nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒05‒02
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The dynamics of spatial agglomeration in China: an empirical assessment By Ana Isabel Moreno-Monroy
  2. Measuring Changes in Competitiveness in Chinese Manufacturing Industries Across Regions in 1995-2004: an Unit Labor Cost Approach By Vivian W. Chen; Harry X. Wu; Bart van Ark
  3. Regional disparities and investment-cash flow sensitivity: Evidence from Chinese listed firms By Sun, Jianjun; Yamori, Nobuyoshi
  4. Technological Capabilities and Patterns of Cooperation of UK Firms: A Regional Investigation By Iammarino, Simona; Piva, Mariacristina; Vivarelli, Marco; Von Tunzelmann, Nick
  5. Spatial Heterogeneity in Environmental Regulation Enforcement and the Firm Location Decision among U.S. Counties By O. Ashton Morgan; Simon Condliffe
  6. Importance of Regional Financial Institutions in Regional Economic Development: Based on the results of corporate surveys in Japan's Tokai and Kansai regions By Yamori, Nobuyoshi
  7. Regional Competitiveness of Tourism Cluster: A Conceptual Model Proposal By Ferreira, João; Estevão, Cristina
  8. Analysis of the regional impacts of Climate Policy in Japan By Okajima, Shigeharu
  9. Extreme coefficients in Geographically Weighted Regression and their effects on mapping By Cho, Seong-Hoon; Lambert, Dayton M.; Kim, Seung Gyu; Jung, Su Hyun

  1. By: Ana Isabel Moreno-Monroy (University of Groningen)
    Abstract: In this paper, I complement the application of New Economic Geography "NEG" models for the explanation of wage disparities in China by estimating the Helpman Hason model, which focuses on the role of consumer markets as an attraction force and housing prices as a dispersion force for economic agglomeration. I estimate the structural parameters of the model for 2000 and 2005 and devote special attention to the multiple estimation problems of the Helpman-Hanson equation. I find that the market potential is slightly lower for 2005 than for 2000, as a direct product of a higher value of the elasticity of substitution for the last year. I also find that the share of income spent on manufactures increases between the two periods, and that transport costs decrease. I show how these effects may cause dispersion or agglomeration of economic activity according to the original Helpman (1998) model. An application of income shock experiments on different economic centers across China shows that spatial externalities are not homogeneous across prefectures, so that income shocks may have different effects across the country. Based on these results, I argue that the size of existent agglomerations will increase in the near future, but with marked differences across regions. As China moves to a market economy, prices should reflect more the forces pulling for dispersion, which not only include housing and land prices, but also congestion, pollution and many other problems that come along with urbanization.
    Date: 2008–12
  2. By: Vivian W. Chen (The Conference Board); Harry X. Wu (The Hong Kong Polytechnic University); Bart van Ark (The Conference Board and University of Groningen)
    Abstract: Using an industry-by-region data set, based on China’s Third Industrial Census for 1995 and First Economic Census for 2004, and covering 28 industries and 30 provinces, this paper examines the trend of labor compensation (ALC), labor productivity (ALP) and unit labor cost (ULC) by manufacturing industry across regions (provinces or groups of provinces). At the aggregate level, it shows that productivity growth was generally faster than that of labor compensation and hence resulted in a significant decline in unit labor cost for all regions in China. Furthermore, compared to more developed regions, less developed regions exhibited even stronger productivity growth relative to compensation, thus leading to a convergence across regions over this period. However, we observe a substantial variation in growth rates and convergence trends across regions for individual industries. Logit regression shows that labor intensive industries are more likely to converge in productivity, compensation and unit labor cost while skill intensive industries tend to increase inequality in unit labor cost. This is confirmed by estimating a growth regression, which shows that in provinces characterized by higher skill levels of the labor force, skill intensive industries experienced faster decline in ULC.
    Keywords: Labor productivity, average labor compensation, unit labor cost, and regional convergence
    JEL: J30
    Date: 2008–06
  3. By: Sun, Jianjun; Yamori, Nobuyoshi
    Abstract: In China, regional disparities are important. We examine the difference in the sensitivity of investment to cash flow between firms in inland regions and those in coastal regions. By using the financial data of Chinese listed firms, we found that firms in inland regions rely more on their internal funds in terms of their investment activities than those in coastal regions and that the sensitivity gap between inland and coastal firms widened in the recent contractionary monetary policy period. This suggests that firms in inland regions are harder to obtain outside funds due to unfavorable social and economic environments for inland firms. Our findings suggest that capital markets in China respond rationally to the potential impact of regional disparities on a firm’s performance.
    Keywords: sensitivity of investment to cash flow; sensitivity gap; regional disparities; Chinese economy
    JEL: G14 G31 O16
    Date: 2009–04–25
  4. By: Iammarino, Simona (University of Sussex); Piva, Mariacristina (Università Cattolica del Sacro Cuore); Vivarelli, Marco (Università Cattolica del Sacro Cuore); Von Tunzelmann, Nick (University of Sussex)
    Abstract: This paper focuses on the relationship between firms' technological capabilities and different forms of cooperation for innovation by combining the analysis of both micro and meso levels, i.e. the level of the firm and of the geographical region. Our findings, based on the Fourth UK Community Innovation Survey (CIS), provide new insights regarding the relationship between cooperative linkages for innovation and the development of technological capabilities by business units. Firstly, the distinction between competences and capabilities adopted in this paper seems appropriate for going beyond the rather simplistic dichotomy of 'innovative' versus 'non-innovative' firms commonly used in interpreting CIS data. Secondly, we find that the analysis for the UK as a whole masks stark regional differences in terms of intra- and extra-region collaborative linkages and degrees of firms' technological capabilities. These findings may be useful to help policy making to meet the priorities highlighted within the UK Government's framework for Science & Technology.
    Keywords: cooperation for innovation, technological capabilities, firms, regions
    JEL: O30 R12
    Date: 2009–04
  5. By: O. Ashton Morgan; Simon Condliffe
    Abstract: We estimate a negative binomial model with fixed effects to examine the impact of spatial differences in environmental regulation on manufacturing capital flows. Using a newly available data set, we find that stricter air quality standards deter births of polluting plants, suggesting heterogeneity in regulatory standards may create a temporal browning process. We also find that spatial differences in environmental regulation do not play a role in the location decision of non-pollution intensive plants. Key Words: Environmental regulation, firm location, air pollution
    JEL: R38 Q28 Q53
    Date: 2009
  6. By: Yamori, Nobuyoshi
    Abstract: This paper has analyzed the relationship between medium/small firms and financial institutions based on the results of questionnaires prepared for medium/small firms in the Tokai and Kansai regions. With the development of telecommunication technology and progress in securities market infrastructure, there are fewer cases in which geographical distance poses a problem in financial transactions. However, financing for medium/small firms is expected to remain dependent on indirect finance, i.e., financing through their major trading bank, inasmuch as it will be necessary for financial institutions to play a major role in overcoming the problem of information asymmetry in that sector. More specifically, this type of relationship banking in which periodical and direct contact lends to increased company knowledge is thriving as a means to eliminate the issue of information asymmetry. The direct contact or communication, an integral part of relationship banking entail costs, and can become difficult when banks locate far from firms.
    Keywords: Regional Finance; Japan; Bank; SME Finance
    JEL: O53 G32 G21
    Date: 2008–09
  7. By: Ferreira, João; Estevão, Cristina
    Abstract: Tourism is characterized for being a sector that has been highlighted as one of the activities with greatest potential for expansion on a global scale. For its growth potential and for being a product that can only be consumed in loco, tourism accepts the prominence role of being a strategy for local development. In this context the search for competitiveness is one of the key concerns of companies around the world. As clusters being a competent tool in companies’ performance, in regional development and in countries’ competitiveness, it is important to analyze its potential in tourism. This research aims to propose a conceptual model to analyze how a tourism cluster encourages its regional competitiveness.
    Keywords: Cluster; Tourism; Regional Development; and Competitiveness
    JEL: O25 R0 L20 L83 D00 M20 L00
    Date: 2009–04–25
  8. By: Okajima, Shigeharu
    Abstract: After great improvements in energy efficiency in the 1970âs, Japan has made little progress in reducing energy consumption since 1990, the base year for the Kyoto Protocol. This study is motivated by the recent growing demands among policy makers to find all possibilities for saving energy. To make informed decisions on how to save energy, policy makers need detailed information on energy consumption structures within each jurisdiction. First, in this article, I decompose national level energy intensity into efficiency and activity effects with the Fisher Ideal index, and then estimate regressions on prefecture level residential electricity demand between 1990 and 2003. It is found that national level energy intensity declined by seventy three percent from 1970 to 2003; sixty three percent of the decline may be attributed to improvement in energy efficiency.ã Energy intensity, however, has slightly increased since early 1990âs. Secondly, this paper explores the impact of reduction of carbon emission on the economy. I find that the Japanese government needs to enact the environmental taxes on a $12/ton in order to meet the Kyoto Protocol. It is also found that imposing a $12/ton environmental tax reduces Japanese GDP by around six percent and equivalent variations in urban regions fall while equivalent variations in rural regions rise.
    Keywords: Fisher index, Energy intensity, Regional Computable General Equilibrium, Environmental taxes, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2009
  9. By: Cho, Seong-Hoon; Lambert, Dayton M.; Kim, Seung Gyu; Jung, Su Hyun
    Abstract: This study deals with the issue of extreme coefficients in geographically weighted regression (GWR) and their effects on mapping coefficients using three datasets with different spatial resolutions. We found that although GWR yields extreme coefficients regardless of the resolution of the dataset or types of kernel function, 1) the GWR tends to generate extreme coefficients for less spatially dense datasets, 2) coefficient maps based on polygon data representing aggregated areal units are more sensitive to extreme coefficients, and 3) coefficient maps using bandwidths generated by a fixed calibration procedure are more vulnerable to the extreme coefficients than adaptive calibration.
    Keywords: extreme coefficient, fixed and adaptive calibrations, geographically weighted regression, Mapping, Research Methods/ Statistical Methods,
    Date: 2009

This nep-geo issue is ©2009 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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