nep-geo New Economics Papers
on Economic Geography
Issue of 2008‒06‒21
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Spatial Concentration and Firm-Level Productivity in France By Martin, Philippe; Mayer, Thierry; Mayneris, Florian
  2. Structural Interdependence among Colombian Departments By Eduardo A. Haddad; Fernando S. Perobelli; Jaime Bonet; Geoffrey J. D. Hewings
  3. Agglomeration Externalities and Localized Employment Growth By Friso de Vor; Henri L.F. de Groot
  4. Does urban sprawl increase the costs of providing local public services? Evidence from Spanish municipalities By Albert Solé-Ollé; Miriam Hortas Rico
  5. Innovation driven sectoral shocks and aggregate city cycles By Andrea R. Lamorgese
  6. Net Taxes,Income Stabilization and Regional Job Flows in Sweden By Andersson, Linda
  7. Bridge to Somewhere: The Value of Auckland's Northern Motorway Extensions By Arthur Grimes; Yun Liang
  8. Land-use planning and public preferences: What can we learn from choice experiments method? By Rambonilaza, Tina
  9. Distribuição Espacial da Ocupação no Setor de Turismo: Brasil e Regiões By Margarida Hatem Pinto Coelho
  10. Analysing Convergence in Europe Using a Non-linear Single Factor Model By Ulrich Fritsche; Vladimir Kuzin
  11. Open and closed industry clusters: The social structure of innovation By Manuel Portugal Ferreira; Fernando A. Ribeiro Serra
  12. CBPRS: A City Based Parking and Routing System By Boehlé, J.L.; Rothkrantz, L.J.M.; Wezel, M.C. van
  13. Analysis of Spatial Disparities by a Structural Equations Model By Maria Francesca Cracolici; Miranda Cuffaro; Peter Nijkamp
  14. Pricing, Capacity and Long-run Cost Functions for First-best and Second-best Network Problems By Erik T. Verhoef; Andrew Koh; Simon Shepherd
  15. Congestion Pricing, Slot Sales and Slot Trading in Aviation By Erik T. Verhoef

  1. By: Martin, Philippe; Mayer, Thierry; Mayneris, Florian
    Abstract: This paper analyzes empirically the effect of spatial agglomeration of activities on the productivity of firms using French individual firm data from 1996 to 2004. This allows us to control for endogeneity biases that the estimation of agglomeration economies typically encounters. French firms benefit from localization economies, but not from urbanization economies nor from competition effects. The benefits generated by increased sectoral clustering, though positive and highly significant are modest and geographically very limited. The gains from clusters are also quite well internalized by firms in their location choice: we find very little difference between the geography that would maximize productivity gains and the geography actually observed.
    Keywords: clusters; localization economies; productivity; spatial concentration
    JEL: C23 R10 R11 R12
    Date: 2008–06
  2. By: Eduardo A. Haddad; Fernando S. Perobelli; Jaime Bonet; Geoffrey J. D. Hewings
    Abstract: This paper advances on the analysis of the structural interdependence among Colombian departments. The results show that Bogotá has a large influence in the other regional economies through its purchasing power. Additionally, it can be observed a centerperiphery pattern in the spatial concentration of the effects of the hypothetical extraction of any territory. From a policy point of view, the main findings reaffirm the role played by Bogotá in the polarization process observed in the regional economies in Colombia in the last years. Any policy action oriented to reduce these regional disparities should take into account that, given the structural interdependence among Colombian departments, new investment in the lagged regions would flow through Bogotá and the major regional economies.
    Date: 2008–06–10
  3. By: Friso de Vor (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam)
    Abstract: This paper addresses the question to what extent the performance of industrial sites is affected by their local economic structure and accessibility. For this aim, we test for the existence of statistically significant relationships between agglomeration externalities (specialization, diversity, and competition), accessibilty measures and the employment growth of a particular industry on a particular site. We use data on employment growth of site-industries on 68 formal industrial sites in the municipality of Amsterdam between 1998 and 2006. We show that at the site-industry level, specialization hampers growth. Furthermore, we find that industrial sites that are easily accessible from the highway grow relatively fast, as well as sites located in the Amsterdam harbour area.
    Keywords: industrial sites; agglomeration externalities; employment growth; spatial heterogeneity; accessibility
    JEL: C31 O18 R11
    Date: 2008–03–27
  4. By: Albert Solé-Ollé (Universitat de Barcelona & IEB); Miriam Hortas Rico (Universitat de Barcelona & IEB)
    Abstract: This paper examines the impact of urban sprawl, a phenomenon of particular interest in Spain, which is currently experiencing this process of rapid, low-density urban expansion. Many adverse consequences are attributed to urban sprawl (e.g., traffic congestion, air pollution and social segregation), though here we are concerned primarily with the rising costs of providing local public services. Our initial aim is to develop an accurate measure of urban sprawl so that we might empirically test its impact on municipal budgets. Then, we undertake an empirical analysis using a cross-sectional data set of 2,500 Spanish municipalities for the year 2003 and a piecewise linear function to account for the potentially nonlinear relationship between sprawl and local costs. The estimations derived from the expenditure equations for both aggregate and six disaggregated spending categories indicate that low-density development patterns lead to greater provision costs of local public services.
    Keywords: Urban sprawl, local public spending.
    JEL: H1 H72 R51
    Date: 2008
  5. By: Andrea R. Lamorgese (Bank of Italy, Department for Structural Economic Analysis)
    Abstract: This paper formalizes one mechanism through which diversification in the production of research & development across firms located in a city dampens volatility in the local labor market, improves the incentives to perform research & development and smooths the aggregate business cycle fluctuations of a city. This is done by adapting the standard multi-sector quality ladder model (Grossman and Helpman 1991) in order to allow for heterogeneity across firms, thus taking into account knowledge spillovers across heterogenous sectors, knowledge accumulation, pecuniary externalities and segmented labor markets. As a result, according to the local degree of diversification in research & development, sectoral technological shocks have an influence on the current choice of research & development and the location of production, and in turn on local business cycles and the life cycle of the city: diversification in research & development allows innovations in different sectors of the city to arrive at different points in time, thus avoiding to put pressure on the local labor markets and keeping wage discipline. This permits firms located in the city to perform enough research & development and possibly beat outside competition in discovering and manufacturing new products, thus growing -at the aggregate city level-through less volatile cycles.
    Keywords: quality ladder with heterogeneity across firms, labor pooling economies, knowledge spillovers, diversification, schumpeterian growth in the city
    JEL: I31 I32 D63 D31 E32 O31 R23
    Date: 2008–04
  6. By: Andersson, Linda (Department of Business, Economics, Statistics and Informatics)
    Abstract: The objective of this paper is to empirically analyze the relationship between job flows and regional income stabilization provided by the national tax and transfer systems. The analysis is based on an administrative panel data set containing all sectors in 20 Swedish regions for the time period 1989-2000. Controlling for unobserved regional effects we find that a high net tax-income ratio tends to decrease the rate of jobs that are created and increase the rate of job destruction, increasing the overall rate of job reallocation in the regions. In an attempt to separate out the part of the national tax-transfer system that is aimed at stabilizing the income path over time we find that only job creation is affected, i.e., regions where the income path is more stable tend to have a lower rate of intra-industry job creation.
    Keywords: income
    JEL: H24 J63 J68
    Date: 2008–06–12
  7. By: Arthur Grimes (Motu Economic and Public Policy Research); Yun Liang (Motu Economic and Public Policy Research)
    Abstract: We estimate benefits that have resulted from extensions to Auckland's Northern Motorway since 1991. Population and employment rose substantially in locations near the new exits and to the north of the motorway extension, relative to developments elsewhere on the North Shore and in the broader Auckland Region. Land values also rose strongly near the new exits. Our approach to measuring net benefit uses changes in land values (after controlling for other factors) as a revealed preference indicator of value. We compare the estimated benefits with costs of the project to gain a measure of the project's benefit:cost ratio (B:C). Our results indicate that the gross benefit of the extensions from Tristram Avenue to Orewa is at least $2.3 billion (2004 NZ$s) compared with the estimated extension costs (discounted to 2004) of $366 million, giving a B:C ratio of at least 6.3, which exceeds the standard ratio of 4.0 used to approve roading projects in New Zealand. Our estimates take account of the possibility of diminution in value occurring elsewhere near the existing Northern Motorway network, but not in other areas of Auckland or elsewhere in the country. Conversely, they do not include any benefits that may be impounded in commercial property values in the CBD (and elsewhere) arising from increased accessibility to an enlarged labour pool.
    Keywords: infrastructure; transport investment; benefit:cost; Auckland motorway
    JEL: H43 H54 R42
    Date: 2008–05
  8. By: Rambonilaza, Tina
    Abstract: In this article we discuss the economic approach to evaluate landscape preferences for land-use planning. We then use the choice experiment method to examine public preferences for three landscape features – hedgerows, farm buildings and scrubland – in the Monts d’Arrée region (in Brittany, France), in the context of re-design of landscape conservation policy by the local environmental institute. Surveys were undertaken on two user groups, visitors and local residents. Our objective was to obtain empirical evidence of the difference between the preferences of tourists and residents, for landscape attributes. We then analysed the welfare changes of tourists and residents affected by different landscape programmes. Our results point out the strong divergence between the landscape preferences of the public and those of local public actors. The comparison of the estimated values of willingness to pay for single-attribute landscaping action shows some divergence between residents’ and tourists’ ranking of preferences for agricultural landscape areas.
    Keywords: landscape preferences; attributes; choice experiment; welfare estimates
    JEL: Q0 D61
    Date: 2005–05–23
  9. By: Margarida Hatem Pinto Coelho
    Abstract: Este documento está embasado em uma série de estudos e pesquisas que o Ipea desenvolve desde 2003, a respeito do mercado de trabalho no setor de turismo, com o objetivo de subsidiar a formulação de políticas públicas, o planejamento e a monitoração do desempenho desse setor, bem como seu impacto econômico e social, nos níveis nacional, regional e estadual. Aqui são apresentados, para o Brasil e por região, os principais resultados desses estudos, relativos à mão-de-obra ocupada nas chamadas Atividades Características do Turismo (ACTs): Alojamento, Agências de viagem, Transportes, Aluguel de transportes, Auxiliar de transportes, Alimentação e Cultura e lazer. Analisam-se, no conjunto e separadamente, as informações referentes às cinco macrorregiões do país - Sudeste, Sul, Centro-Oeste, Nordeste e Norte - com dados sobre o número de ocupações nos segmentos formal e informal, a participação relativa de cada atividade no total de empregos no turismo, a formalidade e a evolução dessas atividades, no período dezembro de 2002 a dezembro de 2006. Inicialmente, faz-se uma contextualização do tema, explicando resumidamente como esses estudos foram elaborados e, a seguir, apresentam-se os resultados. This document is based on a series of studies and researches that have been developed, since 2003, by IPEA, regarding the labor market in the tourist sector. These studies are aimed at the subsidiing of public policy elaboration planning and evaluation of this sector as well as its social and economic impact at the federal, state and municipal levels. The current paper presents for Brazil as a whole and, by regions, the main results of such studies in terms of the labor force occupied in the so-called typical activities of the sector: lodging, meals, travel agencies, transportation, transportation rentals, transportation assistance, culture and leisure. Information is analyzed and organized by totals and in terms of the five macro-regions of the country (Southeast, South, Center-West, Northeast and North), with data concerning the number of occupation in the formal and informal sectors, the relative participation of each activity in the total employment rate generated by tourism and the evolution and trend of such activities in the period going from December 2002 to December 2006. The theme is, first of all, put in context with a brief explanation of how these studies were done, followed by the results which were obtained.
    Date: 2008–01
  10. By: Ulrich Fritsche (Department for Economics and Politics, University of Hamburg, and DIW Berlin); Vladimir Kuzin (German Institute for Economic Research (DIW) Berlin)
    Abstract: We investigate convergence in European price level, unit labor cost, income, and productivity data over the period of 1960-2006 using the non-linear time-varying coefficients factor model proposed by Phillips and Sul (2007). This approach is extremely flexible on order to model a large number of transition paths to convergence. We find regional clusters in consumer price level data. GDP deflator data and unit labor cost data are far less clustered than CPI data. Income per capita data indicate the existence of three convergence clubs without strong regional linkages; Italy and Germany are not converging to any of those clubs. Total factor productivity data indicate the existence of a small club including fast-growing countries and a club consisting of all other countries.
    Keywords: Price level, Income, Productivity, Convergence, Factor Model, European Monetary Union
    JEL: E31 O47 C32 C33 E37
    Date: 2008–06
  11. By: Manuel Portugal Ferreira (Instituto Politécnico de Leiria); Fernando A. Ribeiro Serra (UNISUL Business School)
    Abstract: In this paper we discuss knowledge and innovation in clusters and the benefits of clustering from a knowledge-based perspective. Knowledge-based resources and innovations are important sources of competitive advantage for firms. Aware of the importance of continuously seeking new knowledge firms increasingly seek knowledge-rich locations such as specific industry clusters across the world. These are locations characterized by the concentration of firms operating in related and supporting activities, a specialized work force and a specialized institutional environment that nurtures the industry. However, it is not likely that these clusters are always locations from which the firms will be able to draw the intended knowledge benefits. The social structure of the relationships between individuals and firms determines the extent to which knowledge will be created, will flow between co-located firms and bounds the knowledge benefits the firms may capture. We finish with a discussion of the need of further examination of the network dynamics involved in an industry cluster to obtain a clearer identification of the actual positive externalities that may accrue to co-locating firms.
    Keywords: Strategy; Industry clusters; Innovation
    JEL: M0 M1
    Date: 2008–06–10
  12. By: Boehlé, J.L.; Rothkrantz, L.J.M.; Wezel, M.C. van (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Navigational systems assist drivers in finding a route between two locations that is time optimal in theory but seldom in practice due to delaying circumstances the system is unaware of, such as traffic jams. Upon arrival at the destination the service of the system ends and the driver is forced to locate a parking place without further assistance. We propose a City Based Parking Routing System (CBPRS) that monitors and reserves parking places for CBPRS participants within a city. The CBPRS guides vehicles using an ant based distributed hierarchical routing algorithm to their reserved parking place. Through means of experiments in a simulation environment we found that reductions of travel times for participants were significant in comparison to a situation where vehicles relied on static routing information generated by the well known Dijkstra’s algorithm. Furthermore, we found that the CBPRS was able to increase city wide traffic flows and decrease the number and duration of traffic jams throughout the city once the number of participants increased.
    Keywords: dynamic routing;information systems;computer simulation
    Date: 2008–05–23
  13. By: Maria Francesca Cracolici (VU University Amsterdam); Miranda Cuffaro (University of Palermo); Peter Nijkamp (VU University Amsterdam)
    Abstract: This paper presents a new analytical framework for assessing spatial disparities among countries. It takes for granted that the analysis of a country’s performance cannot be limited solely to either economic or social factors. The aim of the paper is to combine relevant economic and non-economic (mainly social) aspects of a country’s performance in an integrated logical framework. Based on this idea, a structural simultaneous equation model will be presented and estimated in order to explore the direction of the causal relationship between the economic and the non-economic aspects of a country’s performance. Furthermore, an exploration of the trajectory that each country has registered over time along a virtuous path will be offered. By means of a matrix persistency/transition analysis, the countries will be classified in clusters of good/bad performance. One of the most interesting conclusions concerns the inability of most countries to turn the higher educational skills of the population into greater economic performance over time. In addition, our analysis also shows that making an accurate picture record and formulating related policy aiming at environmental care is highly desirable. It is surprising that only a few countries have reached a favourable economic and environmental performance simultaneously.
    Keywords: Socio-economic well-being; living standards; structural simultaneous equation model
    JEL: P46
    Date: 2008–06–09
  14. By: Erik T. Verhoef (VU University Amsterdam); Andrew Koh (University of Leeds); Simon Shepherd (University of Leeds)
    Abstract: This paper considers the use of ‘long-run cost functions’ for congested networks in solving second-best network problems, in which capacity and tolls are instruments. We derive analytical results both for general cost and demand functions and for specific functional forms, namely Bureau of Public Roads cost functions and constant-elasticity demand functions. The latter are also used in a numerical simulation model. We consider second-best cases where only a subset of links in a network is subject to tolling and/or capacity choice, and cases with and without a self-financing constraint imposed. We will demonstrate that, under certain assumptions, second-best long-run cost (or actually: generalized price) functions can be derived for most of the cases of interest, which can be used in an applied network model as a substitute for the conventional short-run user cost functions. Doing so reduces the dimensionality of the problem and should therefore be helpful in speeding up procedures for finding second-best optima.
    Keywords: Traffic congestion; Road pricing; Road capacity choice; Second-best; Networks
    JEL: R41 R48 D62
    Date: 2008–06–05
  15. By: Erik T. Verhoef (VU University Amsterdam)
    Abstract: This paper studies the regulation of an airline duopoly on a congested airport. Regulation should then address two market failures: uninternalized congestion, and overpricing due to market power. We find that first-best charges are differentiated over airlines if asymmetric, and completely drive out the least efficient airline from the market. This is not generally the case for an undifferentiated charge, which is found to be a weighted average of first-best charge rules for the two airlines, and is less-than-optimally efficient because of its inability to differentiate between them. Tradeable slots may yield the first-best outcome if the congestion externality is relatively important and the market power distortion relatively unimportant, but may be less efficient than non-intervention when the reverse is true.
    Keywords: Airport congestion; congestion pricing; slot trading; tradeable permits; second-best
    JEL: R41 R48 D62
    Date: 2008–03–25

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