nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒02‒05
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Determinants of Economic Growth in European Regions By Jesus Crespo-Cuaresma; Gernot Doppelhofer; Martin Feldkircher
  2. Cities and Growth: Earnings Levels Across Urban and Rural Areas: The Role of Human Capital By Beckstead, Desmond; Brown, W. Mark; Guo, Yusu; Newbold, Bruce
  3. Regional production adjustment to import competition: evidence from the French agro-industry By Corinne Bagoulla; Emmanuelle Chevassus-Lozza; Karine Daniel; Carl Gaigné
  4. How Transport Costs Shape the Spatial Pattern of Economic Activity By Jacques-François Thisse
  5. Is it reasonable to allocate power to appointed regional authorities? By Claudio Parés
  6. Estimating the Agglomeration Benefits of Transport Investments: Some Tests for Stability By Daniel J. Graham; Kurt Van Dender
  7. The Importance of Labour Mobility for Spillovers across Industries By Johannes Pöschl; Neil Foster
  8. Spatial competition between health care providers: effects of standardization By Kuchinke, Björn A.; Zerth, Jürgen; Wiese, Nadine
  9. The Prospects for Inter-Urban Travel Demand By Yves Crozet
  10. Persistencia de las desigualdades regionales en Colombia: Un análisis espacial By Luis Armando Galvis Aponte

  1. By: Jesus Crespo-Cuaresma; Gernot Doppelhofer; Martin Feldkircher
    Abstract: We use Bayesian Model Averaging (BMA) to evaluate the robustness of determinants of economic growth in a new dataset of 255 European regions in the period 1995-2005. We use three different specifications based on (i) the cross-section of regions, (ii) the cross-section of regions with country fixed effects, and (iii) the cross-section of regions with a spatial autoregressive (SAR) structure. Our results indicate that the income convergence process between countries is dominated by the catching-up process of regions in Central and Eastern Europe (CEE), whereas convergence within countries is mostly a characteristic of regions in old EU member states. We find robust evidence of asymmetric growth performance within countries, with a growth bonus in regions containing capital cities which is particularly sizeable in CEE countries, as well as a robust positive effect of education. The results are robust if we allow for spatial spillovers a priori. In this setting, we also find robust evidence of positive spillovers leading to growth clusters.
    Keywords: model uncertainty, Bayesian Model Averaging (BMA), spatial autoregressive model, determinants of economic growth, urban agglomerations, European regions
    JEL: C11 C15 C21 R11 O52
    Date: 2009–09
  2. By: Beckstead, Desmond; Brown, W. Mark; Guo, Yusu; Newbold, Bruce
    Abstract: Using 2001 Census data, this paper investigates the extent to which the urban-rural gap in the earnings of employed workers is associated with human capital composition and agglomeration economies. Both factors have been theoretically and empirically linked to urban-rural earnings differences. Agglomeration economies-the productivity enhancing effects of the geographic concentration of workers and firms-may underlie these differences as they may be stronger in larger urban centres. But human capital composition may also drive the urban-rural earnings gap if workers with higher levels of education and/or experience are more prevalent in cities. The analysis finds that up to one-half of urban-rural earnings differences are related to human capital composition. It also demonstrates that agglomeration economies related to city size are associated with earnings levels, but their influence is significantly reduced by the inclusion of controls for human capital.
    Keywords: Education, training and learning, Business performance and ownership, Labour, Educational attainment, Regional and urban profiles, Wages, salaries and other earnings
    Date: 2010–01–25
  3. By: Corinne Bagoulla; Emmanuelle Chevassus-Lozza; Karine Daniel; Carl Gaigné
    Abstract: This paper aims at evaluating the impact of increasing imports on the reallocation of agrifood production across regions within countries. From French data for the period 1995-2002, we show that regional agri-food production adjusts differently to increasing imports according to the region where the agri-food firms are located. More precisely, even though proximity to consumers significantly shapes the spatial distribution of agri-food production, an increase in agri-food imports does not make regions with a high demand more attractive but makes low-wage regions more attractive. In addition, an increase in imports of agricultural products processed by agri-food firms leads to the reallocation of agri-food production from regions with good access to agricultural products towards those withlimited access.
    Keywords: trade openness, location, agri-food
    JEL: R12 F12
    Date: 2010
  4. By: Jacques-François Thisse
    Abstract: By its very nature, transport is linked to trade. Trade being one of the oldest human activities, the transport of commodities is, therefore, a fundamental ingredient of any society. People get involved in trade because they want to consume goods that are not produced within reach. The Silk Road provides evidence that shipping high-valued goods over long distances has been undertaken because of this very precise reason. But why is it that not all goods are produced everywhere? The reason is that regions are specialized in the production of certain products. The first explanation for specialization that comes to mind is that nature supplies specific environments needed to produce particular goods. According to Diamond (1997), spatial differences in edible plants, with abundant nutrients, and wild animals, capable of being domesticated to help man in his agricultural and transport activities, explain why only a few regions have become independent centers of food production. Though relevant for explaining the emergence of civilization in a few areas, we must go further to understand why, in the wake of the Industrial Revolution, interregional and international trade has grown so rapidly.
    Date: 2009–12
  5. By: Claudio Parés (Departamento de Economía, Universidad de Concepción)
    Abstract: Political decentralization involves an incentive game in which the President and regional authorities have to share power to provide public goods. In such a game, it is never reasonable to allocate political power to appointed Governors. In fact, when formal authority goes to the President —i.e. under administrative decentralization—, the maximization of the expected public good provision lead to allocate no real authority to Governors. In other words, mere delegation does not exist because regional incentives are not high enough. On the other hand, if formal authority is given to regions —i.e. under democratic decentralization where regional authorities are elected—, Governors may receive some real authority if their incentives are high enough. Additionally, other results of the model say that communication between regions makes the President more accountable and may revert a decentral allocation made under no communication. Finally, asymmetric regions prefer different power allocations and power concerns lead national politicians to avoid proposing decentralizing reforms.
    Date: 2009
  6. By: Daniel J. Graham; Kurt Van Dender
    Abstract: The case for including agglomeration benefits within transport appraisal rests on an assumed causality between access to economic mass and productivity. Such causality is difficult to establish empirically because estimates may be subject to sources of bias from endogeneity and confounding. They may also be sensitive to the range of sample variance in agglomeration being used. The purpose of this paper is to demonstrate some of the key difficulties that the researcher faces in estimating agglomeration economies and to show how these can affect the calculation of agglomeration benefits for the appraisal of transport projects. The results show a high degree of sensitivity to treatment for unobserved heterogeneity and to differences in the sample variance of agglomeration. A key conclusion is that we are unable to distinguish agglomeration effects from other potential explanations for productivity increases, most notably functional heterogeneity. Consequently, the agglomeration effects of transport investments cannot be interpreted causally.
    Keywords: transport, agglomeration, causality, heterogeneity, confounding
    JEL: R12 R42
    Date: 2009–12
  7. By: Johannes Pöschl (The Vienna Institute for International Economic Studies, wiiw); Neil Foster (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper addresses the link between productivity and labour mobility. The hypothesis tested in the paper is that technology is transmitted across industries through the movement of skilled workers embodying human capital. The embodied knowledge is then diffused within the new environment creating spillovers and leading to productivity improvements. A theoretical framework is presented wherein productivity growth is modelled through knowledge acquisition with respect to labour mobility. The empirical estimates confirm the existence of positive cross-sectoral knowledge spillovers and indicate that labour mobility has beneficial effects on industry productivity. Due to the fact that labour mobility is closely linked to input-output relations this finding provides evidence suggesting that part of the estimated productivity effects of domestic rent spillovers are in fact due to knowledge spillovers resulting from labour mobility.
    Keywords: knowledge spillovers, labour mobility, productivity, manufacturing, industry, human capital, growth
    JEL: J24 J60 O47
    Date: 2009–10
  8. By: Kuchinke, Björn A.; Zerth, Jürgen; Wiese, Nadine
    Abstract: In the international health care literature there is a broad discussion on impacts of competition in health care markets. But aspects of standardization in regional health care markets with no price competition received comparatively little attention. We use a typical Hotelling-framework (reference case) to analyze a regional health care market with two health care providers competing in (vertical) quality after the scope of medical treatment is set (horizontal quality). We conclude, that in the reference case both health care provider will use vertical quality to separate from each other. In the next step (standardization case) we introduce one health care provider to be the standard leader in vertical quality. In the standardization case a more homogeneous supply can be expected. But, there is a higher possibility that the standard follower has to leave the regional health care market. --
    Date: 2009
  9. By: Yves Crozet
    Abstract: The great difference between our journeys and activity schedules and those of our forebears lies in the much longer distances we travel. By road, and even more so by rail and air, nowadays we can cover hundreds or even thousands of miles in a few hours. Inter-urban mobility is directly affected by these developments. Where international travel by coach and sailing ship used to take weeks, and intercontinental journeys sometimes even longer, we now count the time in hours. The transport revolution has played a major part in the economic history of the last two centuries (Niveau and Crozet, 2000), but it must be emphasized that the change has been gradual. Over two hundred years have passed between the stage-coach and the high-speed train, the clipper and the jet, during which technological progress and the higher speeds it enables have spread relatively slowly. Even with key technological revolutions like the railways, the automobile and the aeroplane, it took several decades for them to become available to the population at large. From this slow percolation of technological progress into the way we live has arisen the idea that steadily increasing mobility is a structural given of modern society. Further, faster seems to have become the general rule, to such an extent that even space travel, so we are told, will become more widely available in the relatively near future. A few very wealthy people have already become the world's first space tourists. It is the self-evident nature of this long-term trend towards increased mobility that we wish to examine in this report, since a number of factors could well undermine the relatively classic assumption that past trends will continue into the future.
    Date: 2009–12
  10. By: Luis Armando Galvis Aponte
    Abstract: Los niveles de persistencia en la pobreza a menudo están asociados a los “efectos de vecindario”. Estos efectos crean trampas de pobreza que no le permiten a las zonas rezagadas avanzar hacia una senda de desarrollo económico sostenido. En las regiones de un país también pueden operar este tipo de mecanismos. Esa es una de las razones por las cuales las desigualdades territoriales se vuelven persistentes, convirtiéndose en un equilibrio perverso. En Colombia las desigualdades regionales se han mantenido y se han vuelto persistentes. Ello se evidencia en las correlaciones que existe en la distribución de los índices de NBI en los censos de 1973, 1985, 1993 y 2005. Existe una alta correlación simple entre estos índices de NBI cuando se comparan los censos de manera consecutiva. Lo que realmente sorprende es que la alta correlación existente cuando se comparan los resultados de los censos que se han realizado 20 años atrás. Utilizando técnicas de la econometría espacial se aporta evidencia en torno a la persistencia en la pobreza, no solo a nivel temporal, sino regional. Uno de los resultados a destacar de este estudio es que cuando se efectúan las correlaciones espaciales entre las condiciones de pobreza de una municipalidad en años recientes con las de su entorno en épocas posteriores, se encuentran altas y significativas correlaciones espaciales. Ello puede ser interpretado como evidencia de la existencia de trampas espaciales, pues existen municipios que se han mantenido deprimidos, al igual que sus "vecindarios", a través del tiempo. En el análisis de clusters espaciales se encuentra que los clusters de alta pobreza están localizados en la periferia del país.
    Date: 2010–01–25

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