nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒02‒22
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Spatial HAC estimator: analysis of convergence of European regions By Oleksandr Shepotylo
  2. Quality of Life in the Regions: An Exploratory Spatial Data Analysis for West German Labor Markets By Rusche, Karsten
  3. Common and Spatial Drivers in Regional Business Cycles By Michael Artis; Christian Dreger; Konstantin A. Kholodilin
  4. Clusters of firms in space and time By Giuseppe Arbia; Giuseppe Espa; Diego Giuliani; Andrea Mazzitelli
  5. Regional differences in bank office service accessibility: an entry approach By Aki Koponen
  6. Career Networks and Job Matching - Evidence on the Microeconomic Foundations of Human Capital Externalities By Daniel F. Heuermann
  7. Housing Liquidity, Mobility, and the Labour Market By Allen Head; Huw Lloyd-Ellis
  8. Local export spillovers in France By Pamina Koenig; Florian Mayneris; Sandra Poncet
  9. Are there Gender-specific Preferences for Location Factors? A Grouped Conditional Logit-Model of Interregional Migration Flows in Germany By Lutz Schneider; Alexander Kubis
  10. The economic impact of the spanish public university system. An analysis for the period 1998 - 2004 By Néstor Duch; Javier García; Martí Parellada
  11. The Impact of Regional Unemployment on Life Expectancy in Germany. By Gerd Grözinger
  12. The effects of immigration on the productive structure of Spanish regions By Francisco Requena; Guadalupe Serrano; Joan Martín Montaner
  13. Social Interactions and Spillovers: Incentives,Segregation and Topology By Antonio Cabrales; Antoni Calvó-Armengol; Yves Zenou
  14. The Effect of Power Plants on Local Housing Values and Rents: Evidence from Restricted Census Microdata By Lucas W. Davis
  15. Long-term care: regional disparities in Belgium By Karakaya, Güngör

  1. By: Oleksandr Shepotylo (Kyiv School of Economics and Kyiv Economics Institute)
    Abstract: This paper applies a nonparametric heteroskedasticity and autocorrelation consistent (HAC) estimator of error terms in the context of the spatial autoregressive model of GDP per capita convergence of European regions at NUTS 2 level. By introducing the spatial dimension, it looks at how the equilibrium distribution of GDP per capita of EU regions evolves both in time and space dimensions. Results demonstrate that the global spatial spillovers of growth rates make an important contribution to the process of convergence by reinforcing the economic growth of neighboring regions. Results are even more pronounced when the convergence in wage per worker is considered. The choice of kernel functions does not significantly affect the estimation of the variance-covariance matrix, while the choice of the bandwidth parameter is quite important. Finally, results are sensitive to the weighting matrix specification, and further research is needed to give a more rigorous justification for the selection of the weighting matrix.
    Keywords: Convergence, spatial econometrics, regional economics, EU
    Date: 2009–02
  2. By: Rusche, Karsten
    Abstract: Which of Germanys regions is the most attractive? Where is it best to live and work - on objective grounds? These questions are summed up in the concept “quality of life”. This paper uses recent research projects that determine this parameter to examine the spatial distribution of quality of life in Germany. For this purpose, an Exploratory Spatial Data Analysis is conducted which focuses on identifying statistically significant (dis-)similarities in space. An initial result of this research is that it is important to choose the aggregation level of administrative units carefully when considering a spatial analysis. The level plays a crucial role in the strength and impact of spatial effects. In concentrating on various labor market areas, this paper identifies a significant spatial autocorrelation in the quality of life, which seems to be characterized by a North-Mid-South divide. In addition, the ESDA results are used to augment the regression specifications, which helps to avoid the occurrence of spatial dependencies in the residuals.
    Keywords: Quality of Life; Exploratory Spatial Data Analysis; Functional Economic Areas; Spatial Econometrics; LISA Dummies
    JEL: R10 R50 D63 R12
    Date: 2008–10–01
  3. By: Michael Artis; Christian Dreger; Konstantin A. Kholodilin
    Abstract: We examine real business cycle convergence for 41 euro area regions and 48 US states. Results obtained by a panel model with spatial correlation indicate that the relevance of common business cycle factors is rather stable over the past two decades in the euro area and the US. Ongoing business cycle convergence often detected in a country data is not confirmed at the regional level. The degree of synchronization across the euro area is similar to that to be found for the US states. Thus, the lack of convergence does not seem to be an impediment to a common monetary policy.
    Keywords: Business cycle convergence, spatial correlation, spatial panel model
    JEL: E32 C51 E37
    Date: 2009
  4. By: Giuseppe Arbia; Giuseppe Espa; Diego Giuliani; Andrea Mazzitelli
    Abstract: The use of the K-functions (Ripley, 1977) has become recently popular in the analysis of the spatial pattern of firms. It was first introduced in the economic literature by Arbia and Espa (1996) and then popularized by Marcon and Puech (2003), Quah and Simpson (2003), Duranton and Overman (2005) and Arbia et al. (2008). In particular in Arbia et al. (2008) we used Ripley’s K-functions as instruments to study the inter-sectoral co-agglomeration pattern of firms in a single moment of time. All this researches have followed a static approach, disregarding the time dimension. Temporal dynamics, on the other hand, play a crucial role in understanding the economic and social phenomena, particularly when referring to the analysis of the individual choices leading to the observed clusters of economic activities. With respect to the contributions previously appeared in the literature, this paper uncovers the process of firm demography by studying the dynamics of localization through space-time K-functions. The empirical part of the paper will focus on the study of the long run localization of firms in the area of Rome (Italy), by concentrating on the ICT sector data collected by the Italian Industrial Union in the period 1920- 2005.
    Keywords: Agglomeration, Non-parametric measures; Space-time K-functions, Spatial clusters, Spatial econometrics.
    JEL: C21 D92 L60 O18 R12
    Date: 2009
  5. By: Aki Koponen (Institute for Competition Policy Studies, Turku School of Economics)
    Abstract: Structural changes in retail banking markets and development of remote access technologies have reduced the number of bank branches in many developed countries. That makes close-downs of bank branches and service accessibility in rural/peripheral regions interesting topics of public discussion. This paper uses an empirical entry approach in order to analyze whether the peripheral regions have suffered from the development branch networks in general, or are some specific regions faced more closedowns that one can expect? The analysis shows that there are some differences between the regions in accessibility of the services measured both by the number of bank groups and number of branches located in the municipality. Commutation directed to the municipality increased the accessibility as well as the increase in average taxable income. These characteristics are typically related to the local centers but also the administrative city-status had additional positive effect. When it comes to the development of accessibility, the analysis shows no differences between the regions.
    Keywords: banking, accessibility, regional differences, technological development, concentration
    JEL: G21 R12
    Date: 2009–01
  6. By: Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: Inspired by the literature on the importance of career networks for the quality of labor market matches we investigate whether human capital externalities arise from higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany, we find that increasing the regional share of highly qualified workers by one standard deviation raises wages on the incidence of job change by up to three percent, pointing to the importance of improved job matching opportunities in human capital rich regions as a microeconomic source of human capital externalities. Evidence on regional differences in job change behavior suggests that human capital networks enable young workers to change jobs more easily and to thereby increase matching efficiency, which in turn reduces the overall number of job changes needed until an efficient match is reached. Benefits from improved matching opportunities predominantly arise from human capital networks enabling workers in skilled regions to change jobs within an industry and, thus, to capitalize on their industry-specific human capital.
    Keywords: Human Capital Externalities, Job Matching, Agglomeration Economies
    JEL: D62 J24 J31 R11
    Date: 2009–02
  7. By: Allen Head (Queen's University); Huw Lloyd-Ellis (Queen's University)
    Abstract: The relationships among geographical mobility, unemployment and the value of owner-occupied housing are studied in an economy with heterogeneous locations and search frictions in the markets for both labour and houses. Di¤erences in labour market conditions between cities affect the speed with which houses may be sold--that is, the liquidity of housing. At the same time housing market conditions affect employment decisions and thus the allocation of labour across cities. In equilibrium, unemployment rates for home-owners are higher than for otherwise identical renters. Unemployment and home-ownership rates are, however, negatively correlated across cities. In a parameterized example we find that, although renters are much more mobile than owners, the impact of home-ownership on aggregate unemployment is quantitatively small.
    Keywords: liquidity, mobility, home-ownership, unemployment
    JEL: J61 J64 R23
    Date: 2008–12
  8. By: Pamina Koenig; Florian Mayneris; Sandra Poncet
    Abstract: This paper investigates the presence of local export spillovers on both the extensive (the decision to start exporting) and the intensive (the export volume) margins of trade, using data on French individual export flows, at the product-level and by destination country, between 1998 and 2003. We investigate whether the individual decision to start exporting and exported volume are influenced by the presence of nearby product and/or destination specific exporters, using a gravity-type equation estimated at the firm-level. Spillovers are considered at a fine geographical level corresponding to employment areas (348 in France). We control for the new economic geography-type selection of firms into agglomerated areas, and for the local price effects of firms agglomeration. Results show evidence of the presence of export spillovers on the export decision but not on the exported volume. We interpret this as a first evidence of export spillovers acting through the fixed rather than the variable cost. Spillovers on the decision to start exporting are stronger when specific, by product and destination, and are not significant when considered on all products or on all products-all destinations. Moreover, export spillovers exhibit a spatial decay within France: the effect of other exporting firms on the export decision is stronger within employment areas and declines with distance.
    Date: 2009
  9. By: Lutz Schneider; Alexander Kubis
    Abstract: The article analyses the question whether women and men differ in their tastes for location factors. The question is answered by quantifying the impact of location characteristics on interregional migration flows across Germany. The analysis is based on a grouped conditional logit approach. We augment the framework by controlling for violation of the independence of irrelevant alternatives assumption and for overdispersion. As a result, we find no differences in terms of direction of impact. However, the regressions confirm gender differences in terms of intensity, particularly regarding regional wage levels and the availability of educational institutions.
    Keywords: Labour Mobility; Gender Economics; Regional Migration; Discrete Choice Model
    JEL: C25 J61 J16 R23
    Date: 2009–02
  10. By: Néstor Duch (Universitat de Barcelona & IEB); Javier García (Universitat de Barcelona & IEB); Martí Parellada (Universitat de Barcelona & IEB)
    Abstract: In recent decades the contribution made by higher education institutions to regional development has attracted increasing attention. Considering the university as an economic agent with its own budget and expenditure, then the activities it engages in, as well as those of the groups from which it is comprised (students, professors and staff), will have an impact that is transmitted to the rest of the economy through its inter-sectoral relations. On this premise, the multiplier effects within the economy are analyzed, specifically at the level of income and employment. This study analyses the economic impact of the Spanish public university system, it examines the stability of the impact and seeks to account for the changes that occurred between 1998 and 2004. The method adopted is based on the use of input-output tables. The Gross Added Value (GAV) and employment generated by the Spanish public university system as shares of Spain’s total GAV and employment presented an average annual growth rate of 4.7% and 3.8% respectively.
    Keywords: Regional development, universities, higher education, economic impact.
    JEL: R15 I23 O18
    Date: 2008
  11. By: Gerd Grözinger
    Date: 2009–02
  12. By: Francisco Requena (Universitat de València); Guadalupe Serrano (Universitat de València); Joan Martín Montaner (Universitat Jaume I)
    Abstract: Immigrants have increased their participation in Spanish labour supply from less than 3 percent in 1996 to more than 13 percent in 2005. Using the factor proportion model of production, this paper analyses whether this labour supply shock has affected the industrial structure of Spanish regions. Our best specification suggests the need to include time varying region-specific effects to capture differences in technology and prices across regions. Our results confirm that, first, labour endowment differences across regions help to explain the pattern of industry specialisation across region. Second, immigrants and natives act as complementary factors in most industries. Third, the importance of factor endowment changes is relatively small compared to production technique changes and idiosyncratic industry changes in explaining the overall changes in industrial structure over 1996-2005, being only important in the case of Building, a sector where foreign workers represent an important share of its total labour force.
    Date: 2009–01
  13. By: Antonio Cabrales; Antoni Calvó-Armengol; Yves Zenou
    Abstract: The aim of this paper is to understand the interactions between productive effort and the creation of synergies that are the sources of technological collaboration agreements, agglomeration, and social interactions. We model this interaction in a way that allows us to characterize how agents devote resources to both activities. This permits a full-edged equilibrium/welfare analysis of network formation with endogenous productive efforts, to derive unambiguous comparative statics results and to analyze community sorting by individual traits. In spite of its parsimony the model retains enough richness to replicate a broad range of empirical regularities displayed by social and economic networks, and to relate them to individual and social welfare. Key words: random network, spillovers, network formation, network topology.
    Date: 2009–02
  14. By: Lucas W. Davis
    Abstract: Current trends in electricity consumption imply that hundreds of new fossil-fuel power plants will be built in the United States over the next several decades. Power plant siting has become increasingly contentious, in part because power plants are a source of numerous negative local externalities including elevated levels of air pollution, haze, noise and traffic. Policymakers attempt to take these local disamenities into account when siting facilities, but little reliable evidence is available about their quantitative importance. This paper examines neighborhoods in the United States where power plants were opened during the 1990s using household-level data from a restricted version of the U.S. decennial census. Compared to neighborhoods farther away,housing values and rents decreased by 3-5% between 1990 and 2000 in neighborhoods near sites. Estimates of household marginal willingness-to-pay to avoid power plants are reported separately for natural gas and other types of plants, large plants and small plants, base load plants and peaker plants, and upwind and downwind households.
    Date: 2008–06
  15. By: Karakaya, Güngör
    Abstract: In this paper we analyze the problem of population ageing in terms of non-medical care needs of persons who are dependent or have lost their autonomy, in order to provide the various public and private administrations active in these fields with some food for thought. The anticipated increase in dependency poses significant challenges in terms of needs evolution and financing. Using administrative data on the Belgian population to build indicators on the prevalence of dependency at home in the three regions in 2001, we find that the likelihood of a sustained increase in the Flemish prevalence rates ultimately amplifies the magnitude of the financing problems that the Flemish dependency insurance scheme has experienced since its first years of operation. Results also show that the smaller increases or the decreases (according to the scenario selected) expected in Wallonia and Brussels are likely to mitigate concern about the sustainability of any long-term care insurance in Wallonia and therefore to facilitate its eventual introduction.
    Keywords: Long-term care; Old age assistance; Demographic changes; Regional inequalities; Projection
    JEL: J14 I12 I18 J11
    Date: 2009

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