nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒07‒10
seven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Cohesion policy in the European Union: Growth, geography, institutions By Thomas Farole; Andrés Rodríguez-Pose; Michael Storper
  2. Testing the Validity of the Neoclassical Migration Model: Overall and Age-Group Specific Estimation Results for German Spatial Planning Regions By Mitze, Timo; Reinkowski, Janina
  3. Series enlazadas de empleo asalariado y rentas del trabajo regionales (RegDat versión 2.2) By Angel de la Fuente
  4. Regional Development for a Disastrous Country By Brata, Aloysius Gunadi
  5. Institutions for Asian Connectivity By Bhattacharyay, Biswa
  6. Geographical Heterogeneity in Homeownership Rates: Does the Differential between Rent and Ownership Cost Explain Local Variation in Homeownership Rates? By Tsukamoto, Satoshi
  7. The Identification of Sub-centres in Two Italian Metropolitan Areas: a Functional Approach By Paolo VENERI

  1. By: Thomas Farole (The World Bank); Andrés Rodríguez-Pose (IMDEA Ciencias Sociales); Michael Storper (London School of Economics)
    Abstract: Since the reform of the Structural Funds in 1989, the EU has made the principle of cohesion one of its key policies. Much of the language of European cohesion policy eschews the idea of tradeoffs between efficiency and equity, suggesting it is possible to maximise overall growth whilst also achieving continuous convergence in outcomes and productivity across Europe’s regions. Yet, given the rise in inter-regional disparities, it is unclear that cohesion policy has altered the pathway of development from what would have occurred in the absence of intervention. This paper draws on geographical economics, institutionalist social science, and endogenous growth theory, with the aim of providing a fresh look at cohesion policy. By highlighting a complex set of potential tradeoffs and inter-relations – overall growth and efficiency; inter-territorial equity; territorial democracy and governance capacities; and social equity within places – it revisits the rationale of cohesion policy, with particular attention to the geographical dynamics of economic development.
    Date: 2010–06–25
  2. By: Mitze, Timo; Reinkowski, Janina
    Abstract: This paper assess the empirical validity of the neoclassical migration model to predict German internal migration flows driven by regional labour market disparities. We estimate static and dynamic migration functions for 97 Spatial Planning Regions between 1996--2006 using key labour market signals including income and unemployment differences among a broader set of explanatory variables. Beside an aggregate specification we also estimate the model for age-group related subsamples. Our results give empirical support for the main transmission channels identified by the neoclassical framework: That is, regional differences in the real income show the expected effect on the net inmigration rate, while the link between regional unemployment rate differentials and net inmigration is negative. The results remains stable if further variables are added to the model. Net in-commuting shows a negative correlation with in-migration underlying the substitutive nature of the two variables. Moreover an increasing level of international competitiveness attracts further in-migration flows. We also find heterogeneity for different types of settlement structure and the East-West macro regions by including federal state level fixed effects or an East German dummy. The results broadly hold for age-group specific estimates. Here, the impact of labour market signals is tested to be of greatest magnitude for workforce relevant age-groups and especially young cohorts from 18 to 25 and 25 to 30 years. This latter result underlines the prominent role played by labour market conditions in determining internal migration rates of the working population in Germany.
    Keywords: German Internal Migration; Harris-Todaro Model; Dynamic Panel Data
    JEL: C31 C33 R23
    Date: 2010–06–02
  3. By: Angel de la Fuente
    Abstract: I construct "homogeneous" series of salaried employment, employee compensation and total labor income for Spain and its regions covering the period 1955-2008. I also estimate labor's share in regional and national GVA and construct an indicator of the average cost of labor including both employees and non-salaried workers.
    Keywords: Regional accounts, Spain, labor share
    JEL: E01 R11
    Date: 2010–06–28
  4. By: Brata, Aloysius Gunadi
    Abstract: The purpose of this paper is to explore the relationship between social and economic factors on the economic loss and number of victims of natural disaster occurring in Indonesia using a pooled data from 2004 to 2008 of all provinces. This study found income as measured by GDRP per capita have negative impact on the number of deaths as well as in the number of houses destroyed. It also suggests that the impact of natural disasters can be lowered by enhancing not only economic development but also human development. Therefore, regional development should consider both of developments in order to reduce the impact of natural disasters. Other important finding of this study is the positive impact of government expenditure on the disaster impact related to the number of deaths. It means that large local government expenditure will not guarantee the regions in reducing the impact of natural disasters. The positive impact of government size on the disaster impact is an interesting topic for a further study that may be related to other issue such corruption in the distribution of aid regarding disasters. The study also suggests that further research may use other appropriate indicator of human development in estimating the benefit of human quality in reducing the impact of natural disaster.
    Keywords: regional development; natural disaster; Indonesia
    JEL: O1 R1 Q54
    Date: 2010–06
  5. By: Bhattacharyay, Biswa (Asian Development Bank Institute)
    Abstract: To make Asia more economically sustainable and resilient against external shocks, regional economies need to be rebalanced toward regional demand- and trade-driven growth through increased regional connectivity. The effectiveness of connectivity depends on the quality of hard and soft infrastructure. Of particular importance in terms of soft infrastructure which makes hard infrastructure work are the facilitating institutions that support connectivity through appropriate policies, reforms, systems, and procedures and through promoting effective coordination and cooperation. Asia has many overlapping subregional institutions involved in national and regional energy, transport, and telecommunications infrastructure connectivity. However, these institutions are characterized as being less effective, informal, and lacking a clear and binding system of rules and policies. This paper draws linkages between connectivity, growth and development, governance, and institutions. It details the benefits the region could achieve by addressing needed connectivity enhancements and the connectivity and financing challenges it faces. In addition, it presents various institutional options for regional infrastructure financing. To build seamless Asian connectivity, Asia needs an effective, formal, and rules-based institutional framework. The paper presents a new institutional framework together with the organizational structures of two new regional institutional mechanisms, namely the Pan-Asian Infrastructure Forum and the Asian Infrastructure Fund.
    Keywords: asian infrastructure financing; asian infrastructure connectivity; asian institutions
    JEL: R10 R40 R42 R48 R50 R51 R58
    Date: 2010–06–24
  6. By: Tsukamoto, Satoshi
    Abstract: This paper focuses on differentials between rental and owner costs as a primary determinant of local homeownership. In simultaneous equations to estimate the separate effects of owner cost and rent on homeownership rates, the control variables are various household and geographical factors (Census 2000 tract level dataset), in the samples of 48 contiguous states within the United States. The results show negative effects of rental and owner costs on homeownership rates. Ethnicity, income, age, property tax rate and loan usage rates, contribute to increased owner costs. Several factors had significant association with the rise in housing prices before 2006.
    Keywords: Community/Rural/Urban Development, Consumer/Household Economics, Public Economics, D12, H0, R2,
    Date: 2010
  7. By: Paolo VENERI (Universita' Politecnica delle Marche, Dipartimento di Economia)
    Abstract: This work introduces a method aimed at the identification of metropolitan sub-centres. Instead of using traditional and static methodologies based on morphological approaches (e.g. employment density), interaction measures have been employed, based on the Central Place theoretical tradition. In particular, tools of social network analysis and a measure of productive completeness have been utilised, so as to take into account the capacity of sub-centres to organise their surrounding territory. The degree of node-centrality has been calculated using data about commuting for working reasons and the methodology has been applied to the metropolitan areas of Rome and Milan. Results have been compared with those obtained from the application of Giuliano and Small?s (1991) thresholds in jobs density and absolute employment and confirm the soundness of the proposed approach for Italian metropolitan areas.
    Keywords: metropolitan areas, polycentricity, sub-centres
    JEL: R10 R12 R14
    Date: 2010–07

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