nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒02‒20
thirteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Economic geographers and the limelight: The reaction to the 2009 World Development Report By Andrés Rodríguez-Pose
  2. Local Sustainable Development and Spatial Cohesion in the Post-transition Balkans: in search of a developmental model By Vassilis Monastiriotis and George Petrakos
  3. Effects of the EU-Enlargement on Income Convergence in the Eastern Border Regions By Fredrik Wilhelmsson
  4. East-West Integration and the Economic Geography of Europe By Arne Melchior
  5. Shadow wages for the EU regions By Chiara Del Bo; Massimo Florio; Carlo Fiorio
  6. EU Cohesion policy: some fundamental questions By Indhira Santos
  7. What shapes local public transportation in Europe? Economics, Mobility, Institutions, and Geography By Germa Bel; Daniel Albalate
  8. Speed limit laws in America: Economics, politics and geography By Daniel Albalate; Germà Bel
  9. Regional convergence in Italy: time series approaches By De Siano, Rita; D'Uva, Marcella
  10. Macroeconomic implications of agglomeration By Morris A. Davis; Jonas D. M. Fisher; Toni M. Whited
  11. Assessment of the Regional Economic Impacts of Catastrophic Events: CGE analysis of resource loss and behavioral effects of a RDD attack scenario By J.A. Giesecke; W.J. Burns; A. Barrett; E. Bayrak; A. Rose; M. Suher
  12. Supporting Regional and Local Business Development By Caruntu, Genu Alexandru; Damian, Ion
  13. The Path to Purchase During Shopping By Piyush Kumar Sinha; Gopi Krishnaswamy

  1. By: Andrés Rodríguez-Pose (IMDEA Ciencias Sociales)
    Abstract: The reaction of economic geographers to the World Bank\'s World Development Report 2009 – Reshaping Economic Geography – has so far been a corporatist turf-protecting exercise. The report has been dismissed as the work of economists who completely ignore a rich tradition of work by \'proper\' economic geographers. However, this negative response has prevented geographers from engaging constructively with the World Bank\'s analysis and proposals. In this note I argue that, while the report presents an accurate diagnosis of recent development trends and should be praised for its flexibility in providing numerous policy alternatives, geographers can significantly contribute to promote a discussion around two key issues in the report: its treatment of institutions and its recommendation of spatially-blind policies.
    Date: 2010–01–11
  2. By: Vassilis Monastiriotis and George Petrakos
    Abstract: The transition process that started in the Balkans some twenty years ago, and the European association process to which it has been inexorably connected, has led to a radical transformation of the Balkan economic space across local, regional, national and trans-national levels. Amongst the other effects that this have had, was the emergence of new and acute socio-economic dichotomies (polarisation) and problems of persistent underdevelopment, peripherality-rurality and economic dependence. In this paper we review the policies that have been applied to address these issues and examine the relevance of contemporary concepts of local economic development for the mobilisation of cohesive and sustainable development in the Balkans. We examine how the main elements of the new regionalist developmental strategy relate to the basic dimensions of socio-spatial infrastructure in the Balkans and identify the key weaknesses of the latter. We conclude by proposing a wider regional strategy that will be able to r solve the existing deficiencies by means of a regional cooperation approach that will seek to maximise intra-regional synergies and develop local and regional comparative advantages and the provision of similar public goods.
    Keywords: New regionalism, regional cooperation, spatial connectivity, Balkan Development Strategy
    Date: 2009–11
  3. By: Fredrik Wilhelmsson
    Abstract: This paper analyses the effect of the EU enlargement process on income convergence among regions in the EU and in the Eastern neighbourhood of the EU. The data used is NUTS II regions in the EU and Oblasts' of Russia over the period 1996-2004. The estimation techniques used take into account both regional and spatial heterogeneity. The main findings are that the regional income differences are reduced within EU15. The income convergence within the EU is mainly driven by reductions in the differences across countries rather than by a reduction in regional differences within countries. When differences in initial conditions in the regions are controlled for by fixed regional effects there are strong evidences of convergence among regions in all studied country groups.
    Keywords: Income convergence, European integration, Border effects
    JEL: R11 O18
    Date: 2009
  4. By: Arne Melchior
    Abstract: Implementation of the European internal market and East-West integration has been accompanied by dramatic change in the spatial distribution of economic activity, with higher growth west and east of a longitude degree through Germany and Italy. In the east, income growth has been accompanied by increasing regional disparities within countries. We examine theoretically and empirically whether European integration as such can explain these developments. Using a numerical simulation model with 9 countries and 90 regions, theoretical predictions are derived about how various patterns of integration may affect the income distribution. Comparing with reality, we find that a reduction in distance-related trade costs combined with east-west integration is best able to explain the actual changes in Europe's economic geography. This suggests that the implementation of the European internal market or the Euro has "made Europe smaller". In Central Europe, capital regions grow faster and there are few east-west growth differences inside countries. There is no convincing support for the hypothesis that European integration had adverse effects on non-members.
    Keywords: Income distribution, regional inequality, economic growth and convergence, European integration.
    JEL: F12 F15 R12 O18
    Date: 2009
  5. By: Chiara Del Bo (Università degli Studi); Massimo Florio (University of Milan); Carlo Fiorio (University of Milan)
    Abstract: The shadow wage is the social opportunity cost of labor. After reviewing earlier theoretical and empirical literature, we define four labor market conditions: fairly socially efficient (FSE), quasi-Keynesian unemployment (QKU), urban labor dualism (ULD) and rural labor dualism (RLD). We offer, for the first time to date, an empirical estimation of the shadow wages for the EU at regional (NUTS2) level. Our estimated values are in the form of conversion factors that translate actual observed real wages into shadow wages, as required by social cost-benefit analysis of investment projects under the Structural Funds of the EU. Our results are obtained with an empirical strategy that is easy to implement with aggregate data, differently from micro-data based approaches that are costly, project specific, and often difficult to be applied because of lack of data. We find that the conversion factor for the shadow wage rate is 0.998 in 29 FSE regions (mostly capital cities); 0.943 in 135 ULD regions (mostly in rich areas); 0.8005 in 74 QKU regions, and just 0.519 in 32 RLD regions. These findings point to high variability of labor markets in the EU and have important applications for project evaluation.
    Keywords: Shadow wage, project evaluation, EU regions,
    Date: 2009–10–26
  6. By: Indhira Santos
    Abstract: Indhira Santos analyses the impact of the European Union's cohesion policy both in terms of economic efficiency and redistribution to needy areas of the EU. She illustrates with data the confusion created by the multiple objectives of current EU cohesion policy and by the political horse-trading over levels of aid granted to different member states and regions. Finally, sh shows how a significant part of EU structural funds involvesine net economic termssimply transferring funds between individuals within one and the same region.
    Date: 2009–05
  7. By: Germa Bel; Daniel Albalate
    Abstract: This paper analyzes the factors that explain supply and demand of local public transportation. Together with variables related to economics and mobility, we consider variables reflecting institutional characteristics and geographical patterns. Being a political capital increases supply and demand of local public transportation, inequality is associated with higher supply, and contracting out reduces supply. Furthermore, our regional analysis allows us capturing the effect of geographical characteristics and different traditions of government intervention. In all, we provide first evidence on the role played by institutional and regional characteristics useful to achieve a better understanding of local public transportation supply and demand.
    Keywords: Urban transportation,Local government,Mobility,Institutions and Geography
    Date: 2009–07–03
  8. By: Daniel Albalate (Faculty of Economics, University of Barcelona); Germà Bel (Faculty of Economics, University of Barcelona)
    Abstract: The regulation of speed limits in the US had been centralized at the federal level since 1974, until decisions were devolved to the states in 1995. However, the centralization debate has reemerged in recent years. Here, we conduct the first econometric analysis of the determinants of speed limit laws. By using economic, geographic and political variables, our results suggest that geography -which affects private mobility needs and preferences- is the main factor influencing speed limit laws. We also highlight the role played by political ideology, with Republican constituencies being associated with higher speed limits. Furthermore, we identify the presence of regional and time dependence effects. By contrast, poor road safety outcomes do not impede the enactment of high speed limits. Overall, we present the first evidence of the role played by geographical, ideological and regional characteristics, which provide us with a better understanding of the formulation of speed limit policies.
    Keywords: Speed Limit Laws; Transport Policy; Social Preferences; Policy Analysis.
    Date: 2010–01
  9. By: De Siano, Rita; D'Uva, Marcella
    Abstract: This paper investigates the evolution of the gap between Italian regions and Italy as a whole during the period 1980-2007. We tested for the presence of the stochastic and β-convergence hypotheses using different time series approaches. The former was studied, first, for all the sample period and then, with an exogenous instantaneous break in the series. The presence of β-convergence, instead, was estimated considering a known and an unknown trend break date model. Our results show that most of the regions does not converge in an “actual” way, since they do not present a stochastic and β convergence simultaneously.
    Keywords: β-convergence; stochastic convergence; time series approach; regional convergence
    JEL: C13 R15 R11
    Date: 2009–11–18
  10. By: Morris A. Davis; Jonas D. M. Fisher; Toni M. Whited
    Abstract: The authors construct a dynamic general equilibrium model of cities and use it to estimate the effect of local agglomeration on per capita consumption growth. Agglomeration affects growth through the density of economic activity: higher production per unit of land raises local productivity. Firms take productivity as given; produce using a technology that has constant returns in developed land, capital, and labor; and accumulate land and capital. If land prices are rising, as they are empirically, firms economize on land. This behavior increases density and contributes to growth. They use a panel of U.S. cities and our model's predicted relationship among wages, output prices, housing rents, and labor quality to estimate the net effect of agglomeration on local wages. The impact of agglomeration on the level of wages is estimated to be 2 percent. Combined with their model and observed increases in land prices, this estimate implies that agglomeration raises per capita consumption growth by 10 percent.
    Keywords: Balanced Growth, Economic Growth, Productivity, Externalities, Increasing Returns, Agglomeration, Density
    Date: 2010
  11. By: J.A. Giesecke; W.J. Burns; A. Barrett; E. Bayrak; A. Rose; M. Suher
    Abstract: Using a large-scale CGE model, we investigate the short-run and long-run regional economic consequences of a catastrophic event - attack via radiological dispersal device (RDD) - centered on the downtown Los Angeles area. We distinguish two main routes via which such a catastrophic event might affect regional economic activity: (i) reduction in effective resource supply (the resource loss effect) and (ii) shifts in the perceptions of economic agents (the behavioral effect). Broadly, the resource loss effect relates to the physical destructiveness of the event, while the behavioral effect relates to changes in fear and risk perception on the part of firms, households and government. Both affect the size of the regional economy. RDD detonation (Dirty Bomb) causes little direct capital damage and few casualties, but generates substantial short-run resource loss via business interruption. Changes in fear and risk perception increase the supply cost of resources to the affected region, while simultaneously reducing demand for goods produced in the region. In both the short-run and long-run in the affected region, households may require higher wages to work, investors may require higher returns to invest, and economic agents may switch their preferences away from goods produced. We show that because perception effects may have lingering long-term deleterious impacts on both the supply-cost of resources to a region and willingness to pay for regional output, they have the potential to generate changes in real regional GDP that are much greater than those generated by the resource loss effect. Implications for policy that might mitigate these effects are discussed.
    Keywords: RDD, economic impact, terrorism, risk perception
    JEL: H56 R13 C68 D58
    Date: 2010–01
  12. By: Caruntu, Genu Alexandru; Damian, Ion
    Abstract: Affairs support structures (SSA) is a clearly defined structures, which provides a range of facilities and / or spaces for economic activities of production and services (except those that are not financed under ERDF rules). These are aimed at attracting investment and unlocking the potential of development - human and material resources - the various parts of Romania and in particular of former industrial areas in decline
    Keywords: the eligible value projects; administrative-territorial units; eligible activities; community contribution
    JEL: R58 O2 Q56 G32
    Date: 2010–01
  13. By: Piyush Kumar Sinha; Gopi Krishnaswamy
    Abstract: The proposed study aims to identify and analyse the path to purchase for shoppers. This study will attempt to understand the impact of the major factors on the purchase behaviour of shoppers by examining purchase paths across different product categories signifying different shopping orientations; across culturally distinct regions; and across different stages of retail evolution.
    Keywords: communication, internet, retailers, fashion appeal, shops, buying decision, shopping, purchase, shoppers, product, shopping, regions, retail,
    Date: 2010

This nep-geo issue is ©2010 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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