nep-geo New Economics Papers
on Economic Geography
Issue of 2009‒11‒21
thirteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The city mouse and the country mouse: the geography of creativity and cultural production in Italy By Bertacchini Enrico; Borrione Paola
  2. Spaces of Innovation: learning, proximity and the ecological turn By Adrian Healy; Kevin Morgan
  4. Entrepreneurship and Market Size. The Case of Young College Graduates in Italy By Sabrina Di Addario; Daniela Vuri
  5. Inter-regional redistribution through infrastructure investment: tactical or programmatic? By Albert Solé-Ollé
  6. Do colleges and universities increase their region's human capital? By Jaison R. Abel; Richard Deitz
  7. Regional restriction, strategic delegation, and welfare By Toshihiro Matsumura; Noriaki Matsushima
  8. Sustainable Urban Development In India: Some Issues By Basudha Chattopadhyay
  9. Romes without Empires: Urban Concentration, Political Competition, and Economic Growth By Cem Karayalcin; Mehmet Ali Ulubasoglu
  10. Iceberg transport technologies in spatial competition. Hotelling reborn By Xavier Martinez-Giralt; José María Usategui
  11. Regionalizing telecommunications reform in West Africa By Kessides, Ioannis N.; Noll, Roger G.; Benjamin, Nancy C.
  12. Neighborhood effects on unemployment ? A test à la Altonji By Claire Dujardin; Florence Goffette-Nagot
  13. The role of geographic mobility in reducing education-job mismatches in the Netherlands By Hensen Maud M.; Vries M. Robert de; Cörvers Frank

  1. By: Bertacchini Enrico; Borrione Paola
    Abstract: Through census employment data we analyze the evolving structure of the Italian cultural economy and highlights diverging spatial and organizational patterns of cultural production systems in urban and regional areas. Whilst large metropolitan areas remain the more important loci of cultural content production and consumption, craft-based sectors and creative systems of design have a tendency to locate in non-metropolitan centers. Based on the historical formation of manufacturing districts and on the emergence of Rome and Milan as “world cities”, the Italian cultural economy provides an interesting case study to analyze the geographical patterns of different cultural product industries. We extend previous literature on the geography of the cultural economy by offering new insights as to conditions in which metropolitan and rural areas emerge as leading centers of cultural production and creativity.
    Date: 2009–10
  2. By: Adrian Healy; Kevin Morgan
    Abstract: Contrary to the fashionable “death of distance” thesis, the socio-spatial context for innovation remains as important as ever for firms, networks and the public institutions that tend to be neglected in orthodox narratives of learning. In this article we explore the changing socio-spatial dynamics of innovation through the medium of three arguments: (i) that the “learning region” debate was worth having because it triggered a fruitful dialogue between innovation theorists and economic geographers; (ii) that geographical proximity remains central to our understanding of learning and innovation and should not be reduced to, or conflated with, physical co-location; and (iii) that “the ecological turn” challenges conventional conceptions of learning, innovation and development, posing unsettling questions about the forces of path dependency, especially in less favoured regions.
    Keywords: Learning, regions, innovation, proximities
    JEL: O31 O38 R11
    Date: 2009–11
  3. By: Francesco Aiello; Valeria Pupo (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: This paper aims to provide a contribution to the debate on the effectiveness of cohesion policies in Italy. The focus is on the territorial effects of EU spending from 1996 to 2007. The empirical analysis is based on the estimate of an expanded neoclassical growth model in which the Structural Funds are one of the variables that explain the convergence across Italian regions. Using panel data and a dynamic panel estimator we find that the Structural Funds, even having had a greater impact in the South compared to the Centre-North, have not contributed to reduce the economic divide in Italy.
    Keywords: Structural Funds, Regional Policy, Economic Divide in Italy
    JEL: H50 R58 O47
    Date: 2009–10
  4. By: Sabrina Di Addario (Bank of Italy); Daniela Vuri (University of Rome Tor Vergata)
    Abstract: We analyze empirically the effects of urban agglomeration on Italian college graduates’ work possibilities as entrepreneurs three years after graduation. We find that each 100,000 inhabitant-increase in the size of the individual’s province of work reduces the chances of being an entrepreneur by0.2 per cent. This result is robust to controlling for regional fix effects and to instrumenting urbanization with three different sets of instruments. However, a positive urbanization externality emerges after taking into account urban amenities and dis-amenities, and, above all, provinces’ competition and cost of labor. In this case, every 100,000 inhabitant-increase raises the chance of entrepreneurship by 2.4 percent. Finally, as long as they succeed in entering the largest markets, young entrepreneurs are able to reap off the benefits of urbanization externalities: every 100,000 inhabitant-increase in the province’s population raises entrepreneurs’ net hourly income by 0.2 percent.
    Keywords: Labor market transitions; Urbanization
    JEL: R12 J24 J21
    Date: 2009–11–17
  5. By: Albert Solé-Ollé (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB))
    Abstract: In this paper we analyze the effects of both tactical and programmatic politics on the inter-regional allocation of infrastructure investment. We use a panel of data for the Spanish electoral districts during the period 1964-2004 to estimate an equation where investment depends both on economic and political variables. The results show that tactical politics do matter since, after controlling for economic traits, the districts with more ‘Political power’ still receive more investment. These districts are those where the incumbents’ Vote margin of victory/ defeat in the past election is low, where the Marginal seat price is low, where there is Partisan alignment between the executives at the central and regional layers of government, and where there are Pivotal regional parties which are influential in the formation of the central executive. However, the results also show that programmatic politics matter, since inter-regional redistribution (measured as the elasticity of investment to per capita income) is shown to increase with the arrival of the Democracy and EU Funds, with Left governments, and to decrease the higher is the correlation between a measure of ‘Political power’ and per capita income.
    Keywords: Infrastructures, Political Economy, Redistribution
    JEL: R1 O4
    Date: 2009–11
  6. By: Jaison R. Abel; Richard Deitz
    Abstract: We investigate whether the degree production and research and development (R&D) activities of colleges and universities are related to the amount and types of human capital present in the metropolitan areas where the institutions are located. We find that degree production has only a small positive relationship with local stocks of human capital, suggesting that migration plays an important role in the geographic distribution of human capital. Moreover, we show that spillovers from academic R&D activities tilt the structure of local labor markets toward occupations requiring innovation and technical training. These findings demonstrate that colleges and universities raise local human capital levels by increasing both the supply of and demand for skill.
    Keywords: Research and development ; Human capital ; Universities and colleges ; Regional economics ; Labor market
    Date: 2009
  7. By: Toshihiro Matsumura; Noriaki Matsushima
    Abstract: We investigate the effects of restricting locations of firms into Hotelling duopoly models. In the standard location-price models, the equilibrium distance between firms is too large from the viewpoint of consumer welfare. Thus, restricting locations of firms and reducing the distance between firms improve consumer welfare, through lower prices and smaller transportation costs for consumers. We introduce strategic reward contracts into the location-price models. We find that in contrast to the above existing result, restriction of the locations of firms reduces consumer welfare. Restricting locations of the firms reduces transportation costs but increases the prices through the change of strategic commitments by the firms, and it yields a counterintuitive result.
    Date: 2009–11
  8. By: Basudha Chattopadhyay
    Abstract: This paper aims at discussing some of the important issues relating to sustainable urban form that would lead to sustainable urban development with possible references to India. The paper is based on available literature and secondary data. The study discusses the compact city debate and next it explains the concept and possibilities of multi-modal urban region as a city form. [Discussion Paper No.5]
    Keywords: sustainable, urban, development, India, secondary data, city, region, population, social infrastructure, transportation, employment, shelter, basic services, Millennium Development Goals, climate change, environmental, social, equity
    Date: 2009
  9. By: Cem Karayalcin; Mehmet Ali Ulubasoglu
    Abstract: Many developing economies are characterized by the dominance of a super metropolis. Taking historical Rome as the archetype of a city that centralizes political power to extract resources from the rest of the country, we develop two models of rent-seeking and expropriation which illustrate different mechanisms that relate political competition to economic outcomes. The "voice" model shows that rent-seeking by different interest groups (localized in different specialized cities/regions) will lead to low investment and growth when the number of such groups is small. The "exit" model allows political competition among those with political power (to tax or expropriate from citizens) over a footloose tax base. It shows that when this power is centralized in relatively few urban nodes, tax rates would be higher and growth rates lower. Our empirical work exploits the connection between urban wealth (with the political power it affords) and national soccer championships. By using a cross-country data set for 103 countries for the period 1960-99, we find strong and robust evidence that countries with higher concentrations in urban wealth-as proxied by the number of different cities with championships in national soccer leagues-tend to have lower long-run growth rates.
    Date: 2009–11–11
  10. By: Xavier Martinez-Giralt; José María Usategui
    Abstract: Transport costs in address models of differentiation are usually modeled as separable of the consumption commodity and with a parametric price. However, there are many sectors in an economy where such modeling is not satisfactory either because transportation is supplied under oligopolistic conditions or because there is a difference (loss) between the amount delivered at the point of production and the amount received at the point of consumption. This paper is a first attempt to tackle these issues proposing to study competition in spatial models using an iceberg-like transport cost technology allowing for concave and convex melting functions.
    Keywords: Spatial Competition, Iceberg transport costs
    JEL: L12 D42 R32
    Date: 2009–11–11
  11. By: Kessides, Ioannis N.; Noll, Roger G.; Benjamin, Nancy C.
    Abstract: In recent years, there has been an increasing recognition that significant welfare gains could be realized through deep forms of regional integration which entail harmonization of legal, regulatory and institutional frameworks. Reforms that reduce cross-border transaction costs and improve the performance of “backbone” infrastructure services are arguably even more important for the creation of an open, unified regional economic space than trade policy reforms narrowly defined. This paper assesses the potential gains from regionalized telecommunications policy in West Africa. To this end, the paper: (i) discusses how regional cooperation can overcome national limits in technical expertise, enhance the capacity of nations credibly to commit to stable regulatory policy, and ultimately facilitate infrastructure investment in the region; (ii) identifies trade-distorting regulations that inhibit opportunities for regional trade and economic development, and so are good candidates for regional trade negotiations to reduce indirect trade barriers; and (iii) describes substantive elements of a harmonized regional regulatory policy that can deliver immediate performance benefits.
    Keywords: E-Business,Environmental Economics&Policies,ICT Policy and Strategies,Transport Economics Policy&Planning,Emerging Markets
    Date: 2009–11–01
  12. By: Claire Dujardin (Université catholique de Louvain, CORE, Voie du Roman Pays, 34, B-1348 Louvain-la-Neuve, Bel- gium); Florence Goffette-Nagot (University of Lyon; CNRS, UMR 5824, GATE, France)
    Abstract: The aim of this paper is to test for the influence of neighborhood deprivation on individual unemployment probability in the case of Lyon (France). We estimate a bivariate probit model of unemployment and location in a deprived neighborhood. Our identiï¬cation strategy is twofold. First, we instrument neighborhood type by the gender composition of household’s children and the spouse’s workplace. Second, we use the methodology proposed by Altonji et al. (2005), that in our case consists in making hypotheses as to the correlation between the unobservables that determine unemployment and the unobservables that influence the selection into neighborhood types. Our results show that the effect of neighborhood deprivation is not significantly different from zero in the bivariate probit with exclusion restrictions. We also show that a correlation of the unobservables as low as ten percent of the correlation of observables is sufficient to explain the positive neighborhood effect that is observed when endogeneity is not accounted for.
    Keywords: Neighborhood effects, unemployment, simultaneous probit models, instrumental variables, selection on unobservables
    JEL: R2 I32
    Date: 2009
  13. By: Hensen Maud M.; Vries M. Robert de; Cörvers Frank (ROA rm)
    Abstract: In this article we investigate the relationship between geographic mobility andeducation-job mismatch in the Netherlands. We focus on the role of geographicmobility in reducing the probability of graduates working (i) jobs below theireducation level; (ii) jobs outside their study fi eld; (iii) part-time jobs; (iv) fl exiblejobs; or (v) jobs paid below the wage expected at the beginning of the career. For thispurpose we use data on secondary and higher vocational education graduates in theperiod 1996–2001. We show that graduates who are mobile have higher probabilityof fi nding jobs at the acquired education level than those who are not. Moreover,mobile graduates have higher probability of fi nding full-time or permanent jobs.Th is suggests that mobility is sought to prevent not only having to take a job belowthe acquired education level, but also other education-job mismatches; graduates arespatially fl exible particularly to ensure full-time jobs.
    Keywords: education, training and the labour market;
    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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.