nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒03‒06
seven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Spatial model selection and spatial knowledge spillovers: a regional view of Germany By Klarl, Torben
  2. Clustering, Spatial Correlations and Randomization Inference By Thomas Barrios; Rebecca Diamond; Guido W. Imbens; Michal Kolesar
  3. Statistical Analysis of the Relationship between Public Transport Accessibility and Flat Prices in Riga By Pavlyuk, Dmitry
  4. The Impact of Slum Resettlement on Urban Integration in Mumbai: The Case of the Chandivali Project By Damien Vaquier
  5. SMEs and Regional Economic Growth in Brazil By Túlio A. Cravo; Adrian Gourlay; Bettina Becker
  7. The impact of trade openness on regional inequality : the cases of India and Brazil By Marie Daumal

  1. By: Klarl, Torben
    Abstract: The aim of this paper is to introduce a new model selection mechanism for cross sectional spatial models. This method is more flexible than the approach proposed by Florax et al. (2003) since it controls for spatial dependence as well as for spatial heterogeneity. In particular, Bayesian and Maximum-Likelihood (ML) estimation methods are employed for model selection. Furthermore, higher order spatial influence is considered. The proposed method is then used to identify knowledge spillovers from German NUTS-2 regional data. One key result of the study is that spatial heterogeneity matters. Thus, robust estimation can be achieved by controlling for both phenomena. --
    Keywords: Spatial econometrics,Bayesian spatial econometrics,Spatial heterogeneity
    JEL: C11 C31 C52
    Date: 2010
  2. By: Thomas Barrios; Rebecca Diamond; Guido W. Imbens; Michal Kolesar
    Abstract: It is standard practice in empirical work to allow for clustering in the error covariance matrix if the explanatory variables of interest vary at a more aggregate level than the units of observation. Often, however, the structure of the error covariance matrix is more complex, with correlations varying in magnitude within clusters, and not vanishing between clusters. Here we explore the implications of such correlations for the actual and estimated precision of least squares estimators. We show that with equal sized clusters, if the covariate of interest is randomly assigned at the cluster level, only accounting for non-zero covariances at the cluster level, and ignoring correlations between clusters, leads to valid standard errors and confidence intervals. However, in many cases this may not suffice. For example, state policies exhibit substantial spatial correlations. As a result, ignoring spatial correlations in outcomes beyond that accounted for by the clustering at the state level, may well bias standard errors. We illustrate our findings using the 5% public use census data. Based on these results we recommend researchers assess the extent of spatial correlations in explanatory variables beyond state level clustering, and if such correlations are present, take into account spatial correlations beyond the clustering correlations typically accounted for.
    JEL: C01 C1 C31
    Date: 2010–02
  3. By: Pavlyuk, Dmitry
    Abstract: A relationship between public transport accessibility and residential land value is a point of interest of many recent researches. A hedonic price regression model, widely used in this research area, has one very important shortcoming – it calculates an "average" influence of factors on land value in the analysing area. Usually spatial effects present in data, and the influence of public transport accessibility can be distributed over the area non-uniformly. In this study we apply a comparatively new modification of the regression model – geographically weighted regression – to examine the relationship between public transport accessibility and residential land value (in a form of rent and sell prices) in Riga. The proposed method allows taking into account spatial effects present in the relationship. We use information about geographical locations of urban public transport stops and routes to calculate a level of transport accessibility. Together with the transport accessibility level and a common set of property-specific parameters (floor area, number of rooms, etc.) we consider additional hedonic properties of a flat location such as distances to supermarkets, higher schools and natural attractors like large parks, the river, and the seaside.
    Keywords: geographically weighted regression; hedonic price model; public transport accessibility
    JEL: L92 C21 C01
    Date: 2009–08–14
  4. By: Damien Vaquier
    Abstract: The sociological and economic impact of the shift to the new site of Chandivali, the availability and choice of employment being the key driver towards socio-economic urban integration is assessed.
    Keywords: sociological, economic, chandivali, Mumbai, employment, slums, urban, socio-economic, household survey, quantitative, public policies, labour market, infrastructure, ecological environment, family, city, metropolis, surat, gujarat, population, textile mills, Maharashtra, liberalization,
    Date: 2010
  5. By: Túlio A. Cravo (Dept of Economics, Loughborough University); Adrian Gourlay (Dept of Economics, Loughborough University); Bettina Becker (Dept of Economics, Loughborough University)
    Abstract: This paper examines the relationship between the Small and Medium Enterprise (SME) sector and economic growth for an annual panel of Brazilian states for the period 1985-2004. We investigate the importance of the relative size of the SME sector measured by the share of the SME employment in total formal employment and the level of human capital in SMEs measured by the average years of schooling of SME employees. The empirical results indicate that the relative importance of SMEs is negatively correlated with economic growth, a result that is consistent with previous studies examining developing countries. In addition, our results also show that human capital embodied in SMEs may be more important for economic growth than the relative size of the SME sector.
    Keywords: Firm size, market structure, economic growth, human capital.
    JEL: O1 O15 L1
    Date: 2010–01
  6. By: Maria De Paola; Vincenzo Scoppa (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: In this paper, using data from Italian local level governments for the years 1985- 2008, we investigate whether political competition affects the quality of elected politicians, as measured by using some ex-ante characteristics such as educational level and type of job held. We handle endogeneity problems through an instrumental variable approach using a variable which takes into account whether the previous legislature survived until the end of its legislative term as an instrument for political competition. Early termination increases political competition, without directly affecting the quality of candidates. Two Stage Least Square estimates support the assumption that political competition positively affects politician quality. Results are robust to different measures of political competition and to different specifications of the model.
    Keywords: Political Competition, Politicians, Political Selection
    JEL: D72 D78 J45
    Date: 2010–02
  7. By: Marie Daumal (Université Paris 8 Vincennes-Saint-Denis, Université Paris-Dauphine, LEDa, UMR DIAL)
    Abstract: Regional inequalities are large in India and Brazil and represent a development challenge. This paper aims to determine whether regional disparities are linked to countries’ trade openness. An annual indicator of regional inequalities is constructed for India over the period 1980-2003 and for Brazil over 1985-2003. Results from time series regressions show that Brazil’s trade openness contributes to the reduction in regional inequalities in Brazil. The opposite result is found for India. India’s trade openness is an important factor aggravating income inequality among Indian states. In both countries, the inflows of foreign direct investment are found to increase regional disparities. _________________________________ Dans les années 90, les inégalités régionales ont fortement augment´e en Inde. Les inégalités entre Etats brésiliens sont importantes et constituent un problème politique majeur pour la fédération brésilienne. En 1991, ces deux pays se sont progressivement ouverts au commerce international. L’objectif du papier est de déterminer s’il existe ou non un lien entre les inégalités régionales et l’ouverture commerciale dans les cas de l’Inde et du Brésil. J’ai construit un indicateur, l’index Gini, qui est une mesure des inégalités régionales, sur la période 1980-2004 pour l’Inde et sur la période 1985-2004 pour le Brésil. Cet indicateur des inégalités régionales est ensuite régressé sur divers déterminants dont l’ouverture commerciale des pays, en utilisant la technique des séries temporelles et des modèles vectoriels à correction d’erreur. Je trouve que l’ouverture commerciale de l’Inde a fortement aggravé les inégalités existant entre l’Inde du Nord, de plus en plus pauvre, et l’Inde du Sud de plus en plus riche. Or ces inégalités régionales croissantes sont maintenant une source de tension et de conflits au sein de la fédération indienne, les Etats du Sud ne voulant plus “payer” pour le Nord du pays. Au contraire, l’ouverture du Brésil semble avoir entraîné une diminution des inégalités entre Etats brésiliens.
    Keywords: Trade openness, regional inequality, India, Brazil, time series regression, Ouverture commerciale, inégalités régionales, Inde, Brésil, séries temporelles.
    JEL: F43 R11
    Date: 2010–02

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