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on Economic Geography |
| By: | Morgenroth, Edgar (ESRI) |
| Abstract: | Only a few research papers have analysed the spatial distribution of economic activity in Ireland. There are a number of reasons for this, not least the fact that comprehensive data on the location of economic activity by sector across all sectors has not been available at the highly disaggregated spatial level. This paper firstly establishes the geographic distribution of employment at the 2 digit NACE level, using a novel approach that utilises a special tabulation from the CSO 2006 Census of Population Place of Work Anonymised Records (POWCAR). It then analyses the spatial patterns of this distribution using maps and more formal methods such measures of spatial concentration and tests for spatial autocorrelation. The paper considers the locational preferences of individual sectors, the degree to which specific sectors agglomerate and co-agglomerate, and thus will uncover urbanisation effects and differences across urban and rural areas regarding economic activity. |
| Keywords: | economic geography/employment distribution/Ireland |
| JEL: | R12 R14 R30 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp271&r=geo |
| By: | Andrea Caragliu (Politecnico di Milano); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | We design a conceptual framework for linking two approaches: the literature on absorptive capacity and the literature on spatial knowledge spillovers. Regions produce new knowledge, but only part of it is efficiently adopted in the economy; the share of efficiently adopted technology depends on territorial capital. Our data set is based on a panel of European regions over the period 1999-2005, combining data from EUROSTAT and the European Values Study (EVS); we test the hypothesis that insufficient levels of territorial capital hamper the capability of regions to grasp and fully exploit new knowledge. Results show that a lower regional absorptive capacity increases knowledge spillovers towards surrounding areas, hampering the regions’ capability to understand, decode and efficiently exploit new knowledge, both locally produced and originating from outside. |
| Keywords: | Absorptive capacity; knowledge spillovers; total factor productivity; spatial econometrics |
| JEL: | O33 R11 |
| Date: | 2008–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20080119&r=geo |
| By: | Hans-Friedrich Eckey (University Kassel, Nora-Platiel-Str. 4, 34109 Kassel); Reinhold Kosfeld (University Kassel, Nora-Platiel-Str. 5, 34109 Kassel); Nina Muraro (University Kassel, Nora-Platiel-Str. 4, 34109 Kassel) |
| Abstract: | This paper examines the impact of demographic change on production today and in 2020. For the estimation a translog production function is used. The results show a mostly divergent development. It is shown that there is a strong centre-periphery disparity. Taking the population in 2020 into account the result is confirmed with an east-west disparity between peripheral regions in East Germany and urban regions in West Germany. Further there is also a north-south disparity detected because there is a higher increase of the factor labour in southern regions than in the other ones. Generally the cities have a greater benefit from immigration than the peripheral regions. They are confronted with a tendency of shrinkage. The conflict of growth and allocation arises from the point of view of economic policy. |
| Keywords: | regional production function, productivity, spatial distribution, demographic change |
| JEL: | D24 E23 J11 R11 R12 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:200901&r=geo |
| By: | Aloysius Gunadi, Brata |
| Abstract: | This paper discusses the spatial concentration of the small and cottage industry without legal entity in Indonesia. The study period is 1998-2004 or a period after economic crisis which commonly known as the ‘era reformasi’ (reformation era). By employing the Herfindahl index, this study found an increase in the spatial concentration of the informal small and cottage industry during this period. It argues that reformation tend to increase the spatial concentration of the informal small and cottage industry. Beside the economic crisis that have suffered urban and Java areas, other possible explanation on the connection between trend of the concentration and the reformation is what commonly known as the cost of formality. |
| Keywords: | spatial concentration; small and cottage industry; reformation; Indonesia |
| JEL: | O18 O17 R11 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12622&r=geo |
| By: | Carsten Ochsen (University of Rostock) |
| Abstract: | This paper analyzes how the aging labor force a¤ects the unem- ployment rate at the regional level in Germany. A theoretical model of equilibrium unemployment with spatial labor market interactions is used to study the e¤ects of age-related changes in job creation and job destruction. Using data for 343 districts, we then examine empirically the consequences of an aging labor force for the local labor markets in Germany. We apply di¤erent estimation techniques to a spatial and time dynamic panel data model. According to the estimates, aging causes an increase in job destruction. In addition, aging in the local labor market increases job creation, while the spatial aging e¤ect on job creation in the local district is negative. |
| Keywords: | Regional Unemployment, Vacancies and Separations, Job Creation, Regional Mobility, Spatial Interactions and Matching, Aging of the Labor Force |
| JEL: | J64 J63 J23 J61 R12 J10 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:102&r=geo |
| By: | NAKAMURA Ryohei |
| Abstract: | Urban agglomeration economies are usually divided into two categories: urbanization economies and localization economies. In the 1970s and 1980s, a number of attempts were made to estimate urbanization economies and/or localization economies directly in the production function. Since the work by Glaeser et al. in 1992, however, historical effects on agglomeration called dynamic externalities in agglomeration are tried to estimate indirectly by use of the growth equation of urban labor force extensively. These externalities are called MAR in a dynamic sense, whereas traditional agglomeration economies are evaluated in static sense. Alongside urbanization and localization, more traditional sources of industrial concentration are found in various industrial linkages, such as customer and supplier linkages or backward and forward linkages. These linkage effects come from the concentration of different kinds of industries whereas localization economies mean the benefit from the concentration of firms within the same industry. Also, linkage effects are often referred as pecuniary externalities. This paper tries to clarify theose agglomeration concepts, and to construct an estimable model of linkage effects among industries as well as agglomeration economies, and to estimate these effects separately within the framework of the Translog production function. In this model intermediate inputs play an important role as linkage effects. Also, in order to investigate the change of agglomeration economies the estimations are implemented using data for 1990 and 2000. The empirical analysis is based on two-digit data for manufacturing industries in Japanese cities. The estimated results regarding agglomeration economies vary significantly among the two-digit industries, but most of the agglomeration effects have fallen since 1990. |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:08040&r=geo |
| By: | Michael Fritsch (Friedrich Schiller University Jena, School of Economics and Business Administration); Florian Noseleit (Friedrich Schiller University Jena, School of Economics and Business Administration) |
| Abstract: | Recent empirical research has found that the effect of new business formation on employment emerges over a period of about ten years and has identified a 'wave' pattern of these effects. In this study, we decompose the overall contribution of new business formation on employment change into direct and indirect effects. The results indicate that indirect effects of new business formation are quantitatively much more important than the direct effects. Furthermore, we find that regional differences of the employment change generated by new business formation can to a large part be explained by respective differences of the indirect effects. Hence, the interaction of the start-ups with their regional environment plays a great role for explaining their impact on regional development. |
| Keywords: | Entrepreneurship, new business formation, regional development, direct and indirect effects |
| JEL: | L26 M13 O1 O18 R11 |
| Date: | 2009–01–05 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-001&r=geo |
| By: | Bruckmeier, Kerstin (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schwengler, Barbara (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]) |
| Abstract: | "Almost twenty years after German reunification there are still huge income disparities between western and eastern regions in Germany. The main purpose of the paper is to show how social transfer payments reduce these inter-regional disparities. In a first step we examine inequalities in the distribution of gross income from dependent employment and self-employment at the small-area level of 439 NUTS-3 units. Our distributional analysis quantifies regional wage inequalities driven by economic disparities and different patterns of employment. A decomposition analysis reveals that large wage differentials exist not only between eastern and western Germany but also within western regions. Furthermore we estimate the income effects of the German unemployment and pension insurance using different sources of social security data at regional level. The results indicate large regional redistributive effects across areas: the share of social benefits and payments as a percentage of total net income ranges from 11 per cent to 41 per cent. Like other European states, Germany faces several problems concerning its welfare system. Recent reforms of the welfare system in 2004 and 2005 also affected some core principles of social security. Our results show that changing parameters of eligibility, claims and financing will influence the spatial income distribution. Hence further research on this topic is recommended when data for 2005 and later years are available." (author's abstract, IAB-Doku) ((en)) |
| Keywords: | Sozialpolitik, Verteilungseffekte, Einkommenseffekte, regionale Disparität, Einkommenshöhe, Einkommensentwicklung, regionaler Vergleich, Sozialversicherung, Sozialausgaben, Sozialleistungen, Transferleistung, Lohnhöhe, Arbeitslosenversicherung, Rentenversicherung, abhängig Beschäftigte, Selbständige, Einkommensverteilung, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland |
| JEL: | D30 D63 H55 R12 |
| Date: | 2009–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:iab:iabdpa:200901&r=geo |
| By: | Thomas Gries (University of Paderborn); Magarete Redlin (University of Paderborn) |
| Abstract: | The paper explains the growth — inequality nexus for China’s provinces. The theoretical model of provincial development consists of two regions and studies the interactions of a mutually depending development process. Due to positive externalities, incoming trade and FDI induce imitation and hence productivity growth. The regional government can influence the economy by changing international transaction costs and providing public infrastructure. Due to mobile domestic capital, disparity effects are reinforced. The implications of the theoretical model are tested. As the central intention of the paper is to explain provincial disparity we directly relate income disparity (indicated by the contribution to the per capita income Theil index) to the disparity of selected income determining factors (indicated by the contribution to every other Theil index of the determinants). We examine the determinants of income and inequality for 28 Chinese provinces over the period 1991-2004 and apply a fixed effects panel estimation. Our analysis is based on revised GDP and investment data from Hsueh and Li (1999) and various sources of Chinese official statistics provided by the National Bureau of Statistics (NBS). The results confirm the theoretical framework and suggest a direct linkage between the factors that determine regional income and regional disparity. More specific, it is apparent that trade, foreign and domestic capital and government expenditure have an impact on the provincial inequality. Moreover, it is the success of the coastal regions and hence potentially geography with the low international transaction costs that drives the provincial inequality of China. |
| Keywords: | regional development, FDI, international integration, China |
| JEL: | J24 O14 O18 O33 O40 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:wpaper:18&r=geo |
| By: | Hailu, Yohannes; Kahsai, Mulugeta; Gebremedhin, Tesfa G.; Jackson, Randall W. |
| Abstract: | This study focuses on testing the relationship between income inequality and growth within U.S. counties, and the channels through which such effects are observed. The study tests three hypotheses: (1) income inequality has an inverse relationship with growth; (2) regional growth adjustments are the channels through which the inequality and growth are equilibrated; and (3) income inequality is endogenous to regional growth and its adjustment. Results, based on a system of equations estimation, confirm the hypotheses that income inequality has a growth dampening effect; income inequality is endogenous to regional growth and growth adjustment; and the channels through which income inequality determines growth are regional growth adjustments, such as migration and regional adjustment in job and income growth. Results have numerous policy implications: (1) to the extent that income inequality is endogenous, its equilibrium level can be internally determined within a regional growth process; (2) to the extent that traditional income inequality mitigating policies have indirect effect on overall regional growth, they may have unintended indirect effects on income inequality; and (3) to the extent that regional growth adjustment also equilibrates income inequality, such forces can be utilized as policy instruments to mitigate income inequality, and its growth dampening effects hence forth. |
| Keywords: | Income inequality, economic growth, Gini coefficient, growth modeling, population change, per capita income., Community/Rural/Urban Development, Public Economics, I32, J15, O18, P25, R11, R23, R25, R51, R53, R58, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saeana:46320&r=geo |
| By: | José Pedro Pontes |
| Abstract: | This paper studies the issue of agglomeration versus fragmentation of vertically related industries. While the downstream industry works under perfect competition, the upstream industry is a duopoly where each firm supplies a differentiated input to the competitive firms. These process the inputs under a quadratic production function entailing decreasing returns as in PENG, THISSE and WANG (2006). It is found that fragmentation occurs if the transport cost of final goods is medium to high, while the transport cost of inputs is low. Otherwise, agglomeration prevails. Multiple agglomerated equilibria are possible if the transport cost of intermediate goods is either medium or high. |
| Keywords: | Oligopoly; Vertically-Linked Firms; Location; Spatial Fragmentation. |
| JEL: | L13 R10 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp302008&r=geo |
| By: | Jeremy Atack; Fred Bateman; Michael Haines; Robert A. Margo |
| Abstract: | For generations of scholars and observers, the "transportation revolution," especially the railroad, has loomed large as a dominant factor in the settlement and development of the United States in the nineteenth century. There has, however, been considerable debate as to whether transportation improvements led economic development or simply followed. Using a newly developed GIS transportation database we examine this issue in the context of the American Midwest, focusing on two indicators of broader economic change, population density and the fraction of population living in urban areas. Our difference in differences estimates (supported by IV robustness checks) strongly suggest that the coming of the railroad had little or no impact upon population densities just as Albert Fishlow concluded some 40 years ago. BUT, our results also imply that the railroad was the "cause" of midwestern urbanization, accounting for more than half of the increase in the fraction of population living in urban areas during the 1850s. |
| JEL: | N12 N71 O14 O18 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14640&r=geo |
| By: | Badi H. Baltagi (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Seuck Heun Song; Jae Hyeok Kwon |
| Abstract: | A panel data regression model with heteroskedastic as well as spatially correlated disturbance is considered, and a joint LM test for homoskedasticity and no spatial correlation is derived. In addition, a conditional LM test for no spatial correlation given heteroskedasticity, as well as a conditional LM test for homoskedasticity given spatial correlation, are also deerived. These LM tests are compared with marginal LM tests that ignore heteroskedasticity in testing for spatial correlation, or spatial correlation in testing for homoskedasticity. Monte Carlo results show that these LM tests as well as their LR counterparts perform well even for small N and T. However, misleading inference can occur when using marginal rather than joint or conditional LM tests when spatial correlation or heteroskedasticity is present. |
| Keywords: | Panel data, heteroskedasticity, spatial correlation, Lagrange multiplier tests, random effects |
| JEL: | C12 C23 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:108&r=geo |
| By: | Elias Oikarinen (Department of Economics, Turku School of Economics) |
| Abstract: | The often used housing price-to-income and housing price-to-rent ratios are problematic in housing market analysis and may result in misleading conclusions. Instead, the no-arbitrage condition of housing market is a theoretically sound basis to evaluate if housing prices are misaligned. Unfortunately, empirical applica-tion of the no-arbitrage condition has notable complications. This article reviews these complications and suggests some solutions to them. The use of implied expected appreciation derived from the no-arbitrage condition is recommended. It is also claimed that the real appreciation is better to use than the nominal one in the no-arbitrage computations. Furthermore, the paper shows that the maintenance costs as a fraction of housing price vary substantially in time and location, which may significantly affect the equilibrium housing price level relative to rental prices. An empirical application of the no-arbitrage relation using data from ten Finnish cities shows that housing price level in 2007 was not based on high expected appreciation. This lowers the fears for a price bubble. |
| Keywords: | Housing, no-arbitrage condition, overpricing, user cost |
| JEL: | R21 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp39&r=geo |
| By: | Maria Flavia Ambrosanio (DISCE, Università Cattolica); Massimo Bordignon (DISCE, Università Cattolica); Floriana Cerniglia (Università Milano Bicocca) |
| Abstract: | In the last 15 years, Italy has been involved in a complex, confuse and unfinished process of fiscal decentralization. In this context, data on fiscal flows are continuously produced and thrown in the political arena by several actors, political parties, interest groups and media alike, with little scientific underpinnings and often with limited adherence to reality. This paper discusses at length the issue of fiscal federalism in Italy and presents a careful attempt to measure regional redistribution, or fiscal flows across regions. It describes the decentralization process in Italy from the beginning of the ‘90’s to date and presents a few data on the main features of the Italian decentralization process, that only happened on the financing side, with little effects on the allocation of expenditure responsibility between levels of governments. The focus is however on the measurement of regional fiscal flows and on the problems concerning the regionalization of public expenditure and revenues. Our basic conclusions can be summarised as follows. Fiscal flows in Italy are huge and are mostly driven by the large difference in economic development between the different areas of the country. The public sector generally works in the direction of equalizing per capita (current) public expenditure across regions, at least for fundamental services. However, the distance in economic development, and therefore in tax revenues among regions, is so large that even this partial equalization is enough to generate consistent fiscal flows across the national territory. Clearly, fiscal federalism has some chances of success in Italy only if it works in the direction of reducing the distance between territorial areas and the Italian debate on fiscal federalism, rich in ideology and poor in facts, would certainly benefit by an improved quality of regional data and by official estimations, based on clear and transparent methodology, of regional fiscal flows. |
| Keywords: | fiscal federalism, net fiscal flows, regional redistribution |
| JEL: | H7 H73 H77 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie3:ief0084&r=geo |
| By: | Katie Fitzpatrick (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020); Jeffrey P. Thompson (Center for Policy Research, Maxwell School, Syracuse University, Syracuse, NY 13244-1020) |
| Abstract: | The Federal Earned Income Tax Credoit (EITC) contributed to increasing employment rates for single women during the 1990s. This paper expands on what is known about the labor supply response to the EITC by exploiting differences in the cost-of-living faced by potentially eligible recipients in different geographic areas. Using the 1993 EITC expansion, we demonstrate that the labor supply response varies considerably with metropolitan area cost-of-living. We identify an increase in labor force participation among single mothers of as much as 10 percentage points in the lowest cost metropolitan areas. There is no discernable participation response in metropolitan areas with the highest housing costs, where approximately 40 of the population lives. We find little response along the intensive margin, regardless of the costs in the metropolitan area. We conclude that the welfare-enhancing effects of the EITC are undermined by the interaction of the program's fixed national rules and geographic variation in wages and cost of living. In addition, our findings suggest that the federal EITC does little to reduce joblessness in many of the nation's largest cities. |
| Keywords: | EITC, cost-of-living, tax reform, labor supply |
| JEL: | H24 H31 I31 J22 R23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:max:cprwps:110&r=geo |
| By: | Berliant, Marcus; Yu, Chia-Ming |
| Abstract: | Canonical analysis of the classical general equilibrium model demonstrates the existence of an open and dense subset of standard economies that possess fully-revealing rational expectations equilibria. This paper shows that the analogous result is not true in urban economies. An open subset of economies where none of the rational expectations equilibria fully reveal private information is found. There are two important pieces. First, there can be information about a location known by a consumer who does not live in that location in equilibrium, and thus the equilibrium rent does not reflect this information. Second, if a consumer’s utility depends only on information about their (endogenous) location of residence, perturbations of utility naturally do not incorporate information about other locations conditional on their location of residence. Existence of a rational expectations equilibrium is proved. Space can prevent housing prices from transmitting information from informed to uninformed households, resulting in an inefficient outcome. |
| Keywords: | Urban Economics; General Equilibrium; Private Information; Rational Expectations |
| JEL: | R13 D82 D51 |
| Date: | 2009–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12709&r=geo |
| By: | Paolo Sestito (Bank of Italy); Eliana Viviano (Bank of Italy) |
| Abstract: | We use the Italian Labour Force Survey and the European Household Panel Survey to analyse the distribution of the reservation wages reported by jobseekers. In Italy, reservation wages appear to be higher in the South - the low income and high unemployment area of the country - than in the North and Centre. A similar, rather counterintuitive, pattern, however, can also be found in Finland, France and Spain. First, we show that the way in which these data are commonly collected generates double selection bias. Second, we show that this bias has a strong effect on the estimation of the geographical pattern of reservation wages in many countries. The size of this bias is substantial in Italy. When controlling for it, reservation wages are 10 per cent higher in the North and Centre than in the South. |
| Keywords: | reservation wages, sample selection, regional differentials |
| JEL: | J64 J22 R23 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_696_08&r=geo |
| By: | Commins, Nicola (ESRI); Nolan, Anne (ESRI) |
| Abstract: | Rapid economic and demographic change in the Greater Dublin Area over the last decade, with associated increases in car dependence and congestion, has focused policy on encouraging more sustainable forms of travel. In this context, knowledge of current travel patterns and their determinants is crucial. Here we concentrate on travel for a specific journey purpose, namely the journey to work. We employ cross-section micro-data from the 2006 Census of Population to analyse the influence of travel and supply-side characteristics, as well as demographic and socio-economic characteristics on the choice of mode of transport to work in the Greater Dublin Area. |
| Keywords: | policy |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp268&r=geo |
| By: | van der Eng, Pierre |
| Abstract: | This paper investigates whether the ‘Kuznets hypothesis’, that economic growth from low levels of GDP per capita is initially associated with an increase in income inequality and later followed by a decline in inequality, is supported by evidence for a less-developed country, Indonesia. The paper outlines the relevant features of the process of rapid growth and structural change, in particular industrialisation since the 1960s. It notes the possible consequences of this process for changes in income distribution, and draws on disparate sets of statistical data to trace trends in income inequality in Indonesia. The paper concludes that the evidence for Indonesia suggests an increase in inequality during the 1970s and a subsequent decrease of inequality until 1997. A comparison of the evidence with historical data for the UK and Japan suggests that income inequality in Indonesia was relatively low. |
| Keywords: | income inequality; Kuznets hypothesis; Indonesia; economic development |
| JEL: | D31 N35 O15 R12 |
| Date: | 2009–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:12725&r=geo |
| By: | Elias Oikarinen (Department of Economics, Turku School of Economics) |
| Abstract: | Housing prices and household borrowing are expected to be tightly connected to each other. Better availability of credit eases liquidity constraints of households, which is likely to lead to higher demand for housing. On the other hand, housing prices may significantly influence household borrowing through various wealth effects. Employing time series econometrics this study shows that since the financial liberalization in the late 1980s there has been a significant two-way interaction between housing prices and housing loan stock in Finland. Before the financial deregulation the interaction was substantially weaker. Furthermore, housing appreciation has a notable positive impact on the amount of consumption loans withdrawn by households. It appears that there is no similar relationship between stock price movements and household borrowing. Understanding the two-way interaction between housing prices and credit is of importance, since the interdependence is likely to augment boom-bust cycles in the economy and increase the fragility of the financial sector. |
| Keywords: | lending, borrowing, housing, dynamics |
| JEL: | E41 E51 R21 |
| Date: | 2008–02 |
| URL: | http://d.repec.org/n?u=RePEc:tkk:dpaper:dp29&r=geo |