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on Economic Geography |
| By: | Wouter Vermeulen (CPB, The Hague, and VU University Amsterdam); Jos van Ommeren (Vrije Universiteit Amsterdam) |
| Abstract: | Why has job growth over the past decades been weaker in the Dutch Randstad area than in surrounding regions? In a simultaneous equations analysis, we find that employment adjusts to the regional supply of labour. Net internal migration is predominantly determined by regional housing supply and not by employment growth. Growth of the regional housing stock responds only moderately to changes in the number of people and jobs. This lack of responsiveness to demand conditions is plausibly related to restrictions on residential development, implying that the regional distribution of economic activity in the Netherlands reflects land use planning decisions. |
| Keywords: | housing supply; land use regulation; regional labour markets; regional development |
| JEL: | J61 R12 R23 R31 R52 |
| Date: | 2007–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080004&r=geo |
| By: | Maria Francesca Cracolici (University of Palermo); Miranda Cuffaro (University of Palermo); Peter Nijkamp (VU University, Amsterdam) |
| Abstract: | Unemployment rates appear to vary widely at a subregional (e.g., local or provincial) level. Using spatial econometric models for spatial autocorrelation, this paper focuses attention on the spatial structure of regional unemployment disparities of Italian provinces. On the basis of findings from the economic literature and of the available socio-economic data, various model specifications including different explanatory variables are tested to investigate the geographical distribution of unemployment in the 103 provinces of Italy for the years 1998 and 2003. The results suggest that there is a clear explanation of unemployment differentials in terms of spatial equilibrium and disequilibrium factors and a significant degree of spatial dependence among labour markets at the provincial level in Italy. Provinces marked by high unemployment, as well as those characterized by low unemployment, tend to be spatially clustered, demonstrating the presence of unemployment ‘persistency’ in space and time regimes. |
| Keywords: | unemployment; spatial lag model; spatial autocorrelation; Italian provinces |
| JEL: | C21 R12 R23 |
| Date: | 2007–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070065&r=geo |
| By: | Henri L.F. de Groot (Vrije Universiteit Amsterdam and Tinbergen Institute); Jacques Poot (University of Waikato); Martijn J. Smit (Vrije Universiteit Amsterdam) |
| Abstract: | Technological change and innovation and are central to the quest for regional development. In the globally-connected knowledge-driven economy, the relevance of agglomeration forces that rely on proximity continues to increase, paradoxically despite declining real costs of information, communication and transportation. Globally, the proportion of the population living in cities continues to grow and sprawling cities remain the engines of regional economic transformation. The growth of cities results from a complex chain that starts with scale, density and geography, which then combine with industrial structure characterised by its extent of specialisation, competition and diversity, to yield innovation and productivity growth that encourages employment expansion, and further urban growth through inward migration. This paper revisits the central part of this virtuous circle, namely the Marshall-Arrow-Romer externalities (specialisation), Jacobs externalities (diversity) and Porter externalities (competition) that have provided alternative explanations for innovation and urban growth. The paper evaluates the statistical robustness of evidence for such externalities presented in 31 scientific articles, all building on the seminal work of Glaeser et al. (1992). We aim to explain variation in estimation results using study characteristics by means of ordered probit analysis. Among the results, we find that the impact of diversity depends on how it is measured and that diversity is important for the high-tech sector. High population density increases the chance of finding positive effects of specialisation on growth. More recent data find more positive results for both specialization and diversity, suggesting that agglomeration externalities become more important over time. Finally, primary study results depend on whether or not the externalities are considered jointly and on other features of the regression model specification. |
| Keywords: | innovation; regional development; agglomeration; urban externalities; meta-analysis |
| JEL: | C52 O18 O31 R11 |
| Date: | 2008–02–04 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:08/01&r=geo |
| By: | Jaume Puig; Jaime Pinilla |
| Abstract: | This article investigates the main sources of heterogeneity in regional efficiency. We estimate a translog stochastic frontier production function in the analysis of Spanish regions in the period 1964-1996, to attempt to measure and explain changes in technical efficiency. Our results confirm that regional inefficiency is significantly and positively correlated with the ratio of public capital to private capital. The proportion of service industries in the private capital, the proportion of public capital devoted to transport infrastructures, the industrial specialization, and spatial spillovers from transport infrastructures in neighbouring regions significantly contributed to improve regional efficiency. |
| Keywords: | Regional efficiency, Regional spillovers, Human capital, Public capital |
| JEL: | C23 H54 R11 R53 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:1067&r=geo |
| By: | Roberto Basile |
| Abstract: | The regional distribution of labor productivity in Western Europe is characterised by a Core-Periphery spatial pattern: high (low) productivity regions are in a proximate relationship with other high (low) productivity regions. Over the last twenty years, intra-distribution dynamics has generated long-run multiple equilibria with the formation of two clubs of convergence. The observed dynamics can be only marginally explained by nonlinear effects in the accumulation of physical capital. In contrast, the joint effect of spatial dependence and nonlinearities in growth behavior plays a key role in determining multiple equilibria and reinforcing polarization of labor productivity. |
| Keywords: | distribution dynamics, convergence, spatial dependence, Europe |
| JEL: | R11 R12 C14 C21 |
| Date: | 2007–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:20070410&r=geo |
| By: | Henri L.F. de Groot (Vrije Universiteit Amsterdam); Jacques Poot (University of Waikato, Hamilton, NZ); Martijn J. Smit (Vrije Universiteit Amsterdam) |
| Abstract: | Innovation and technological change are central to the quest for regional development. In the globally-connected knowledge-driven economy, the relevance of agglomeration forces that rely on proximity continues to increase, paradoxically despite declining real costs of information, communication and transportation. Globally, the proportion of the population living in cities continues to grow and sprawling cities remain the engines of regional economic transformation. The growth of cities results from a complex chain that starts with scale, density and geography, which then combines with industrial structure characterised by its extent of specialisation, competition and diversity, to yield innovation and productivity growth that encourages employment expansion, and further urban growth through inward migration. This paper revisits the central part of this virtuous circle, namely the Marshall-Arrow-Romer externalities (specialisation), Jacobs externalities (diversity) and Porter externalities (competition) that have provided alternative explanations for innovation and urban growth. The paper evaluates the statistical robustness of evidence for such externalities presented in 31 scientific articles, all building on the seminal work of Glaeser et al. (1992). These articles yield 393 estimates of those externalities, which are characterized by their sign and statistical significance. We aim to explain variation in estimation results using study characteristics by means of ordered probit analysis. The evidence in the literature on the role of the specific externalities is rather mixed, although for each type of externality we can identify how various aspects of primary study design, such as the adopted proxy for growth, the data used, and the choice of covariates influence the outcomes. |
| Keywords: | innovation; regional development; agglomeration; urban externalities; meta-analysis |
| JEL: | C52 O18 O31 R11 |
| Date: | 2007–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070079&r=geo |
| By: | Laura de Dominicis (VU University Amsterdam); Giuseppe Arbia ('G. d'Annunzio' University, Pescara, Italy); Henri L.F. de Groot (VU University Amsterdam) |
| Abstract: | Existing indices measuring the spatial distribution of economic activity such as the Krugman Specialisation Index, the Hirschmann-Herfindahl index and the Ellison-Glaeser index typically do not take into account the spatial structure of the data. In this paper, we first consider traditional measures of geographical concentration, and subsequently extend the analysis to take spatial dependence into account. Using data for Italy for the years 1991 and 2001, we apply exploratory spatial data analysis to identify sectoral location patterns in both the manufacturing industry as well as in services. We find that large differences prevail in the geographical concentration of production across sectors. The results of the exploratory spatial data analysis reveal the existence of well- defined clusters of economic activities. |
| Keywords: | Exploratory Spatial Data Analysis; Geographic Concentration; Italy; Spatial Autocorrelation |
| JEL: | C12 R12 R30 |
| Date: | 2007–12–03 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070094&r=geo |
| By: | Laura Hering; Sandra Poncet |
| Abstract: | This paper contributes to the analysis of growing income disparities within China. Based on a structural model of economic geography using data on per capita income, we evaluate the extent to which market proximity and spatial dependence can explain growing income inequality between Chinese cities. We rely on a data set of 195 Chinese cities between 1995 and 2002. Our econometric specification incorporates an explicit consideration of spatial dependence effects in the form of spatially lagged per capita income. We provide evidence that the geography of access to markets is statistically significant in explaining variation in per capita income in China, especially so in provinces with low migration inflows which is coherent with NEG theory. |
| Keywords: | Income inequality; economic geography; spatial dependence; China |
| JEL: | E1 O1 O5 R1 |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2007-22&r=geo |
| By: | Sandra Phlippen (Erasmus University Rotterdam); Bert van der Knaap (Erasmus University Rotterdam) |
| Abstract: | Policy makers spend large amounts of public resources on the foundation of science parks and other forms of geographically clustered business activities, in order to stimulate regional innovation. Underlying the relation between clusters and innovation is the assumption that co-located firms engaged in innovative activities benefit from knowledge that diffuses locally. In order to access this knowledge, firms are often required to form more- or less formal relations with co-located firms. Empirical evidence shows however that besides some success cases like Silicon Valley and the Emilia- Romagna region where firms collaborate intensively, many regional clusters are mere co-locations of firms. To enhance our understanding of why some clusters become networks of strategic collaboration and others don’t, we study link formation within European biopharmaceutical clusters. More specifically we look at the effect of cluster characteristics such as number of start-up firms, established firms or academic institutions, or the nature of the collaborations on the probability of local link formation |
| Keywords: | regional clusters; networks; local & global linkages; pharmaceutical industry |
| JEL: | R11 R12 R58 D83 D85 |
| Date: | 2007–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070100&r=geo |
| By: | Baldwin, John R.; Brown, W. Mark; Rigby, David |
| Abstract: | Productivity and wages tend to be higher in cities. This is typically explained by agglomeration economies, which increase the returns associated with urban locations. Competing arguments of specialization and diversity undergird these claims. Empirical research has long sought to confirm the existence of agglomeration economies and to adjudicate between the models of Marshall, Arrow and Romer (MAR) that suggest the benefits of proximity are largely confined to individual industries, and the claims of Jacobs (1969) that such benefits derive from a general increase in the density of economic activity in a particular place and are shared by all occupants of that location. The primary goal of this paper is to identify the main sources of urban increasing returns, after Marshall (1920). A secondary goal is to examine the geographical distance across which externalities flow between businesses in the same industry. We bring to bear on these questions plant-level data organized in the form of a panel across the years 1989 and 1999. The panel data overcome selection bias resulting from unobserved plant-level heterogeneity that is constant over time. Plant-level production functions are estimated across the Canadian manufacturing sector as a whole and for five broad industry groups, each characterized by the nature of their output. Results provide strong support for Marshall's (1920) claims about the importance of buyer-supplier networks, labour market pooling and spillovers. The data show spillovers enhance plant productivity within industries rather than between them and that these spillovers tend to be more spatially extensive than previous studies have found. |
| Keywords: | Manufacturing, Business performance and ownership, Economic accounts, Regional and urban profiles, Productivity accounts |
| Date: | 2008–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp5e:2008049e&r=geo |
| By: | Roberto Basile; Davide Castellani; Antonello Zanfei |
| Abstract: | In this paper we examine the determinants of location choices of multinational firms in Europe. In particular, we focus on the role of EU Cohesion Policy in attracting foreign investors from both within and outside Europe. Using data on 5,509 foreign subsidiaries established in 50 regions in 8 EU countries over the period 1991-1999, we estimate a mixed logit model of the determinants of MNFs’ location choices. We find that, after controlling for the role of agglomeration economies as well as a number of other regional and country characteristics and allowing for a very flexible correlation pattern among choices, Structural and Cohesion funds allocated by the EU to laggard regions have indeed contributed to attracting multinationals. These policies as well as other determinants play a different role in the case of European investors as opposed to non European ones. |
| Keywords: | Europe; Foreign Direct Investments; Location Choice; Mixed Logit Models |
| JEL: | F23 O52 R30 |
| Date: | 2007–04–31 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:20070431&r=geo |
| By: | Jan Rouwendal (VU University Amsterdam); Simonetta Longhi (ISER, University of Essex) |
| Abstract: | Even though economic models have been relatively successful in explaining the long run patterns of house prices, they have more difficulties in explaining short run developments of the housing markets. However, the fact that during such ‘bubbles’ the spatial pattern of house prices, which can mainly be attributed to accessibility differences, usually remains unchanged, suggests that the irrational forces that are presumably responsible for unexplained movements in house prices obey some regularities: they seem to affect the level of house prices, but not their spatial pattern. This suggests that it is worthwhile to consider the explanatory power of psychological variables like those reflecting general (nation wide) feelings of optimism or pessimism. This paper considers the development of Dutch house prices in the years 1999 and 2000, when house prices increased fast. Existing explanations of the long run development of Dutch house prices on the basis of economic fundamentals (notably income and the mortgage interest rate) would suggest a much more modest development of house prices over these years. We also show that commonly used housing market indicators, notably the number of vacancies (houses for sale) and the time on the market, are unable to explain the development of house prices during this period. However, we find a strong relationship between the development of house prices and the Dutch index of consumer confidence. |
| Keywords: | House Prices; Consumer Confidence; Bubbles |
| JEL: | R31 R21 D84 E31 D40 |
| Date: | 2007–10–04 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20070078&r=geo |
| By: | Martellosio, Federico |
| Abstract: | This paper derives some exact power properties of tests for spatial autocorrelation in the context of a linear regression model. In particular, we characterize the circumstances in which the power vanishes as the autocorrelation increases, thus extending the work of Krämer (2005, Journal of Statistical Planning and Inference 128, 489-496). More generally, the analysis in the paper sheds new light on how the power of tests for spatial autocorrelation is affected by the matrix of regressors and by the spatial structure. We mainly focus on the problem of residual spatial autocorrelation, in which case it is appropriate to restrict attention to the class of invariant tests, but we also consider the case when the autocorrelation is due to the presence of a spatially lagged dependent variable among the regressors. A numerical study aimed at assessing the practical relevance of the theoretical results is included. |
| Keywords: | Cliff-Ord test; invariant tests; linear regression model; point optimal tests; power; similar tests; spatial autocorrelation. |
| JEL: | C12 C31 C21 C01 |
| Date: | 2008–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7255&r=geo |
| By: | Jan Rouwendal (VU University Amsterdam); J. Willemijn van der Straaten (VU University Amsterdam, and CPB Netherlands Bureau for Economic Policy Analysis, The Hague) |
| Abstract: | Although many researchers have investigated the value of open space in cities, few of them have compared them to the costs of providing this amenity. In this paper, we use the monocentric model of a city to derive a simple cost-benefit rule for the optimal provision of open space. The rule is essentially the Samuelson-condition for the optimal provision of a public good, with the price of land as the appropriate indicator for its cost. The condition is made operational by computing the willingness to pay for public and private space on the basis of empirical hedonic price functions for three Dutch cities. The conclusions with respect to the optimal provision of open space differ between the three cities. Further investigation reveals that willingness to pay for parks and public gardens increases with income, although not as fast as that for private residential space. |
| Keywords: | spatial planning; provision of public goods; cost-benefit analysis |
| JEL: | R52 H41 D61 |
| Date: | 2008–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080001&r=geo |
| By: | Guillaume POUYANNE (GREThA) |
| Abstract: | Although it is frequent, discontinuous (leapfrog) development has rarely been addressed by the literature, because traditional models are unable to conceive diverse urban forms. This article is a survey of theoretical explanations of discontinuous development. It follows two parts. First, taking in account uncertainty on future returns drives to include an option value in land prices. Landlords speculate on the future value of the land and may leave vacant their plot in order to take advantage of high future returns. Second, discontinuous development is the product of a preference for open space. Natural amenities are included in land prices and provoke a dispersion of developed lots. These mechanisms are reinforced by a vote “against growth” by the inhabitants, which drives to a severe control of new developments. |
| Keywords: | discontinuous development, leapfrog development, speculation, amenities, urban sprawl, urban form |
| JEL: | R14 R21 R31 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-07&r=geo |
| By: | Marcello Signorelli; Enrico Marelli |
| Abstract: | The aim of this paper is to throw some light on the main differences/similarities and dynamics in institutional frameworks, regional/sectoral features and aggregate performances in the eight transition countries that became EU members in May 2004 (8-CEECs). In the second section, a partial review of the main theoretical and empirical literature on the "great transformation" (Kornai, 2006) is presented, with a particular attention to the researches focusing on the relationship between institutional change and economic/employment performance and to the studies considering some regional features of the transition processes. Some stylized facts for the eight CEECs are presented in the third section, by distinguishing (i) initial conditions, (ii) institutional changes and progress in transition and (iii) economic/employment performance (GDP growth, unemployment and employment rates, etc.). In the forth section, the empirical results on some regional (NUTS 3) features (convergence, concentration and specialisation) of the 8-CEECs are discussed. Finally, an attempt to econometrically investigate some determinants of regional income convergence and national GDP and employment dynamics is presented in the fifth section, by highlighting the role of institutional change and some regional features. The main policy implications, concerning both European and national economic policies, are presented in the conclusive section. |
| Keywords: | Transition countries, institutional change, regional features, aggregate performance |
| JEL: | P52 R11 P25 P27 |
| Date: | 2007–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:20070901&r=geo |
| By: | Glenn Ellison (Masachusetts Institute of Technology, Department of Economics and NBER); Edward L. Glaeser (Harvard University, John F. Kennedy School of Government; Faculty of Arts and Sciences and NBER); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit) |
| Abstract: | Many industries are geographically concentrated. Many mechanisms that could account for such agglomeration have been proposed. We note that these theories make different predictions about which pairs of industries should be coagglomerated. We discuss the measurement of coagglomeration and use data from the Census Bureau’s Longitudinal Research Database from 1972 to 1997 to compute pairwise coagglomeration measurements for U.S. manufacturing industries. Industry attributes are used to construct measures of the relevance of each of Marshall’s three theories of industry agglomeration to each industry pair: (1) agglomeration saves transport costs by proximity to input suppliers or final consumers, (2) agglomeration allows for labor market pooling, and (3) agglomeration facilitates intellectual spillovers. We assess the importance of the theories via regressions of coagglomeration indices on these measures. Data on characteristics of corresponding industries in the United Kingdom are used as instruments. We find evidence to support each mechanism. Our results suggest that input-output dependencies are the most important factor, followed by labor pooling. |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:07-064&r=geo |
| By: | No, Angela |
| Abstract: | This paper examines the presence of knowledge spillovers that affect the adoption of advanced technologies in the Canadian manufacturing sector. It examines whether plants that adopt advanced technologies are more likely to do so when there are other nearby plants that do so within a model of technology adoption. |
| Keywords: | Information and communications technology, Manufacturing, Business performance and ownership, Economic accounts, Regional and urban profiles, Productivity accounts |
| Date: | 2008–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:stc:stcp1e:2008018e&r=geo |
| By: | Matić, Branko; Serdarušić, Hrvoje |
| Abstract: | The paper discusses the reasons for the low development level of Eastern Croatia, as well as possible ways of overcoming this situation. The revenues of local and regional self-government are frequently insufficient to finance development projects. Different characteristics of these fiscalities, such as permanent income and changes in managing this income can reduce the costs and result in more prudent and economical stewardship of local and regional authorities. This refers primarily to concentrating public resources in one commercial bank, which would establish a kind of partnership between the bank and the local community. The paper further examines the influence of ownership structure and bank's domicile on business policies of the banks operating in Eastern Croatia. The proposed changes together with new ways of financing, such as issuing securities, could generate new positive effects in financing regional development. |
| Keywords: | regional development; financing; banks |
| JEL: | O1 G2 G3 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:7022&r=geo |
| By: | Dan Bogart (Department of Economics, University of California-Irvine) |
| Abstract: | How does the development of one transport mode influence the development of another? This paper uses time-series data to test whether inter-model network externalities influenced the development of road, canal, and port infrastructure in England from 1760 to 1830. The main finding is that road development had a positive effect on canal development. The results suggest that the option value of investing in a canal in the future diminished when nearby road improvements were initiated because there was less uncertainty about future profits from canal tolls. They also suggest a reinterpretation of road transport in the Industrial Revolution and point to the general importance of inter-modal network externalities. |
| Keywords: | Inter-modal network externalities; British transport; Industrial Revolution |
| JEL: | R40 R50 N73 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:irv:wpaper:070812&r=geo |
| By: | Kurt Niquidet; Bruce Manley |
| Abstract: | In this paper the integration of log prices across four regions in New Zealand was assessed. A time series of prices for six Radiata Pine (Pinus radiata D. Don) log grades in each of the regions were tested for co-integration using Johansen’s method and Engle-Granger pair wise tests. Prices for export grades display significant integration across regions and generally follow the law of one price. However, markets for domestic grades tend to be regionally segregated. These results are most likely due to the high costs of transporting logs between regions. Future modelling will need to incorporate such transportation costs in order to adequately characterise log markets in the country. |
| Keywords: | log market; co-integration; law of one price |
| JEL: | Q23 R32 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2008-03&r=geo |
| By: | Claude DUPUY (GREThA-GRES); Stéphanie LAVIGNE (LEREPS-GRES & Toulouse Business School |
| Abstract: | The article investigates the geography of finance via an analysis of the investment behavior of large international equity investors. The main argument is based on the importance of financial markets and capital flows and on the central role played in them by institutional investors, the key actors of capitalism. This paper is original because it introduces geographic criteria, and thus institutional and cultural factors, for understanding the behaviour of investors. We present evidence on the diversity of models of capitalism while questioning the convergence of national economies and markets towards a pattern often termed “the Anglo-Saxon model”. |
| Keywords: | institutional investors, geography of finance, models of capitalism, financial markets |
| JEL: | G15 G23 R00 P10 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2008-04&r=geo |