nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒05‒05
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Agglomeration and Specialisation Patterns of Finnish Biotechnology. On the Search for an Economic Rationale of a Dispersed Industry Structure By Antti-Jussi Tahvanainen; Raine Hermans
  2. Understanding Racial Segregation: What is known about the Effect of Housing Discrimination By Stephen L. Ross
  3. Are Sunnier Cities Denser? By John Hartwick
  4. Localized technological externalities and the geographical distribution of firms By Giulio Bottazzi; Pietro Dindo
  5. Peripherality and the Impact of SME Takeovers By Foreman-Peck, James; Nicholls, Tom
  6. Varieties of Systems of Innovation: A Survey of their Evolution in Growth Theory and Economic Geography By Julian Christ
  7. Les différences régionales de productivité se reflètent-elles dans la formation des salaires ? By Robert Plasman; Michael Rusinek; Ilan Tojerow
  8. Inventors and the Geographical Breadth of Knowledge Spillovers By Paola Giuri; Myriam Mariani
  9. The Fallacy of Crowding-Out: A Note on "Native Internal Migration and the Labor Market Impact of Immigration" By Peri, Giovanni; Sparber, Chad

  1. By: Antti-Jussi Tahvanainen; Raine Hermans
    Abstract: ABSTRACT : This study sets out to inspect empirically whether existing theory in Geographical Economics (GE) is able to provide a rationale for the controversial and much debated structure of the highly knowledge- and research-intensive biotechnology industry in Finland. In addition to providing evidence of GE in action, we integrate the effects that active public technology policy might have on geographic structures of industries into our analysis as a novel discourse. The results provide evidence of a theory based rationale that is able to deepen our understanding of the roles that different regions have enacted in the development of the case industry. Simultaneously, however, the rationale also reveals several challenges that different types of regions still have to overcome in order to steer on a track of sustainable economic development in the future. Based on the results we argue that public sector funding has enabled certain regions to develop in ways that otherwise would not be sustainable.
    Keywords: geographical economics, regional agglomeration, regional specialisation, regional integration
    Date: 2008–04–22
  2. By: Stephen L. Ross (University of Connecticut)
    Abstract: A central purpose of this chapter is to assess whether the available empirical evidence supports the view that current levels of housing discrimination are a significant contributor to residential segregation in U.S. cities and metropolitan areas. Through the course of this chapter, the reader will find that the empirical patterns of racial segregation in the U.S. are often inconsistent the available evidence on housing discrimination. Admittedly, strong evidence exists that both housing discrimination exists today and that housing discrimination throughout much of the Twentieth Century was central to creating the high levels of segregation that we observe in U.S. metropolitan areas today, but the appropriate policy responses may differ dramatically depending upon how these two phenomena are currently interrelated.
    Keywords: Housing Discrimination, Residential Segregation, Neighborhood Quality
    JEL: J7 L85 R21 R30
    Date: 2008–04
  3. By: John Hartwick (Queen's University)
    Abstract: We set out an open, monocentric city with residential structures and reflect on how changes to an amenity index affcts the city. On the production side, the shock is represented by a productivity improvement and a local wage increase and on the consumption side the shock is represented by an exogenous boost to the utility of a resident's current commodity bundle. In each case the city's population, land rent and footprint expand. In the second case there is an increase in density.
    Keywords: urban amenities, density, wages
    JEL: R14 J61
    Date: 2007–03
  4. By: Giulio Bottazzi; Pietro Dindo
    Abstract: This letter investigates the role of technological externalities on the geographical distribution of firms. In an analytically solvable model, we show how the location of economic activities is affected by the trade-off between pecuniary externalities, as dependent on transportation costs, and localized technological externalities, as dependent on inter-regional spillovers.
    Date: 2008–04–24
  5. By: Foreman-Peck, James (Cardiff Business School); Nicholls, Tom
    Abstract: If large companies buy small dynamic enterprises, and move them to the headquarters. location or elsewhere, the process could suppress regional, or dependent, economy income and productivity. We investigate this hypothesis by analysing around 2 million observations of the UK enterprise- level Business Structure Database. Contrary to the experience of large firms, more productive small businesses are more subject to takeover. In addition, SMEs that have been acquired are also more likely to both exit and relocate to another region. This last finding however cuts both ways; a peripheral region or country may receive post-merger companies as well as lose them. With the exception of the core of London and the South East, British regions achieve an approximate numerical balance of relocations from SME takeovers.
    Keywords: SMEs; takeovers; regional development; exits; relocations
    JEL: L23 D21 R11
    Date: 2008–04
  6. By: Julian Christ (Universität Hohenheim)
    Abstract: The systems of innovation (SI) approach has been established and extended during the last two decades. Although elementary goals and progress have been reached through seminal contributions by Freeman (1987), Lundvall (1992) or Nelson (1993), in designing a generic approach, displaying the dynamics of collaboration, networking and interactive learning, criticism has been raised that systems of innovation are still “undertheorized”. The objective of this paper is to describe briefly the historical evolution of the SI concept within the academic literature and the policy sphere. This review primarily attempts to highlight some of the most important contributions that strongly assisted to the framework, by providing more consistency and a more theory- oriented perspective. Consequently, the system concept itself seems to be a kind of “boundary object”. Within both, the academic and the policy field, different levels of conceptualization have been challenged and advanced in the course of time. These conceptualizations basically differ in their scale of analysis, taking geographical perspectives, technologies or sectoral classifications as foci for theorizing and empirical research. Despite these substantial levels of research, the SI framework is increasingly challenged, analyzed and extended in the context of globalization. As a result, regarding the openness and flexibility of the SI approach, this paper particularly tries to focus on the difficulties of contemporary research in defining functional and spatial boundaries in theory and empirical research. Agglomeration tendencies, knowledge externalities and localized learning are primarily based upon the concepts of knowledge diffusion, tacit knowledge and proximity. In spite of that, ICT and global business linkages foster inter-regional and trans-border knowledge flows. Thus, knowledge diffusion is also related to international and global “pipelines” that could support, strengthen and reinforce localized learning.
    Keywords: National, Sectoral, Technological and Regional Systems of Innovation, Geography of Innovation, Knowledge Externalities, Localized Knowledge Spillovers, Knowledge Diffusion, Tacit Knowledge
    JEL: O1 O3 R0 R1 D8 B5
    Date: 2007–11
  7. By: Robert Plasman (DULBEA, Université libre de Bruxelles, Brussels); Michael Rusinek (DULBEA, Université libre de Bruxelles, Brussels); Ilan Tojerow (DULBEA, Université libre de Bruxelles, Brussels)
    Abstract: In Belgium, 2007 has been marked by long coalition negotiations over an agreement on a new government. The main bone of contention had been related to the reform of the Belgian Federal State. Among the suggested reforms, the regionalisation of the collective bargaining system turned out frequently. It relies on the assumption that the productivity differences between regions are not fully taken into account in a federal wage setting system. Our findings challenge this hypothesis by putting forward the current existence of wage differentials between regions and joint committees. We also show that regional wage differentials at the joint committee level are correlated to regional productivity differences. Finally, we find that the correlation between regional wage differentials and productivity is higher in decentralised joint committees. Hence, we conclude that productivity variations are already integrated in the Belgian wage setting system.
    Keywords: Wages, Collective bargaining, Federalism, Regions, Belgium.
    JEL: J31 J52 R11 H77
    Date: 2008–04
  8. By: Paola Giuri; Myriam Mariani
    Abstract: This paper studies the geographical breadth of knowledge spillovers. Previous research suggests that knowledge spillovers benefit from geographical proximity in technologically active and rich regions more than elsewhere. An alternative view explains the geographical breadth of knowledge spillovers as a function of the characteristics and personal networks of the individuals. We test these two competing theories by using information provided directly by the inventors of 6,750 European patents (PatVal-EU survey). Our results confirm the importance of inventors’ personal background. However, compared to previous research, we find that the level of education of the inventors is key in shaping the geographical breadth of knowledge spillovers. Highly educated inventors rely more on geographically wide research networks than their less educated peers. This holds after controlling for the mobility of the inventors and for the scientific nature of the research performed. Differently, location matters only in the very rare regions in Europe that perform the bulk of the research in the specific discipline of the inventors.
    JEL: O31 O33 R19
    Date: 2008
  9. By: Peri, Giovanni (Department of Economics, University of California, Davis); Sparber, Chad (Department of Economics, Colgate University)
    Abstract: In “Native Internal Migration and the Labor Market Impact of Immigration,” George Borjas (2006) identifies a strong negative correlation between immigration and native-born employment in the US using local area data. This relationship is particularly strong at the metropolitan area level, weaker but still significant at the state level, and weakest at the Census region level. In this note, we show that Borjas’s negative correlation arises due to the construction of the dependent and explanatory variables rather than from any true negative association between the employment growth of immigrants and natives. Borjas regresses log native employment, ln(N_t), on the share of foreign-born employment, p_t=M_t/(M_t+N_t), across skill-state-year cells. The specification therefore includes native employment in the numerator of the dependent variable and in the denominator of the explanatory variable. This builds a negative correlation into the model that is particularly strong if the variance of N_t relative to M_t is large. To illustrate, we first show that state and city level regressions of the standardized native employment change, (N_(t+10)-N_t)/(M_t+N_t), on standardized immigration, (M_(t+10)-M_t)/(M_t+N_t), always find a positive and mostly significant correlation between the two. Second, we randomly simulate changes in the native and foreign-born workforce with a data generating process that has zero or positive correlation between the shocks Change_M_t and Change_N_t (i.e., so that immigration is associated with either no change or an increase in native employment). Borjas specifications employing this simulated data estimate large and significantly negative coefficients as long as the variance of Change_N_t is larger than the variance of Change_M_t, which is true in observed data.
    Keywords: Immigration, Crowding Out, Employment Effects
    JEL: J61 R23
    Date: 2008–01–15

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