nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒03‒20
twenty papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Technology adoption and club convergence By Alexiadis, Stilianos; Tomkins, Judith
  2. An analysis of the Graduate Labour Market in Finland: the impact of Spatial Agglomeration and Skill-Job Mismatches By Consoli, Davide; Vona , Francesco; Saarivirta, Toni
  3. Sub-national vulnerability measures:A spatial perspective By Don J. Webber; Stephanié Rossouw
  4. Learning Clusters as Drivers - A perspective on knowledge generation and learning processes within clusters By Bode, Alexander; Talmon l'Armee, Tobias
  5. Distance still matters: the information revolution in small business lending and the persistent role of location, 1993-2003 By Kenneth P. Brevoort; John A. Holmes; John D. Wolken
  6. On vector autoregressive modeling in space and time By Valter Di Giacinto
  7. Predicting the Geography of House Prices By Fingleton, Bernard
  8. Migration modelling in the New Economic Geography By Carmen CAMACHO
  9. Teacher Salaries and Teacher Unions: A Spatial Econometric Approach By Winters, John V
  10. Estimating Economic Regional Effects of Euro 2012 By Barbara Despiney; Waldemar Karpa
  12. RURAL DEVELOPMENT NETWORK AND TERRITORIAL COMPETITIVENESS By Popovic, Vesna; Katic, Branko; Zivanovic Miljkovic, Jelena
  14. Spatial and Regional Dimensions of Food Security in Zambia By Haggblade, Steven; Longabaugh, Steven; Tschirley, David L.

  1. By: Alexiadis, Stilianos; Tomkins, Judith
    Abstract: A model of regional convergence is developed in which the pattern of convergence is attributed to the rate of technological adoption across regions. If absorptive abilities vary across regions, convergence is constrained within a certain group of regions that share common structural characteristics. Whether regions exhibit a pattern of convergence depends on the degree to which infrastructure conditions are appropriate for the adoption of technological improvements. The model is tested using data for the NUTS-2 regions of the EU-27 during the time period 1995-2006. The results suggest that adoption of technology has a significant effect on regional growth patterns in Europe, and hence the analysis has important implications for the direction of regional policy in Europe.
    Keywords: Convergence-club; Technological Gap; European Regions
    JEL: O18 C21 R11
    Date: 2010–03–03
  2. By: Consoli, Davide; Vona , Francesco; Saarivirta, Toni
    Abstract: The recent history of Finland has been shaped by the rollercoaster of the 1990s when the economy went from deep recession to becoming among the most innovative and competitive within merely a decade. Economic recovery driven by the surge of ICT-related industries with the active support of the higher education system gave way also to growing inequalities among regions, especially within graduate workers. The paper elaborates an empirical analysis of the returns to education of a cohort entering the labour force between 1995 and 2005; our objective is to capture the extent of spatial and occupational determinants on income distribution as Finland slid from its most troubled to most prosperous times.
    Keywords: Regional Development; Earning Distribution; Education and Skills; Spatial Inequalities
    JEL: J31 E24 J24 O33 R11
    Date: 2010–02–28
  3. By: Don J. Webber (Department of Business Economics, Auckland University of Technology and Department of Economics, UWE, Bristol); Stephanié Rossouw (Department of Business Economics, Auckland University of Technology and Department of Economics)
    Abstract: Most empirical investigations into economic vulnerability focus on the national level. Although some recent contributions investigate vulnerability from a sub-national perspective they contribute to the literature in an aspatial manner, as they do not explicitly account for the relative locations of areas and for the potential of spillovers between contiguous areas. This paper extends the current literature on a number of important fronts. First, we augment a principle components model to take explicit account of spatial autocorrelation and apply it to South African magisterial district level data. Second, by comparing spatial and aspatial models estimates, our empirical results illustrate the presence and importance of spatial spillovers in local vulnerability index estimates. Third, we augment the methodology on the vulnerability intervention index and present results which highlight areas that are performing better and worse than would be expected. After accounting for spatial spillovers, the results illustrate a clear urban-rural vulnerability divide.
    Keywords: Economic vulnerability; Environmental vulnerability; Governance vulnerability; Demographic vulnerability; Health vulnerability
    JEL: R11 C21 I31
    Date: 2010–03
  4. By: Bode, Alexander; Talmon l'Armee, Tobias
    Date: 2009–10–13
  5. By: Kenneth P. Brevoort; John A. Holmes; John D. Wolken
    Abstract: In a seminal article on small business lending, Petersen & Rajan (2002) argue that technological changes have revolutionized small business lending markets, weakening the reliance of small businesses on local lenders and increasing geographic distances between firms and their credit suppliers. While their data only cover through 1993, they conjecture that the pace of change accelerated after 1993. Using the 1993, 1998, and 2003 Surveys of Small Business Finances (SSBFs), we test whether the distance changes identified by Petersen and Rajan continued or accelerated during the following decade. Using a novel application of Oaxaca-Blinder decomposition, we identify the extent to which specific observable characteristics are associated with distance changes and draw three conclusions. First, while distances increased between 1993 and 1998 at a faster rate than found by Petersen & Rajan, distance increases appear to have halted or possibly reversed between 1998 and 2003. Second, rather than increasing proportionally for all small firms, distance increases were uneven across firms over the decade, with higher credit quality firms and firms with more experienced ownership realizing greater gains in distance than other firms. Finally, distances increased faster at older firms and, regardless of firm age, increases in distance have only affected some product types, primarily those involving asset-back loans (including mortgages). For relationships that involved the provision of either lines of credit or multiple types of credit, distances increased very little or not at all during the decade. This analysis provides a detailed and nuanced view of how the market for small business credit has evolved during a period of rapid technological change.
    Date: 2010
  6. By: Valter Di Giacinto (Bank of Italy)
    Abstract: Despite the fact that it provides a potentially useful analytical tool, allowing for the joint modeling of dynamic interdependencies within a group of connected areas, until lately the VAR approach had received little attention in regional science and spatial economic analysis. This paper aims to contribute in this field by dealing with the issues of parameter identification and estimation and of structural impulse response analysis. In particular, there is a discussion of the adaptation of the recursive identification scheme (which represents one of the more common approaches in the time series VAR literature) to a space-time environment. Parameter estimation is subsequently based on the Full Information Maximum Likelihood (FIML) method, a standard approach in structural VAR analysis. As a convenient tool to summarize the information conveyed by regional dynamic multipliers with a specific emphasis on the scope of spatial spillover effects, a synthetic space-time impulse response function (STIR) is introduced, portraying average effects as a function of displacement in time and space. Asymptotic confidence bands for the STIR estimates are also derived from bootstrap estimates of the standard errors. Finally, to provide a basic illustration of the methodology, the paper presents an application of a simple bivariate fiscal model fitted to data for Italian NUTS 2 regions.
    Keywords: structural VAR model, spatial econometrics, identification, space-time impulse response analysis
    JEL: C32 C33 R10
    Date: 2010–02
  7. By: Fingleton, Bernard
    Abstract: Prediction is difficult. In this paper we use panel data methods to make reasonably accurate short term ex-post predictions of house prices across 353 local authority areas in England. The issue of prediction over the longer term is also addressed, and a simple method that makes use of the dynamics embodied in New Economic geography theory is suggested as a possible way to approach the problem.
    Keywords: new economic geography; real estate prices; spatial econometrics; panel data; prediction.
    JEL: O18 R12 C31 C21 R31
    Date: 2010–02
  8. By: Carmen CAMACHO (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: The benchmark of this paper is the Fujita and Thisse (2002) core-periphery model, which adds a R&D sector with skilled labor to create new varieties for the modern sector. The number of R&D firms increases not only with the number of existing patents and knowledge spillovers but also with the number of skilled workers who can migrate and choose theregion offering the better lifetime salary.The main objective of the present work is to analyse the long-term consequences of the choice of the migration law in Fujita and Thisse(2002)and in other comparable models. After describing throughoutly our benchmark,we introduce a different migration law ˆ la Krugman (1991).Although the change in the migration law implies that individuals do not foresee price changes and hence their choice is somehow less optimal, the steady state outcome does not vary qualitatively:the unique steady state is a symmetric distribution of labor across regions. Later we change the benchmark model to avoid the so called monotonic convergence hypothesis, about which we discuss at large in the paper. When we model the economy using Romer (1990) two sector model applied to two regions allowing for skilled migration, then there exists a solution path that converges to a steady state which exhibits a distribution of skilled workers amongst regions which is no longer symmetric. In effect, the new steady state depends on technology, fixed costs, knowledge spill-overs and transportation costs.
    Keywords: Economic geography,Spatial Dynamics, Migrations, Growth
    Date: 2010–02–15
  9. By: Winters, John V
    Abstract: This paper uses the Schools and Staffing Survey to examine the determinants of teacher salaries in the U.S. using a spatial econometric framework. These determinants include teacher salaries in nearby districts, union activity in the district, union activity in neighboring districts, and other school district characteristics. The results confirm that salaries for both experienced and beginning teachers are positively affected by salaries in nearby districts. Investigations of the determinants of teacher salaries that ignore this spatial relationship are likely to be mis-specified. Including the effects of union activity in neighboring districts, the study also finds that union activity increases salaries for experienced teachers by as much as 18-28 percent but increases salaries for beginning teachers by a considerably smaller amount.
    Keywords: Teacher salaries; Teacher unions; Spatial econometrics
    JEL: J45 J50
    Date: 2010–01–01
  10. By: Barbara Despiney (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Waldemar Karpa (ENSTA - Ecole Nationale Supérieure de Techniques Avancées ParisTech)
    Abstract: In 2007 Poland and Ukraine were awarded by UEFA to co-host the 2012 European Football Championships. This first "mega-event" to take place in the transition countries is commonly intended to yield large and lasting economic bebefits to the host cities. This point of view is rarely shared by economists, who are aware of misuse of economic impact estimates. In this paper, we modify the Keynesian-style multiplier model to investigate the effects of Euro 2012-related spending on local economies. Our goal is two-fold : on the one hand, we can easily investigate the impact on each demand component, on the other hand, we wish to calculate the magnitudes of these multipliers in order to judge the credibility of potential regional welfare benefits. This analysis is strenghtened by taking into account the regional supply constraints. Our study also reviews the existent body of work on mega-sporting events and our results are in line with those researches who argue that the true economic impact of these competitions is overestimated by a large margin. Finally, we stress the organizational and institutional dimension of hosting a "mega-event" by the transition and developing countries that are constantly struggled to tackle the colossal tasks of upgrading stadiums and modernizing airports, rail and road networks and hotels.
    Keywords: Transition, sport economics, Economic impact, mega-events.
    Date: 2010–01
  11. By: Randall, Alan
    Keywords: Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development,
    Date: 2009–12
  12. By: Popovic, Vesna; Katic, Branko; Zivanovic Miljkovic, Jelena
    Abstract: In this paper, as a case-study, the authors examine development potentials and capacity building of local actors in one of the future NUTS III regions of Serbia, functional region KolubaraâMaÄva-Podrinje, that encompass 14 municipalities of Kolubara and MaÄva districts. The results of the situation analysis, including SWOT matrix, indicate local actorsâ animation and its regional networking as one of the basic factors of territorial development.
    Keywords: Territorial competitiveness, Rural networking, Capacity of local actors, Rural development support, KolubaraâMaÄva-Podrinje region, Agribusiness, Community/Rural/Urban Development, International Development,
    Date: 2009–12
  13. By: Messely, Lies; Dessein, Joost; Lauwers, Ludwig
    Abstract: Within the globalizing world, regions and their identities are subjected to great pressure. At present, places are engaged in a process of âterritorial competitionâ in an integrated world economy. The identity of the region can be used as a starting point to brand a region and differentiate it from others. In the regional branding process, the region as a whole becomes a product or brand and offers a âbasketâ of regional products and services. This paper discusses the possibility of regional identity as a mobilizing force for rural development, by studying best practice examples of regional branding. Using the grounded theory approach, we conducted interviews in three case regions: West Cork (Ireland), Groene Woud (the Netherlands) and Pajottenland (Belgium). The study of these cases led to the formulation of critical success factors on the organization of regional branding.
    Keywords: Identity, Region formation, Regional branding, Rural development, Agribusiness, Community/Rural/Urban Development, International Development,
    Date: 2009–12
  14. By: Haggblade, Steven; Longabaugh, Steven; Tschirley, David L.
    Abstract: Zambiaâs population clusters tightly in cities along the north-south line of rail and in the primarily rural areas of Eastern Province (Figure 1). Staple food consumption and purchases are similarly concentrated in these heavily populated clusters (Figures 4 and 5). Across the border, several high-density population centers lie close to the Zambian border â in the copperbelt cities of southern DRC, in the highlands of southern Tanzania, in Malawi and in Zimbabwe (Figure 2). This results in sizeable potential food markets for Zambian farmers across the border in southern DRC and, intermittently, in Zimbabwe and Malawi. Zambiaâs staple food production and sales likewise cluster spatially in three main areas: along the line of rail, in the large commercial farming blocks of north-central Zambia, and to a lesser extent in Eastern Province (Figure 6). This spatial clustering offers opportunities for Zambia to benefit from regional trade in food staples. In normal and good harvest years, significant export potential exists in matching the large cereal-producing blocks in north-central Zambia with the nearby copperbelt cities of both Zambia and DRC. Conversely, in years of domestic shortfall, significant import supplies may be available from cross-border farmers and traders in southern Tanzania, northern Mozambique and, in time, Zimbabwe. If Zambian farmers are to invest in the productive capacity necessary to serve these external markets, they will require consistent and predictable trade policies. Figure 1.
    Keywords: Zambia, food security, Africa, staple food production, Agricultural and Food Policy, Community/Rural/Urban Development, Food Security and Poverty, International Relations/Trade, q18, q13, q17,
    Date: 2010–02
  15. By: Balamou, Eudokia; Saktina, Daina; Meyers H., William
    Keywords: lagging rural areas, bi-regional CGE model, rural development policy, CAP, Agribusiness, Environmental Economics and Policy, Land Economics/Use,
    Date: 2009–12
  16. By: Idda, Lorenzo; Furesi, Roberto; Pulina, Pietro
    Abstract: This paper is designed to verify empirically the choices that Italian farm households make when investing in human capital. Census data from the National Institute of Statistics (Istat) were used to describe the main structural and organisational characteristics of the farms. Multivariate statistical tools were used to process the information in the database, so that the different types of Italian farm households could be defined and geographically located. The results allowed us to analyse the competence endowment inside the family farm by determining the existence, the types and the strength of the relationships between the characteristics of family farms and certain variables which described the specific local environment and the human capital available to the family. At the end of the paper we make some suggestions for norms which may be of value to policy makers.
    Keywords: Human capital, Household farms, Agricultural labour, Spatial analysis, Agribusiness, Community/Rural/Urban Development, Labor and Human Capital,
    Date: 2009–12
  17. By: Simonovic, Zoran; Simonovic, Dragoljub; Gligic, Perica
    Abstract: Process of transition movements in Republic of Sebia is in progress. Transition movements have not bypassed agrarian sector. Market agriculture should gain significance along this process. On this occasion we would like to emphasis two elements which affect development of Market Agriculture. Those are regionalization and specialization of agriculture. In study about agrarian regions in conditions of transition two charts are given, that pinpoint the essence of natural foundation and market opportunities in transition circumstances. Study of agro-identities starts with introspection of each reagion in respect of its natural values: plain (Vojvodina), hilly ( Sumadija), mountain-hilly (Pester). Therefore, plain region is specialized for production of stable livestocking (cattle and hogs), mountain-hilly is based on pasture (sheep and cattle) etc. Regional disposition of some types of livestocking is limited by natural conditions and structure of agricultural area. Essentially, the level of livestock farming has been determined by economic progress of the region and Market development. The certain other regions are specialized in viticulture, fruit-growing or vegetable growing (vicinity of big cities). In time of transition, i.e. transferring to Market Agriculture, issue of regional identity has become more actual than ever. This could be best illustrated on the example of forming specialized cooperatives, agricultural markets and companies (plum and apple production and other agricultural cropping) spread throughout particular areas of Serbia.
    Keywords: Agrarian regions, Regionalization, Specialization, Agribusiness, Community/Rural/Urban Development, International Development,
    Date: 2009–12
  18. By: Cobanovic, Katarina; Nikolic-Doric, Emilija; Mutavdzic, Beba
    Abstract: In the present research the analysis of the level of national income in agriculture was done for different districts and municipalities of the Province of Vojvodina. The analysis of the achieved level of national income in agriculture in function of the most important factors was performed on the base of classical form the traditional non-linear regression model of Cobb-Douglas production function with labour and capital as predictors and on the extended form of Cobb-Douglas function which in addition includes the arable areas.
    Keywords: National income in agriculture, Cobb-Douglas production function, investments in agriculture, agricultural population, Agribusiness, Agricultural Finance, Community/Rural/Urban Development,
    Date: 2009–12
  19. By: Conto, Francesco; La Sala, Piermichele; Papapietro, Paolo
    Abstract: The aim of this research is to find a concrete construction methodology of the Metapontum Agro - food district by three main phases: awaking of the operators and the institutional stakeholders (got together in the districtâs local web); economicterritorial analysis; experimentation. This last phase will be the final step of the project, i.e. creation of the Development Centre - Formative laboratory, where both new methodologies of servicesâ spreading on enterprises and new methodologies of formation-information for operators and new potential entrepreneurs will be tested. This new methodology, based on the Learning Organization, set in the usual âdistrict approachâ to the local development, will employ information technology, solutions regarding the economic and the agricultural field, as well as training of human resources; this will follow the PSR 2007 â 2013 of Basilicata Region and the rural development program (PIT for the district). Therefore, after the analysis to identify the territorial organization of local development we can plan the new model of district, beginning from integrated supply chain. This will facilitate the construction of a Society of District - Service Center can organize territorially local development and to optimize the planned investments from financial instruments offered by the PSR, to provide horizontal services (training, promotion, internationalization, etc.) to member companies to increase efficiency of management effectiveness. In this context, based on the development of knowledge and ability to do business, underpinning the organization of the Center to ensure improved outcomes for companies and local business.
    Keywords: The Metapontum Agro-food district of quality, Concrete construction methodology of agro - food district, Creation of the shop of development, Formative laboratory, Information technology training of human resources solutions, Rural Development Program, Agribusiness, Community/Rural/Urban Development, Labor and Human Capital, Teaching/Communication/Extension/Profession,
    Date: 2009–12
  20. By: Bronisz, Urszula; Heijman, Wim
    Abstract: This article aims at presenting different approaches to the phenomenon of social capital. The concept of social capital is ambiguous and that is why we will highlight a number of definitions of this notion. The central attention of the paper focuses on the relationship between social capital and regional development and competitiveness. The fundamental question concerns the impact of social capital on the regional economic performance. Hence, we will survey the empirical examination of 16 Polish regions in terms of social capital. We will also study whether the regional level of social capital depends on the level of competitiveness. The purpose of this article is also to make a contribution to the discussion concerning the relationship between economic development and social capital.
    Keywords: Social capital, Regional growth, Polish regions, Community/Rural/Urban Development, International Development, Labor and Human Capital,
    Date: 2009–12

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