nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒02‒27
eight papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Specialization and growth in Italy: what spatial econometric analysis tells us. By Rita De Siano; Marcella D'Uva
  2. Metropolitan Cities under Transition: The Example of Hamburg/Germany By Amelie Boje; Ingrid Ott; Silvia Stiller
  3. Are
 friendly? By Carl Gaigné; Stéphane Rioux; Jacques-François Thisse
  4. Agglomeration Premium and Trading Activity of Firms By Gabor Bekes; Peter Harasztosi
  5. Dialects, Cultural Identity, and Economic Exchange By Falck, Oliver; Heblich, Stephan; Lameli, Alfred; Suedekum, Jens
  6. The impact of roads on poverty reduction : a case study of Cameroon By Gachassin, Marie; Najman, Boris; Raballand, Gael
  7. The Effect of Enclave Residence on the Labour Force Activities of Immigrants in Canada By Tu, Jiong
  8. Tax Devolution and Grant Distribution to States in India Analysis and Roadmap for Alternatives By R Mohan; Shyjan D

  1. By: Rita De Siano; Marcella D'Uva (-)
    Abstract: This paper investigates the determinants of Italian regional specialization in the period 1995-2006. In particular, it tests and evaluates the presence of spatial autocorrelation in sectoral specialization patterns by the use of spatial econometrics tools. Results show positive effects of neighbouring regions specialization for advanced industry and services sectors and hence a progressive synchronization of economic cycles. By contrast, sectors traditionally considered backward, evidence the presence of a core-periphery structure. The introduction of spatial effects in the general regression model increases the number of significant explicative variables. In accordance with the findings from New Economic Geography openness and market access positively affect regional specialization in most of the considered sectors.
    Keywords: Specialization, Regional growth, Spatial Econometrics.
    JEL: C13 C21 R11 R12
    Date: 2010–01–29
  2. By: Amelie Boje (University of Aberdeen); Ingrid Ott (Institute of Economics, Leuphana University of Lüneburg, Germany); Silvia Stiller (Hamburg Institute of International Economics (HWWI))
    Abstract: In the intermediate and long run energy prices and hence transportation costs are expected to increase significantly. According to the reasoning of the New Economic Geography this will strengthen the spreading forces and thus affect the economic landscape. Other influencing factors on the regional distribution of economic activity include the general trends of demographic and structural change. In industrialized countries, the former induces an overall reduction of population and labor force whereas the latter implies an ongoing shift to the tertiary sector and increased specialization. Basically, cities provide better conditions to cope with these challenges than rural regions. Since the general trends affect all economic spaces similarly, city-specific factors also have to be considered in order to derive the impact of rising energy costs on future urban development. With respect to Hamburg regional peculiarities include the overall importance of the harbor as well as the existing composition of the industry and the service sector. The analysis highlights that rising energy and transportation costs will open up a range of opportunities for the metropolitan region.
    Keywords: urban development; regional specialization; structural change; demographic change; transportation costs.
    JEL: R11 J11
    Date: 2010–02
  3. By: Carl Gaigné (INRA-ESR - Unité d'économie et de sociologie rurales - INRA); Stéphane Rioux (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Jacques-François Thisse (CORE - Université Catholique de Louvain)
    Abstract: There is a large consensus among international institutions and national governments to favor urban-containment policies - the compact city - as a way to reduce the ecological footprint of cities. This approach overlooks the following basic trade-off: the concentration of activities decreases the ecological footprint stemming from commodity shipping between cities, but it increases emissions of greenhouse gas by inducing longer worktrips. What matters for the ecological footprint of cities is the mix between urban density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher urban density makes cities more environmentally friendly and raises global welfare. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the relocation of activities between cities, the relationship between density and the ecological footprints appears to be much more involved. Indeed, because changes in urban density affect land rents and wages, firms are incited to relocate, thus leading to new commuting patterns. We show policies that favor the decentralization of jobs in big cities may reduce global pollution and improve global welfare.
    Keywords: greenhouse gas; commuting costs; transport costs; cities; urban containment policy
    Date: 2010
  4. By: Gabor Bekes (Institute of Economics - Hungarian Academy of Sciences); Peter Harasztosi (Phd Student - Central Europan University)
    Abstract: Firms may benefit from proximity to each other due to the existence of several externalities. The productivity premia of firms located in agglomerated regions an be attributed to savings and gains from external economies. However, the capacity to absorb information may depend on activities of the firm, such as involvement in international trade. Importers, exporters and two-way traders are likely to employ a different bundle of resources and be organised differently so that they would appreciate inputs and information from other firms in a different fashion and intensity. Getting a better understanding of such external economies by looking at various types of firms is the focus of present paper. Using Hungarian manufacturing data from 1992-2003, we confirm that firms perform better in agglomerated areas and show that traders gain more in terms of productivity than non-traders when agglomeration rises. Firms that are stable participants of international trade gain 16 % in terms of total factor productivity growth as agglomeration doubles while non-traders may not benefit from agglomeration at all. Results also suggest that traders' productivity premium is most apparent in urbanised economies.
    Keywords: agglomeration, international trade, firm heterogeneity
    JEL: F14 R12 R30
    Date: 2010–01
  5. By: Falck, Oliver (Ifo Institute for Economic Research); Heblich, Stephan (Max Planck Institute for Economics); Lameli, Alfred (University of Marburg); Suedekum, Jens (University of Duisburg-Essen)
    Abstract: We investigate whether time-persistent cultural borders impede economic exchange across regions of the same country. To measure cultural differences we evaluate, for the first time in economics, linguistic micro-data about phonological and grammatical features of German dialects. These data are taken from a unique linguistic survey conducted between 1879 and 1888 in 45,000 schools. Matching this information to 439 current German regions, we construct a dialect similarity matrix. Using a gravity analysis, we show that current cross-regional migration is positively affected by historical dialect similarity. This suggests that cultural identities formed in the past still influence economic exchange today.
    Keywords: gravity, internal migration, culture, language, dialects, Germany
    JEL: R23 Z10 J61
    Date: 2010–02
  6. By: Gachassin, Marie; Najman, Boris; Raballand, Gael
    Abstract: Many investments in infrastructure are built on the belief that they will ineluctably lead to poverty reduction and income generation. This has entailed massive aid-financed projects in roads in developing countries. However, the lack of robust evaluations and a comprehensive theoretical framework could raise questions about current strategies in Sub-Saharan Africa. Using the second Cameroonian national household survey (Enquete Camerounaise Aupres des Menages II, 2001) and the Cameroon case study, this paper demonstrates that investing uniformly in tarred roads in Africa is likely to have a much lower impact on poverty than expected. Isolation from a tarred road is found to have no direct impact on consumption expenditures in Cameroon. The only impact is an indirect one in the access to labor activities. This paper reasserts the fact that access to roads is only one factor contributing to poverty reduction (and not necessarily the most important in many cases). Considering that increase in non-farming activities is the main driver for poverty reduction in rural Africa, the results contribute to the idea that emphasis on road investments should be given to locations where non-farming activities could be developed, which does mean that the last mile in rural areas probably should not be a road.
    Keywords: Transport Economics Policy&Planning,Rural Poverty Reduction,Regional Economic Development,Achieving Shared Growth
    Date: 2010–02–01
  7. By: Tu, Jiong (Human Resources and Skills Development Canada - Labour Program)
    Abstract: It has been well documented that immigrants' clustering of residence in large cities has been associated with the creation of a number of ethnic enclaves. The intensive exposure to own-ethnic population could affect immigrant labour market involvement positively or negatively. However, no extant Canadian research has provided empirical evidence on the sign of these enclave effects. In this paper, I use the 1981-2001 Censuses to estimate the impact of residence in ethnic enclaves on male immigrants' labour force participation rate and employment probability. For recent immigrants who arrived in Canada within the preceding ten years, the intensity of enclave residence is negatively associated with their labour force participation rate, but positively related to their employment probability in all censuses. However, living in an enclave has no significant effect on the labour force activity of older immigrants who have lived in Canada for more than twenty years. Since immigrants could be attracted to areas with more job opportunities and hence enlarge the size of an enclave, the estimated effects from probit regressions might be positively biased. I then use instrumental variable (IV) method to address this endogeneity problem, and the IV estimates are consistent with the probit regression results.
    Keywords: immigrant, ethnicity, enclave, labour force participation, employment, Canada
    JEL: F22 J15 J21 J61
    Date: 2010–02
  8. By: R Mohan; Shyjan D
    Abstract: The paper attempts to analyse the impact of devolution of taxes and distribution grants by the Centre to the States in India by taking fourteen major States for the time period 1980-81 to 2006-07. The study focuses on the impact of inter- State distribution of Central grants and taxes. Analysis reveals that formula based tax devolution has been more equalising than grants. Study finds that there is need to explore alternative mechanisms. [WP 419].
    Keywords: India, vertical and horizontal inmalance, finance commission, Gross Domestic Product, GDP, state, GSDP, service tax, indirect taxes, direct, central excise, revenue, devolution, taxes, grants, centre, states, distribution, taxes, devolution,
    Date: 2010

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