nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒07‒03
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. On spatial equilibria in a social interaction model By Pierre M. Picard; Pascal Mossay
  2. Spanish Regional Unemployment Revisited: The Role of Capital Accumulation By Bande, Roberto; Karanassou, Marika
  3. Agglomeration processes in ageing societies By Theresa Grafeneder-Weissteiner; Klaus Prettner
  4. Regional Development in Kazakhstan By Kseniia Ursulenko
  5. Inference Based on Alternative Bootstrapping Methods in Spatial Models with an Application to County Income Growth in the United States By Daniel C. Monchuk; Dermot J. Hayes; John Miranowski; Dayton M. Lambert
  6. Spatial Architecture of the Production Networks in Southeast Asia By Tomohiro MACHIKITA; Yasushi UEKI
  7. Sequential city growth: empirical evidence By David Cuberes
  8. Fragmentation in East Asia: Further Evidence By Dr. Mitsuyo ANDO; Dr. Fukunari Kimura
  9. Open source GIS based strategies for firms: a spatial analysis application to the inland terminal of Livorno By Filippo Randelli
  10. Regional growth in Portugal: assessing the contribution of earnings and education inequality By Adelaide Duarte; Marta Simões
  11. From Russia with Love: The Impact of Relocated Firms on Incumbent Survival By Oliver Falck; Christina Guenther; Stephan Heblich; William R. Kerr
  12. Spatial density, average prices and price dispersion. Evidence from the Spanish hotel industry By Jacint Balaguer Coll; José C. Pernías
  13. Emergence and Development of Industry Clusters in Hungary : Searching for a 'Critical Mass' of Business via Cluster Mapping By Szanyi, Miklós; Iwasaki, Ichiro; Csizmadia, Péter; Illéssy, Miklós; Makó, Csaba
  14. Trade and regional inequality By Rodriguez-Pose, Andres
  15. Il costo della vita al Nord e al Sud d'Italia dal dopoguerra a oggi. Stime di prima generazione. By Amendola, Nicola; Vecchi , Giovanni; Al Kiswani , Bilal
  16. El aporte de la ruralidad al desarrollo By Pisani, Elena

  1. By: Pierre M. Picard (University of Manchester); Pascal Mossay (Universidad de Alicante)
    Abstract: Social interactions are at the essence of societies and explain the gathering of individuals in villages, agglomerations, or cities. We study the emergence of multiple agglomerations as resulting from the interplay between spatial interaction externalities and competition in the land market. We show that the geographical nature of the residential space tremendously affects the properties of spatial equilibria. In particular, when agents locate on an open land strip (line segment), a single city emerges in equilibrium. In contrast, when the spatial economy extends along a closed land strip (circumference), multiple equilibria with odd numbers of cities arise. Spatial equilibrium configurations involve a high degree of spatial symmetry in terms of city size and location, and can be Pareto-ranked.
    Keywords: social interaction, multiple agglomerations, spatial economy.
    JEL: R10 R12 R13
    Date: 2010–03
  2. By: Bande, Roberto (University of Santiago de Compostela, Spain); Karanassou, Marika (University of London)
    Abstract: This paper provides new evidence for the evolution of regional unemployment rates in Spain over the 1980-2000 period. We argue that interactive dynamic systems of labour demand, wage setting, and labour force equations (i) allow for a richer interpretation of regional disparities, and (ii) can capture the unemployment effects of growing variables such as capital stock. After classifying the 17 Spanish regions into high and low unemployment groups using kernel and cluster techniques, we estimate a structural labour market model for each group and evaluate the unemployment contributions of investment, benefits, taxes, and the oil price. We find that the main driving force of regional unemployment swings is capital accumulation.
    Keywords: regional unemployment, disparities, capital accummulation, kernel, cluster
    JEL: R23 J64
    Date: 2010–06
  3. By: Theresa Grafeneder-Weissteiner; Klaus Prettner
    Abstract: This article investigates agglomeration processes in ageing societies by introducing an overlapping generation structure into a New Economic Geography model. Whether higher economic integration leads to spatial concentration of economic activity crucially hinges on the economies' demographic properties. While population aging as represented by declining birth rates strengthens agglomeration processes, declining mortality rates weaken them. This is due to the fact that we allow for nonconstant population size. In particular, we show that population growth acts as an important dispersion force that augments the distributional effects on agglomeration processes resulting from the turnover of generations.
    Keywords: Agglomeration; Population Aging; Population
    Date: 2010–06
  4. By: Kseniia Ursulenko (Osteuropa-Institut, Regensburg (Institut for East European Studies))
    Abstract: This paper presents an overview of Kazakhstan’s regional development based on a description of principal economic and social indicators. The focus is on administratively defined regions (oblasts) of Kazakhstan. The main goal pursued in this report is to examine specific features of socio-economic development in particular regions of the country
    Date: 2010–06
  5. By: Daniel C. Monchuk; Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI)); John Miranowski; Dayton M. Lambert
    Abstract: This study examines aggregate county income growth across the 48 contiguous states from 1990 to 2005. To control for endogeneity we estimate a two-stage spatial error model and infer parameter significance by implementing a number of spatial bootstrap algorithms. We find that outdoor recreation and natural amenities favor positive growth in rural counties, densely populated rural areas enjoy stronger growth, and property taxes correlate negatively with rural growth. We also compare estimates from the aggregate county income growth model with per capita income growth and find that these two growth processes can be quite different.
    Keywords: county income growth, rural development, spatial bootstrapping.
    JEL: O18 R11 R58
    Date: 2010–05
  6. By: Tomohiro MACHIKITA (Inter-disciplinary Studies Center, Japan External Trade Organization); Yasushi UEKI (Bangkok Research Centre- Japan External Trade Organization, Thailand)
    Abstract: The main purpose of this paper is to provide empirical evidence on the inter-firm production networks in Southeast Asian developing economies. Using firm-level data obtained from a questionnaire survey of manufacturing firms in Indonesia, the Philippines, Thailand, and Vietnam in 2008, this paper presents the regional distribution of main customers and suppliers and their geographical proximity. Firm-level capabilities and transaction costs associated with specific inter-firm relationships would influence the distances between customers and suppliers. Ordered logistic estimations are carried out to examine factors affecting the spatial architecture of the production networks in the region.
    Date: 2010–02–01
  7. By: David Cuberes (Dpto. Fundamentos del Análisis Económico)
    Abstract: Using two comprehensive datasets on population of cities (1800-2000) and metropolitan areas (1960-2000) for a large set of countries, I present three new empirical facts about the evolution of city growth. First, the distribution of cities growth rates is skewed to the right in most countries and decades. Second, within a country, the average rank of each decade's fastest growing cities tends to increase over time. Finally, this rank grows faster in periods of rapid growth in urban population. These facts can be interpreted as evidence in favor of the idea that urban agglomerations have historically grown following a sequential growth pattern: within a country, the initially largest city is the first one to grow rapidly for some years. At some point, the growth rate of this city slows down and the second largest city is then the fastest-growing one. Eventually, the third largest city starts growing fast as the two largest cities slow down, and so on.
    Keywords: City growth, increasing returns, congestion costs, urbanization, Gibrat's Law
    JEL: O14 O33 O57
    Date: 2010–03
  8. By: Dr. Mitsuyo ANDO (Faculty of Business and Commerce, Keio University, Japan); Dr. Fukunari Kimura (Faculty of Economics, Keio University, Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: This paper analyzes the spatial pattern of production/distribution networks in East Asia. Two issues are investigated. The one is how the formation of networks has changed the intra- and inter-regional trade pattern. We find that an explosive expansion of intra-regional trade in machinery parts and components, in particular among developing countries, contributes to the current dense networking. The other is how corporate firms effectively organize fragmentation in terms of geographical distance and disintegration. The micro data of Japanese firms indicate that long-distance transactions are mainly intra-firm while transactions in local markets are predominantly arm’s-length (inter-firm), suggesting the formation of agglomeration.
    Date: 2009–10–01
  9. By: Filippo Randelli (Diparimento di Scienze Economiche, Università degli Studi di Firenze)
    Abstract: The paper explores the use of open source geographic information system (GIS) applied to firms. Most data available in a company have a spatial dimension and even decisions in marketing and management often have a spatial dimension. The paper is focus on illustrating the variegated opportunities for an open source GIS based strategy for firms. We argue that open source GIS are today as good as its proprietary competitors, and under certain circumstances, they are a superior alternative to their proprietary counterparts. A GIS based strategy for firms, as any other new application of geographical knowledge, it is a prospect of a new area for geography studies. This paper can be considered an initial essay on the role that geographers can play in spatial analysis applied to business strategy. The application is an example of applied geography supporting firm strategies and it has the purpose to identify spatial customer potentials for a specific infrastructure, the inland terminal of Guasticce (Italy).
    Keywords: spatial analysis, open source, Geographic Information System (GIS), geography, inland port
    JEL: R00 R40
    Date: 2010
  10. By: Adelaide Duarte (GEMF/Faculdade de Economia, Universidade de Coimbra, Portugal); Marta Simões (GEMF/Faculdade de Economia, Universidade de Coimbra, Portugal)
    Abstract: Regional economic growth in Portugal has mainly been studied from the perspective of convergence with data ending by the early 2000’s. The country as a whole has stopped converging to the output levels of the richest European countries by this period and has also become one of the most unequal EU member-states in terms of income distribution in the meantime. It is thus important to analyze the growth performance at the regional level in a more recent period, 1995-2007, emphasizing regional disparities in inequality as explanatory factors. This study examines the relationship between inequality and regional growth in Portugal at NUTS III level exploring the explanatory power of earnings and education inequality measures computed with data from the Quadros de Pessoal database. The results point to a positive relationship between initial inequality and regional growth, stronger for education than for earnings inequality, but with earnings inequality measures revealing a higher explanatory power. Moreover, there is evidence that it is inequality at the top of the distribution that is the relevant to explain regional growth, a result that reinforces the higher propensities to save of the richer and the incentives mechanisms of transmission from inequality to growth. Additionally, the evidence does not support the existence of convergence among Portuguese NUTS III regions during the period under analysis. These findings are robust to the introduction of most additional control variables and the consideration of alternative measures of earnings and education inequality.
    Keywords: regional growth, Portugal, earnings inequality, education inequality
    Date: 2010–06
  11. By: Oliver Falck (Ifo Institute for Economic Research at the University of Munich); Christina Guenther (Max Planck Institute of Economics, Evolutionary Economics Group; WHU- Otto Beisheim School of Management); Stephan Heblich (Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group); William R. Kerr (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.
    Keywords: Agglomeration, competition, firm dynamics, labor, Germany
    JEL: R10 L10 H25 O10 J20
    Date: 2010–06
  12. By: Jacint Balaguer Coll (Universitat Jaume I); José C. Pernías (Dpto. de Economía)
    Abstract: Based on the assumption that location is especially relevant in the lodging industry, we exploit a dataset of Spanish hotels to examine the relationship between spatial competition and retail price level and dispersion. Our results support the hypothesis that a greater density of competitors implies both a lower level and less dispersion of retail prices. We find that close competitors, in terms of hotel category and distance, have a stronger effect on price setting behavior. Moreover, we report weak evidence that the relationship between spatial competition and price level depends on whether the day considered belongs to the midweek or the weekend. Therefore, variation in the type of consumers seems to play quite an important role in explaining the relationship. Partiendo del supuesto de que la localización es especialmente relevante para el sector del alojamiento, utilizamos una base de datos de hoteles españoles para examinar la relación entre competencia espacial y el nivel y la dispersión de los precios de las habitaciones. Nuestros resultados confirman la hipótesis de que una mayor densidad de competidores implica niveles de precios menores y menor dispersión de precios. Los competidores cercanos, ya lo sean en términos de categoría hotelera como de distancia, tienen una mayor influencia sobre la fijación de precios. Adicionalmente, encontramos evidencia débil acerca de que la relación entre competencia espacial y el nivel de precios depende de si el día considerado es laborable o corresponde al fin de semana. Por tanto, las variaciones en el tipo de consumidores parecen tener un papel importante en la explicación de esta relación.
    Keywords: Nivel de precios, dispersión de precios, competencia espacial, sector hotelero. Price level, price dispersion, spatial competition, hotel industry
    JEL: L11 L81 D43
    Date: 2010–04
  13. By: Szanyi, Miklós; Iwasaki, Ichiro; Csizmadia, Péter; Illéssy, Miklós; Makó, Csaba
    Abstract: In the epoch of globalization, small or medium-sized national companies have great difficulties in finding an appropriate place for themselves in global labor division systems. They most frequently apply either strategies that help them becoming part of global value chains as regular suppliers, or they try to locate in which they might cooperate with other small companies in industrial clusters to compete with larger multinational companies. In both cases, communication, knowledge transfer, and cooperative actions among companies are essential for improving competitive capacities. Since this type of cooperation relies heavily on close, regular contact and face-to-face interaction, the spatial concentration of actors can improve the chances for success. Literature on the topic of supplier networks and spillover effects, as well as that on industrial clusters, emphasizes the importance of a "critical mass" of companies and other organizations and institutions. The authors first define and describe the types of synergies that stem from co-location of cooperating market actors. In addition the potential linkages among the two types of networks, supplier chains and clusters are explained. After a brief overview of the related literature, the authors introduce a new, refined measurement method of spatial concentration with empirical survey results from Hungary.
    Keywords: industry cluster, supplier network, foreign direct investment, Hungary
    JEL: D24 F23 L14 L16 P23 R12
    Date: 2010–05
  14. By: Rodriguez-Pose, Andres
    Abstract: This paper examines the relationship between openness and within-country regional inequality across 28 countries over the period 1975-2005, paying special attention to whether increases in global trade affect the developed and developing world differently. Using a combination of static and dynamic panel data analysis, we find that while increases in trade per se do not lead to greater territorial polarization, in combination with certain country-specific conditions, trade has a positive and significant association with regional inequality. In particular, states with higher inter-regional differences in sector endowments, a lower share of government expenditure, and a combination of high internal transaction costs with a higher degree of coincidence between the regional income distribution and regional foreign market access positions have experienced the greatest rise in territorial inequality when exposed to greater trade flows. This means that changes in trade regimes have had a more polarizing effect in low and middle-income countries, whose structural features tend to potentiate the trade effect and whose levels of internal spatial inequality are, on average, significantly higher than in high-income countries.
    Keywords: Economic Theory&Research,Regional Economic Development,Free Trade,Trade Policy,Emerging Markets
    Date: 2010–06–01
  15. By: Amendola, Nicola; Vecchi , Giovanni; Al Kiswani , Bilal
    Abstract: Despite the fact that in 2011 Italy will celebrate the 150th anniversary of its political unification, geographical disparities stand out as a prominent characteristic of the country. The paper estimates the trend of the cost-of-living differentials across regions in the half-century after the Second World War. We find that the North-South gap has steadily increased, from 10 percent in 1951 to almost 20 percent in recent years. The divergence in prices highlights the delay, possibly the failure, of Italy’s economic integration. Its cost, in terms of both foregone economic growth and distributive equity, is borne by the entire Italian society.
    Keywords: purchasing power parity; cost-of-living index; living standard; Balassa-Samuelson effect; economic integration.
    JEL: R10 E31 N94 N34 N14
    Date: 2010–06–23
  16. By: Pisani, Elena
    Abstract: A recent transition in the field of agrarian economics theory is that of a move away from a narrow agricultural sector approach to rural development, to one which adopts broader territorial approaches. This passage seeks to interpret the interactions between urban and rural worlds in a more comprehensive manner. This relatively new theoretical perspective is of particular interest to academics and politicians in Latin American countries where, since the mid 1990s, the concept of new rurality has been seen as the source of a new approach to rural development. The purpose of this research is to clarify the analytical signposts, identify the differences between sectoral and territorial approaches in fostering rural development policies, and place the new rurality theme in the context of heterogeneous rural economies. This approach has been applied to the Maule Region in Chile, where a strong agrarian economy co-exists with a weak rurality. A cluster analysis was applied to delineate homogeneous territorial aggregations, with the objective of proposing rural development policies.
    Keywords: Sectoral development; Territorial development; Rural development; New rurality; Chile
    JEL: R58 O18 O54 Q01
    Date: 2010–03–30

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