nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒05‒31
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Local Innovation Systems and Benchmarking By Uwe Cantner
  2. Is Regional Science a Scientific Discipline? Answers from a Citation Based Social Network Analysis By Gunther Maier; Alexander Kaufmann; Michael Vyborny
  4. Innovator networks and regional knowledge base By Uwe Cantner; Andreas Meder; Anne ter Wal
  5. Spatial econometric analysis of the determinants of location of manufacturing industry and market services sectors in Poland By Tomasz Brodzicki; Dorota Ciolek
  6. Reforming Housing and Regional Policies in Korea By Randall Jones; Tadashi Yokoyama
  7. Interaction Structures in Local Innovation Systems By Uwe Cantner; Holger Graf
  8. Spatial Aspects of Trade Liberalization in Colombia:A General Equilibrium Approach By Eduardo Haddad; Jaime Bonet Moron; Geoffrey Hewings; Fernando Perobelli
  9. The impact of network structure on knowledge transfer: An application of social network analysis in the context of regional innovation networks By Michael Fritsch; Martina Kauffeld-Monz
  10. From Baghdad to London: The Dynamics of Urban Growth in Europe and the Arab World, 800-1800 By Bosker, Maarten; Buringh, Eltjo; van Zanden, Jan Luiten
  11. Human Capital Externalities and the Urban Wage Premium: Two Literatures and their Interrelations By Halfdanarson, Benedikt; Heuermann, Daniel F.; Suedekum, Jens
  12. Panel Data Stochastic Convergence Analysis of the Mexican Regions By Josep Lluís Carrion-i-Silvestre; Vicente German-Soto
  13. The comovements of construction in Italy's regions, 1861-1913 By Ciccarelli, Carlo; Fenoaltea, Stefano; Proietti, Tommaso
  14. Have Developed Countries Escaped the Curse of Distance? By Hervé Boulhol; Alain de Serres
  15. Local privatization, intermunicipal cooperation,transaction costs and political interests: Evidence from Spain By Xavier Fageda; Germa Bel

  1. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department)
    Abstract: This paper reviews approaches used for evaluating the performance of local or regional innovation systems. This evaluation is performed by a benchmarking approach in which a frontier production function can be determined, based on a knowledge production function relating innovation inputs and innovation outputs. In analyses on the regional level and especially when acknowledging regional innovation systems those approaches have to take into account cooperative invention and innovation - the core of the innovation system approach. To make these interactive effects visible, a method is suggested to identify the relative regional impact on cooperative innovative activities.
    Keywords: benchmarking, regional innovation systems, frontier function approaches
    JEL: O3 R11 C2 C6
    Date: 2008–05–13
  2. By: Gunther Maier; Alexander Kaufmann; Michael Vyborny
    Date: 2008
  3. By: Jaime Alonso-Carrera; Maria Jesus Freire-Seren; Baltasar Manzano
    Abstract: This paper proposes a multi-regional, general equilibrium model with capital accumulation to analyze the economic impact of the spatial distribution of public capital formation. This model is calibrated and solved by using data for the Spanish economy in order to simulate some comparative dynamic exercises of fiscal policy changes. These analyses illustrate the role that public investment plays in generating the existing imbalances in regional development. This is done by computing the spillover effects and the opportunity costs of regional distribution of public investment. Finally, two rankings of regional priorities in public investment can be derived: one based on the criterion of reducing regional disparities, and other based of an efficiency criterion.
    JEL: E62 H20 O40
    Date: 2008–05
  4. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department); Andreas Meder (Friedrich-Schiller University, Jena, Economics Department); Anne ter Wal (Faculty of Geosciences, Utrecht University)
    Abstract: This paper concerns the regional innovation system approach. It deals with the characteristics of three regional systems, Northern Hesse, Alpes-Maritime and Jena, and focusses on each regional network of innovators. In this context the importance of the size and homogeneity of a regional pool of knowledge spillovers for those networks is analyzed. We ï¬nd evidence that an increasing regional knowledge base in combination with an increas- ing homogeneity of this knowledge base enhances the knowledge flows and the incentives for actors to interact with each other.
    Keywords: cooperation, innovator networks, complementarity of knowledge, interaction structure
    JEL: O31 P25 Q55
    Date: 2008–05–13
  5. By: Tomasz Brodzicki (Faculty of Economics, University of Gdansk); Dorota Ciolek (Faculty of Management, Department of Econometrics, University of Gdansk)
    Abstract: The paper comprises econometric analysis of location determinants of manufacturing industry and market services in Poland. A wide range of location determinants are analyzed taking into account exogenous and semi-endogenous region-specific aspects, sector-specific aspects (such as labor and capital intensity, economies of scale, intensity of forward and backward linkages, wage rates, knowledge intensity and technology level) as well as interactions between sector-specific and region-specific aspects. The analysis is carried out for an unbalanced data panel of manufacturing industry and market services sectors at the level of 3-digit NACE at the NUTS 2 level (16 voivodeships). The data cover the period from 1995 to 2006. We perform the estimation using Restricted Maximum Likelihood method (REML). The results point to positive spatial autocorrelation both for manufacturing industry and market services sectors. Sector-specific and region-specific effects as proxied by sectoral dummies are important.
    Keywords: location, industrial manufacturing, market services, Poland, spatial panel, Restricted Maximum Likelihood method
    JEL: R12 R15 C23 C31
    Date: 2008–05
  6. By: Randall Jones; Tadashi Yokoyama
    Abstract: The government has introduced five policy packages since August 2005 to stabilise house prices, mainly due to concerns about possible spill-overs from the capital region to other parts of the country, even though the increase on a nation-wide basis has been modest compared to other OECD countries. The planned expansion in housing construction in the capital region will reduce upward pressure on house prices. However, other policies aimed at reducing “speculative” demand and lowering house prices, such as the price ceiling on new houses, are likely to constrain supply and result in stronger price pressures in the longer term. The government should shift its focus from short-term price fluctuations in house prices to creating an efficient housing market, relying more on private-sector supply. Concern about increasing concentration in the capital region should be dealt with through economic instruments to address externalities, such as pollution and congestion, while phasing out the restrictions on construction in the capital region. <P>Réformer la politique du logement et la politique régionale en Corée <BR>Le gouvernement a mis en place depuis août 2005 cinq séries de mesures destinées à stabiliser les prix des logements, même si la hausse de l’immobilier a été modeste en Corée par rapport à d’autres pays de l’OCDE. Le développement prévu de la construction de logements dans la région de la capitale atténuera les pressions à la hausse sur les prix immobiliers. Mais d’autres mesures visant à réduire la demande « spéculative » et à faire baisser les prix des logements, notamment le plafonnement des prix des logements neufs, sont de nature à limiter l’offre et à accentuer les pressions sur les prix à long terme. Au lieu d’essayer avant tout de remédier aux fluctuations à court terme des prix immobiliers, le gouvernement devrait s’efforcer de créer un marché du logement qui soit efficient, tout en s’appuyant davantage sur l’offre privée. Face au problème de la concentration de plus en plus forte dans la région de la capitale, il faudrait utiliser des instruments économiques pour remédier aux externalités, en particulier la pollution et les encombrements, tout en mettant fin progressivement aux restrictions à la construction dans la région de la capitale.
    Keywords: Korea, Corée, fiscal decentralisation, house prices, property tax, impôt immobilier, regional policy, politique régionale, housing market, marché des logements
    JEL: R11 R21 R31
    Date: 2008–05–16
  7. By: Uwe Cantner (Friedrich-Schiller University, Jena, Economics Department); Holger Graf (Friedrich-Schiller University, Jena, Economics Department)
    Abstract: The flow of knowledge through interaction between innovative actors is central to the systemic view of innovation. We review the lite ature on interaction and innovator networks with a focus on regional aspects. To illustrate the relevance of these relations, we apply social network analysis methods to describe the evolution of the innovator network of Jena, Germany in the period from 1995 to 2001. During this period, the network is characterised by growth in the number of patents, actors and relations, with central positions of public research. The evolution is directed towards an increasing focus on core compe- tencies of the network.
    Keywords: Innovator Networks, Innovation System, R+D Cooperation. Mobility
    JEL: O31 L14 R11
    Date: 2008–05–08
  8. By: Eduardo Haddad; Jaime Bonet Moron; Geoffrey Hewings; Fernando Perobelli
    Abstract: This paper offers some preliminary steps in the marriage of some of the theoretical foundations of the new economic geography with spatial computable general equilibrium models. Modeling the spatial economy of Colombia using the traditional assumptions of CGE models makes little sense when one territorial unit, Bogotá, accounts for over one fourth of GDP and where transportation costs are high and accessibility low, compared to European or North American standards. Hence, handling market imperfections becomes imperative as does the need to address internal spatial issues from the perspective of Colombia’s increasing involvement with external markets. The paper builds on the CEER Model, a spatial CGE model of the Colombian economy; non-constant returns and non-iceberg transportation costs are introduced and some simulation exercises are carried out. The results confirm the asymmetric impacts that trade liberalization has on a spatial economy in which one region, Bogotá, is able to more fully exploit scale economies vis-à-vis the rest of Colombia. The analysis also reveals the importance of different hypotheses on factor mobility and the role of price effects to better understand the consequences of trade opening in a developing economy.
    Date: 2008–05–21
  9. By: Michael Fritsch (Friedrich Schiller University Jena, German Institute for Economic Research (DIW-Berlin), and Max Planck Institute of Economics, Jena, Germany); Martina Kauffeld-Monz (Institute for Urban Science and Structural Policy (IfS Berlin), Germany)
    Abstract: We analyze information and knowledge transfer in a sample of 16 German regional innovation networks with almost 300 firms and research organizations involved. The results indicate that strong ties are more beneficial for the exchange of knowledge and information than weak ties. Moreover, our results suggest that broker positions tend to be associated with social returns rather than with private benefits.
    Keywords: Regional innovation networks, R+D-collaboration, knowledge exchange, social network analysis, strong ties, knowledge brokers
    JEL: D83 D85 L14 O32
    Date: 2008–05–06
  10. By: Bosker, Maarten; Buringh, Eltjo; van Zanden, Jan Luiten
    Abstract: On the basis of a large (new) dataset of cities in Europe, North Africa and the Middle East in the millennium between 800 and 1800, we try to provide an answer to the question why, during this millennium, the urban center of gravity moved from Iraq (or more generally the Arab world) to Western Europe and to the shores of the Atlantic (during the 17th and 18th century) in particular. We study the characteristics of the European and Arab urban systems involved, amongst others focusing on the interaction between cities, and explain why one system was much more dynamic in the long run than the other. Also we assess the importance of various geographical, religious and institutional factors as the driving forces of urban expansion. Overall, we provide a better understanding of the dynamics of urban growth in the centuries leading up to the Industrial Revolution and an answer to the question why London, an economic backwater in 800, was able to overtake Baghdad, in 800 the thriving capital of the Abbasid caliphate, as the largest city in this part of the world.
    Keywords: long term urban development; Arab world; economic history; Europe
    JEL: N10 N90 R11
    Date: 2008–05
  11. By: Halfdanarson, Benedikt (Statistics Iceland); Heuermann, Daniel F. (University of Trier); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: In this paper we survey the recent developments in two empirical literatures at the crossroads of labor and urban economics: Studies about localized human capital externalities (HCE) and about the urban wage premium (UWP). After surveying the methods and main results of each of these two literatures separately, we highlight several interrelations between them. In particular we ask if HCE can be interpreted as one fundamental cause of the UWP, and we discuss if one literature can conceptually learn from the methods that are used by the other one.
    Keywords: local labor markets, agglomeration, human capital externalities, urban wage premium
    JEL: J31 J61 R23 R12
    Date: 2008–05
  12. By: Josep Lluís Carrion-i-Silvestre (Faculty of Economics, University of Barcelona); Vicente German-Soto (Facultad de Economía, Universidad Autónoma de Coahuila.)
    Abstract: The stochastic convergence amongst Mexican Federal entities is analyzed in panel data framework. The joint consideration of cross-section dependence and multiple structural breaks is required to ensure that the statistical inference is based on statistics with good statistical properties. Once these features are accounted for, evidence in favour of stochastic convergence is found. Since stochastic convergence is a necessary, yet insufficient condition for convergence as predicted by economic growth models, the paper also investigates whether beta-convergence process has taken place. We found that the Mexican states have followed either heterogeneous convergence patterns or divergence process throughout the analyzed period.
    Keywords: Stochastic convergence, beta-convergence, non-stationarity panel data tests, cross-section dependence, multiple structural breaks.
    JEL: C12 C22 C32 O40 R11
    Date: 2008–04
  13. By: Ciccarelli, Carlo; Fenoaltea, Stefano; Proietti, Tommaso
    Abstract: This paper examines the comovements of construction in Italy's regions from 1861 to 1913. The dynamic correlations of the series' deviation cycles decline in the case of buildings, remain very low in that of railways, and tend to decline in that of other infrastructure; the total-construction correlations instead peak in the 1870s, and again after 1900. Long-term comovements are examined by tracking the dispersion of the first differences of the measured trends. Increasing dispersion is obtained in the construction of buildings and of non-rail infrastructure; railway construction displayed a dramatic decline in dispersion, which dominates the aggregate.
    Keywords: construction; regions ; post-Unification Italy; trends; cycles; comovements
    JEL: H54 N63 E32 C14 N13
    Date: 2008–05–23
  14. By: Hervé Boulhol; Alain de Serres
    Abstract: There is widespread evidence that a better access to markets contributes to raising income levels. However, no quantification of the impact of distance to markets has been made on the basis of a sample restricted to advanced — and therefore more homogeneous — countries. This paper applies the framework developed by Redding and Venables (2004) on a panel data covering 21 OECD countries over 1970-2004, and shows that, relative to the average OECD country, the cost of remoteness for countries such as Australia and New Zealand could be as high as 10% of GDP. Conversely, the benefit for centrally-located countries like Belgium and the Netherlands could be around 6-7%. Second, the paper explains why the key estimated parameter in the Redding-Venables model is biased upwards in cross-section samples that mix both developing and developed countries, because of the inability to adequately control for heterogeneity in technology levels across countries. The paper also provides a detailed discussion of the links between the ?death-of-distance? hypothesis, the evolution of transport costs and that of the elasticity of trade to distance. <P>Les pays développés ont-ils échappé à la malédiction de la distance ? <BR>De nombreuses études empiriques ont montré qu‘un meilleur accès aux marchés contribue à augmenter les revenus. Cependant, aucune quantification de l‘impact de la distance aux marchés n‘a été effectuée à partir d‘un échantillon homogène limité aux pays développés. Ce papier applique le cadre développé par Redding and Venables (2004) à des données de panel couvrant 21 pays de l‘OCDE entre 1970 et 2004, et montre que, relativement à la moyenne des pays de l‘OCDE, le coût de l‘éloignement géographique pour des pays comme l‘Australie et la Nouvelle Zélande s‘élève à environ 10% de PIB. Réciproquement, le bénéfice que tirent les pays ayant une position centrale comme la Belgique et les Pays-Bas serait de l‘ordre de 6-7%. Deuxièmement, cette étude explique pourquoi le paramètre-clé dans le modèle Redding-Venables est biaisé à la hausse dans des échantillons en coupe qui mêlent pays développés et en développement, en raison de l‘incapacité à contrôler l‘hétérogénéité des niveaux technologiques entre pays. Le papier propose également une discussion détaillée des liens entre l‘hypothèse de la « fin de la distance », l‘évolution des coûts de transport et celle de l‘élasticité du commerce à la distance.
    Keywords: market access, accès aux marchés, distance
    JEL: F12 F15 R11 R12
    Date: 2008–05–15
  15. By: Xavier Fageda (Faculty of Economics, University of Barcelona); Germa Bel (Faculty of Economics, University of Barcelona)
    Abstract: Several empirical studies have analyzed the factors that influence local privatization. Variables related to fiscal stress, cost reduction, political processes and ideological attitudes are the most common explanatory variables used in these studies. In this paper, we add to this literature by examining the influence of transaction costs and political factors on local governments’ choices through new variables. In addition to this, we consider the role of additional aspects, such as intermunicipal cooperation as a potential alternative to privatization in order to exploit scale economies or scope economies. We consider two relevant services: solid waste collection and water distribution. Results from our estimates show that privatization (that is, contracting out to a private firm) is less common for water distribution than for solid waste collection. Higher transaction costs in water distribution are consistent with this finding. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. This shows that those political interests able to influence local elections are more important in determining the form of delivery than is the basic ideological stance of the constituency. Finally, we find that intermunicipal cooperation is an alternative to local privatization.
    Keywords: Privatization, contracting-out, local governments
    JEL: L33 R51 H72
    Date: 2008–04

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