledge spillovers; Regional growth
    JEL: M13 O57 R11
    Date: 2007–12–11
  5. By: d'Artis Kancs
    Abstract: In this paper we study how European integration would a¤ect the industry location and sectoral specialisation of local economies in the CEE accession countries. The theoretical framework of our study is based on the new eco- nomic geography, which allows us to predict not only the post-integration spe- cialisation patterns, but captures also other general equilibrium e¤ects, such as transition to market economy, which turn out to be highly significant in CEE. Our empirical results suggest that the CEE specialisation pattern would be distinct from the old EU member states. First, the EU integration would reduce regional specialisation in CEE. Second, the bell-shaped specialisation pattern predicted by the underlying theoretical framework is inverse in CEE. We could explain a large portion of these di¤erences by CEE-specific processes, such as integration of the CMEA. These distortions are higher in those regions, which were more integrated in the CMEA. Our simulation results also suggest a convergence in the specialisation across the CEE regions.
    Keywords: Economic geography, transport costs, European integration, monop- olistic competition.
    JEL: F15 R12 R13
    Date: 2007
  6. By: Somik V. Lall; Hyoung Gun Wang; Daniel Da Mata
    Date: 2007
  7. By: Y Ioannides; Henry G. Overman; Esteban Rossi-Hansberg; Kurt Schmidheiny
    Abstract: The geographic concentration of economic activity occurs because transport costs for goods, peopleand ideas give individuals and organisations incentives to locate close to each other. Historically, allof these costs have been falling. Such changes could lead us to predict the death of distance. Thispaper is concerned with one aspect of this prediction: the impact that less costly communication andtransmission of information might have on cities and the urban structure. We develop a model whichsuggests that improvements in ICT will increase the dispersion of economic activity across citiesmaking city sizes more uniform. We test this prediction using cross country data and find empiricalsupport for this conclusion.
    Keywords: ICT, urban structure, cross country data
    JEL: O3 R1
    Date: 2007–07
  8. By: Nuno Crespo; Isabel Proença; Maria Paula Fontoura
    Abstract: This paper aims to establish whether geographical proximity between the locations of multinational firms and domestic firms facilitates the occurrence of FDI spillovers. Using data for Portugal, this hypothesis is clearly confirmed. However, the impact varies according to whether the externalities considered are horizontal or vertical. In the first case, the impact is negative, which may result from the competition effect at regional level. With regard to vertical externalities, a positive impact through backward linkages is observed. These results raise important implications for the definition of economic policies aiming to attract FDI and promote regional development.
    Keywords: vertical spillovers; horizontal spillovers; multinational firms productivity; FDI.
    JEL: F21 F23
    Date: 2007
  9. By: Ricardo da Silva Freguglia; Naercio Aquino Menezes-Filho
    Date: 2007
  10. By: Chaminade, Cristina; Vang-Lauridsen, Jan
    Abstract: This paper illustrates the importance of global-local linkages in cultural cluster-studies by discussing the impact of Hollywoods runway productions on the indigenous film cluster in Toronto, Canada. While global-local linkages are at the forefront of the current debate in cluster studies, the discussion has not yet permeated the research on cultural clusters. The paper identifies the limitations to the dominant models, inserts global-local linkages in the literature and applies it empirically. The inclusion of the global linkages in the analysis of the Toronto film cluster provides a new insight into the current development barriers faced by the indigenous film industry. The paper suggests how Hollywoods offshoring and outsourcing activities to Toronto can be transformed into positive spillovers for the indigenous film cluster.
    JEL: O31 O32 O33 O34 O38 N5 O47 R58
    Date: 2007
  11. By: David Cutts (University of Manchester); Don Webber (University of the West of England)
    Abstract: There is a growing body of literature which suggests that voting patterns are not independent from space yet few empirical investigations exist which take explicit account of space. This article examines the determinants of voting patterns across constituencies in England and Wales using spatial econometric methods. The results suggest that while socioeconomic factors are key determinants of party vote shares in constituencies, there is strong spatial autocorrelation in voting patterns. We find that each major political party is influenced by space to different extents with the Liberal Democrats visibly exploiting spatial autocorrelation to increase their vote shares.
    Keywords: 2005 General Election, voting patterns, political party spending; spatial regression
    JEL: R59 C21
    Date: 2007–08
  12. By: Radhuber, Michael
    Abstract: For over 60 years conspicuous sums of money have been diverted to southern Italian regions. Nonetheless the positive effect of the so called extraordinary intervention has been limited. The south continues to be characterized by stagnant economies with high unemployment rates and rather low levels of income. Associated therewith are high rates of organized crime, poor public services and many social problems that make life difficult in the Mezzogiorno of Italy. So why did more than 60 years of special policies not lead to the desired outcome? This book is about analysing the economic situation of the Mezzogiorno of Italy on the basis of a comparative descriptive approach, which is later on extended to a sectoral analysis of the southern economy based on an input-output model elaborated by IRPET. This allows for analysis of exogenous growth options (trade) as well as endogenous ones. Special attention is furthermore drawn to the the logistics, that appears to offer significant potential for an economic revival of the southern regions. The characteristic of this book is that it focuses not only on economic issues, but proceeds to check for a link between the economic situation and social issues. Policies have so far been directed mainly to the economic environment. Recent literature has however increasingly focused on social matters that impede higher rates of economic growth. Not only human capital or crime matter, but especially political and institutional characteristics, that can be considered simple mirrors for the grade of civil development of the southern societies. Bureaucracy and the legal system figure amongst the principal culprits for the problematic situation of the Mezzogiorno. In the end civil issues can be considered at least as important for economic prosperity in southern Italy as strictly economic factors.
    Keywords: Mezzogiorno; civil; development; growth; input-output; logistics; institutions; legal; system; social; capital;
    JEL: O1 R0 O2
    Date: 2007–11

This nep-geo issue is ©2007 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.