nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒11‒07
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Entrepreneurship and the spatial context: evidence on the location of firm births in Greece By Irene Daskalopoulou; Panagiotis Liargovas
  2. Income Differentials on Regional Labour Markets in Southwest Germany By Alice Guyot; Stefan Berwing; Maria Lauxen-Ulbrich
  3. Clusters of Entrepreneurship By Edward Glaeser; William Kerr; Giacomo Ponzetto
  4. Social capital and economic growth in Polish regions By Dzialek, Jaroslaw
  5. Regional determinants of manufacturing start-ups in Greece: evidence on the effect of agglomeration economies By Irene Daskalopoulou; Panagiotis Liargovas
  6. Employment Protection Legislation in Russia: Regional Enforcement and Labour Market Outcomes By Gimpelson, Vladimir; Kapeliushnikov, Rostislav; Lukiyanova, Anna
  7. Hierarchical contracting in grant decisions: ex-ante and ex-post evaluation in the context of the EURegional Policy By Michela Cella; Massimo Florio
  8. Mind the neighbors : the impact of productivity and location on firm turnover By Hallward-Driemeier, Mary; Thompson, Fraser
  9. Innovation Processes and Factors on Peripheral Regions of Portugal and Spain By Natário, Maria Manuela
  10. The Institutional Context of an "Empirical Law": The Wage Curve under Different Regimes of Collective Bargaining By Blien, Uwe; Dauth, Wolfgang; Schank, Thorsten; Schnabel, Claus
  11. Using Cluster Analysis for Studying the Proximity of Registered Unemployment at the Level of Counties in Romania at the Beginning of the Economic Crisis By Babucea Ana-Gabriela; Danacica Emanuela-Daniela
  12. The Structural Funds and the Economic and Social Cohesion Process By Pociovalisteanu Diana-Mihaela; Thalassinos Eleftherios
  13. Thieves, Thugs, and Neighborhood Poverty By Bjerk, David
  14. Female Labor Force Participation in Urbanization Process: The Case of Turkey By Mustafa Kemal, Bicerli; Naci, Gundogan
  15. Urbanization and Labor Market Informality in Developing Countries By Gundogan , Naci; Bicerli, Mustafa Kemal

  1. By: Irene Daskalopoulou; Panagiotis Liargovas
    Abstract: This paper analyses the effect of the spatial context upon entrepreneurship in Greek regions. Cross-sectional data referring to 4,151 births at NUTS III level (prefecture) are used for firm births in four industries. Results indicate that the spatial context of entrepreneurship affects different industries in different ways. Localization economies are the primary factor affecting the location of manufacturing and tourism births. Births in services and commerce seem to be the outcome of urbanization economies rather than the result of intra-industry concentration. Manufacturing and services are positively affected by state financial incentives promoting births at certain locations. Nonetheless, in the case of manufacturing, the effectiveness of such incentives is questioned by the presence of negative localization effects.
    Date: 2009
  2. By: Alice Guyot (Center for small- and medium-sized business research, University of Mannheim, Germany); Stefan Berwing (Center for small- and medium-sized business research, University of Mannheim, Germany); Maria Lauxen-Ulbrich (Center for small- and medium-sized business research, University of Mannheim, Germany)
    Abstract: The aim of our paper is to identify explanatory variables for income disparities between women and men across different regional types. Using data from the BA Employment Panel (BEP) descriptive statistics show that the gender pay gap grows wider from core regions to periphery. The main explanatory variables for the income differentials are vocational education in the men’s case and size of enterprise in the women’s case. Whereas in the case of women the importance of vocational status increases and the importance of size of enterprise decreases from rural areas to urban areas.
    Keywords: Regional economics, Regional data, Wage differentials, Wage gap
    JEL: J16 J24 J31 R21 R23
    Date: 2009–01
  3. By: Edward Glaeser; William Kerr; Giacomo Ponzetto
    Abstract: Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.
    Keywords: Entrepreneurship, Industrial Organization, Chinitz, Agglomeration, Clusters, Cities
    JEL: J2 L0 L1 L2 L6 O3 R2
    Date: 2009–10
  4. By: Dzialek, Jaroslaw
    Abstract: There is an ongoing debate on social capital resources in Poland, where the density of associational activities and the level of social trust is low when compared to West European countries. Moreover, some researchers claim that Polish economy is developing despite low resources of social capital. This paper examines spatial patterns of various forms of social capital (networks and trust; bonding and bridging social capital; family, friendship, neighbourhood and associational ties) in Poland and determinants of their distribution. It analyses relations between resources of social capital and regional growth.
    Keywords: social capital; regional growth; Poland
    JEL: O18 O43 Z13
    Date: 2009
  5. By: Irene Daskalopoulou; Panagiotis Liargovas
    Abstract: The paper analyses the regional determinants of manufacturing start-up ratios in Greece. Emphasis is placed upon analysing the effect of agglomeration economies, which are distinguished between urbanisation, and localisation economies. The data refer to establishments realised in the 51 Greek prefectures (NUTS III level) during 2005. Results indicate that negative urbanisation economies prevail. Localisation economies in the form of positive Marshallian and negative Jacobian externalities are observed and constitute important determinants of start-up ratios. Results regarding the effect of other factors such as expected demand and profit, cost and human resources factors are as anticipated.
    Date: 2009
  6. By: Gimpelson, Vladimir (CLMS, Moscow Higher School of Economics); Kapeliushnikov, Rostislav (CLMS, Moscow Higher School of Economics); Lukiyanova, Anna (CLMS, Moscow Higher School of Economics)
    Abstract: Since formal laws can be observed or ignored to varying degrees, the actual enforcement regime shapes incentives and constraints. Most of the studies exploring EPL effects on labour market performance implicitly assume that EPL compliance is near to complete and therefore all firms bear full adjustment costs incurred by the regulations. This seems to be a very strong assumption for any country but it sounds especially strong and hardly plausible for developing and transition economies. But if compliance and enforcement varies widely across regions/cities or segments of firms, then this variation is likely to cause variation in performance. This paper looks at Russia in particular. The main idea of this paper is to analize cross-regional and inter-temporal variation in EPL enforcement and to explore empirically whether it is translated into regional labour market outcomes. The paper employs unique data set based on the State Labour Inspectorate data and the Supreme Court statistics on labour disputes.
    Keywords: employment protection regulations, enforcement, employment, unemployment, regional labor markets, Russia
    JEL: J21 J23 J52 K31 R23
    Date: 2009–10
  7. By: Michela Cella; Massimo Florio
    Abstract: This paper applies incentive theory to the context of the European Union (EU) Regional Policy. The core instruments of the policy are the Structural Funds, capital grants that ?ow from the European Commission (EC) to Mem- ber States and regional authorities to promote investment and growth at local level. The EU grants need a co-payment by the regional government and do not cover in full the investment cost. We model this situation, similar to several other supra- national or federal contexts, as a simple principal-supervisor-agent model of the investment game between a supranational player (the principal), such as the EC, a non (fully) benevolent regional government (the supervisor), and a private ?rm (the executing agency). We show how the role of providers of additional information, the region (ex-ante) and an evaluator (ex-post) is crucial to reducing the optimal value of the grant and to improving the inef- ?ciencies caused by asymmetric information at the grant decision stage in a federal hierarchy
    Keywords: Hierarchical contracting, project evaluation, EU Regional Policy
    JEL: D82 H77 R58
    Date: 2009–06
  8. By: Hallward-Driemeier, Mary; Thompson, Fraser
    Abstract: This paper examines the impact of firm productivity and local industrial structure on firm entry and exit in Morocco between 1985 and 2001. There is strong evidence of productivity exerting a market-cleansing role. Less productive firms are found to be more likely to exit - and locations with more productive firms attract higher rates of new firm entry. The effect of productivity operates not only in an absolute sense; a firm’s relative productivity or distance to the local sector frontier matters too. First, large productivity gaps are associated with higher rates of exit, while new firms are attracted to locations with small productivity gaps. Second, local competition increases the probability of exit, although it does not encourage entry. Third, there is evidence of scale or agglomeration effects that increase firm turnover. Fourth, measures of sector diversity are not associated with lower turnover. Fifth, the geographic level at which agglomeration and competition effects are defined matters differently for exit than entry. For exit, the provincial measures are strong, while those for communes are weaker. For entry, it is the local productivity at the commune level that is more significant. This implies that competitive pressures are less geographically constrained while the potential benefits of agglomeration and spill-overs are indeed more local.
    Keywords: Microfinance,Labor Policies,Economic Theory&Research,Knowledge for Development,Labor Markets
    Date: 2009–10–01
  9. By: Natário, Maria Manuela
    Abstract: The innovation is the main locomotive of the economic growth and competitiveness. The understanding about innovation process has updated in last decades. The innovation concept not only includes the innovation, but also increases innovation, that can be operated in products but also in the production process, that can be in the conception of the product but also at the level of the market and even at the organizational level. The interactive models of innovation process are put upon linear models and are related with the context, environmental territory. The innovation as a system of innovation became fundamental to competitiveness. Based on these observations, this work intends to analyze the processes and innovation factors, but also enhancing the importance of innovation in system and discussing the main factors which stimulate innovation. The analysis happens on 5 NUTS III at the border of Portugal and Spain. We used the clusters analysis to verify how the companies are positioned in relation to the innovation activities. We intend to characterize the factors and processes of innovation, which distinguish the company’s groupings. The results appear to reveal the existence of three groups of companies and the distinction factors are linked to: general characteristics of companies and its director; initial objectives and innovate sources; cooperation relationships; financial support and obstacles to innovate.
    Keywords: Process of Innovation; Regional Innovation Systems; Innovation.
    JEL: R58 O31
    Date: 2009
  10. By: Blien, Uwe (IAB, Nürnberg); Dauth, Wolfgang (University of Erlangen-Nuremberg); Schank, Thorsten (University of Erlangen-Nuremberg); Schnabel, Claus (University of Erlangen-Nuremberg)
    Abstract: The wage curve identified by Blanchflower and Oswald (1994) postulates that the wage level is a decreasing function of the regional unemployment rate. In testing this hypothesis, most empirical studies have not taken into account that differences in the institutional framework may have an impact on the existence (or the slope) of a wage curve. Using a large-scale linked employer-employee data set for western Germany, this paper provides a first test of the relevance of different bargaining regimes and of works councils for the existence of a wage curve. In pooled regressions for the period 1998 to 2006 as well as in worker-level or plant-level fixed-effects estimations we obtain evidence for a wage curve for plants with a collective bargaining agreement at firm level. The point estimates for this group of plants are close to the -0.1 elasticity of wages with respect to unemployment postulated by Blanchflower and Oswald. In this regime, we also find that works councils dampen the adjustment of wages to the regional unemployment situation. In the other regimes of plants that either do not make use of collective contracts or apply sectoral agreements, we do not find a wage curve.
    Keywords: wages, wage curve, collective bargaining, Germany
    JEL: J50
    Date: 2009–10
  11. By: Babucea Ana-Gabriela; Danacica Emanuela-Daniela (Constantin Brancusi University of Targu Jiu, Faculty of Economics, Romania)
    Abstract: Cluster analysis classifies a set of observations into two or more mutually exclusive unknown groups based on combination of interval variables and it has proven to be very useful. The classification aim is grouping the objects between their similarities or dissimilarities and so providing a synthetic description or a cut of data. In this paper we analyze the disparities into the counties of Romania looking the number of registered unemployed according to the latest official statistical data using one technique of clusters analysis.
    Keywords: cluster analysis, economic crisis, statistics, unemployment
    JEL: J6 C6
    Date: 2009–05
  12. By: Pociovalisteanu Diana-Mihaela (Constantin Brancusi University of Targu Jiu, Faculty of Economics, Romania); Thalassinos Eleftherios (Chair Jean Monnet, University of Piraeus, Grecia)
    Abstract: The cohesion policy adopted by European Union can not materialize without the existence of structural funds. The economic and social disparities between the member countries of European Union and between the regions of EU, too, is reduce through these instruments. The integration of Romania in European Union in 2007, and the use of structural funds in present and in the future, is an opportunity which contribute at the economic development of our country.
    Keywords: structural funds, cohesion policy, economic development
    JEL: O11 R11 H83
    Date: 2009–05
  13. By: Bjerk, David (Claremont McKenna College)
    Abstract: This paper develops a model of crime analyzing how such behavior is associated with individual and neighborhood poverty. The model shows that even under relatively minimal assumptions, a connection between individual poverty and both property and violent crimes will arise, and moreover, "neighborhood" effects can develop, but will differ substantially in nature across crime types. A key implication is that greater economic segregation in a city should have no effect or a negative effect on property crime, but a positive effect on violent crime. Using IV methods, I show this implication to be consistent with the empirical evidence.
    Keywords: poverty, crime, neighborhood effects, segregation, instrumental variables, public housing
    JEL: K42 I38
    Date: 2009–10
  14. By: Mustafa Kemal, Bicerli; Naci, Gundogan
    Abstract: Urbanization -as a worldwide pheonemenon- has increased its pace especially in the twentieth century in all over the World. Turkey is no exception of this process. In Turkey, urbanization has been accelerated since 1950 and it still carries on by increasing its speed. While only 25% of the population had lived in cities in 1927, nowadays this portion of the population has reached to aproximately 70.0 %. Like in many developing countries, women in rural labor markets of Turkey mostly work as unpaid family workers in agriculture and in some non-market activities such as home production and voluntary jobs. It is observed that from 1950’s to today women’s labor force participation rates (LFPRs) in urban areas have been diminished dramatically. Besides other factors that reduces women’s LFP in urban areas, ongoing migration from rural to urban areas seems to play the dominant role in this result. It appears that as a result of migration rural female workers are left without any jobs in the cities. Several factors can be taken into account to explain this transformation such as; cultural values against women’s participation in market work, women’s lack of education and marketable skills, unfavorable labor market conditions and increases in enrollment rates in all levels of schooling. In this paper, we have explained the characteristics, causes and dimensions of female labor force participation in urbanization process of Turkey.
    Keywords: Urbanization; female labor force participation in Turkey; unemployment; gender discrimination
    JEL: J21 J82 J16
    Date: 2009
  15. By: Gundogan , Naci; Bicerli, Mustafa Kemal
    Abstract: Rapid and uncontrolled migration created by the population moving from rural to urban areas causes serious problems from the viewpoint of labor markets. Increases in rural-urban migration flows is contributing to a larger urban labor supply. This increasing labor supply has produced an increasing urban unemployment rate and a deterioration in the quality of employment, as it is evident from the increased informal employment rates. One of the most distinctive features of the economies in developing countries is the fact that more than half of workers are employed in the urban informal sector. Urbanization and informal sector are joint and rising trends in these countries. The informal sector represents a significant part of the economy, and certainly of the labor market in developing economies, and plays a major role in employment creation, production and income generation.
    Keywords: urbanization; informal labor market; urban labor market; rural- urban migration; developing countries
    JEL: J01 E26
    Date: 2009

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