nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒08‒21
five papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Concentration, Diversity, and Manufacturing Performance By Joshua Drucker
  2. The Spatial Diffusion of a Knowledge Base-Laser Technology Research in West Germany, 1960-2005 By Michael Fritsch; Luis F. Medrano
  3. The ‘Trade-off’ between Spatial Equity and Economic Efficiency Revisited: Evidence from the US States By Alexiadis, Stilianos; Eleftheriou, Konstantinos
  4. The French Regions’ Borrowing Behaviours. How heterogeneous are they? By Dufrénot, G.; Frouté, P.; Schalck, C.
  5. Valuing travel time variability: Characteristics of the travel time distribution on an urban road By Fosgerau, Mogens; Fukuda, Daisuke

  1. By: Joshua Drucker
    Abstract: Regional economist Benjamin Chinitz was one of the most successful proponents of the idea that regional industrial structure is an important determinant of economic performance. His influential article in the American Economic Review in 1961 prompted substantial research measuring industrial structure at the regional scale and examining its relationships to economic outcomes. A considerable portion of this work operationalized the concept of regional industrial structure as sectoral diversity, the degree to which the composition of an economy is spread across heterogeneous activities. Diversity is a relatively simple construct to measure and interpret, but does not capture the implications of Chinitz’s ideas fully. The structure within regional industries may also influence the performance of business enterprises. In particular, regional intra-industry concentration—the extent to which an industry is dominated by a few relatively large firms in a locality—has not appeared in empirical work studying economic performance apart from individual case studies, principally because accurately measuring concentration within a regional industry requires firm-level information. Multiple establishments of varying sizes in a given locality may be part of the same firm. Therefore, secondary data sources on establishment size distributions (such as County Business Patterns or aggregated information from the Census of Manufactures) can yield only deceptive portrayals of the level of regional industrial concentration. This paper uses the Longitudinal Research Database, a confidential establishment-level dataset compiled by the United States Census Bureau, to compare the influences of industrial diversity and intra-industry concentration upon regional and firm-level economic outcomes. Manufacturing establishments are aggregated into firms and several indicators of regional industrial concentration are calculated at multiple levels of industrial aggregation. These concentration indicators, along with a regional sectoral diversity measure, are related to employment change over time and incorporated into plant productivity estimations, in order to examine and distinguish the relationships between the differing aspects of regional industrial structure and economic performance. A better understanding of the particular links between regional industrial structure and economic performance can be used to improve economic development planning efforts. With continuing economic restructuring and associated workforce dislocation in the United States and worldwide, industrial concentration and over-specialization are separate mechanisms by which regions may “lock in” to particular competencies and limit the capacity to adjust quickly and efficiently to changing markets and technologies. The most appropriate and effective policies for improving economic adaptability should reflect the structural characteristics that limit flexibility. This paper gauges the consequences of distinct facets of regional industrial structure, adding new depth to the study of regional industries by economic development planners and researchers.
    Date: 2010–07
  2. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Luis F. Medrano (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We analyze the spatial diffusion of knowledge in laser technology in West Germany from 1960, when this technology began, until 2005. Laser technology research has been nearly exclusively conducted in regions that are home to a university with a physics or electrical engineering department, an indication of the science-based character of the technology. Early adoption of laser knowledge was especially prevalent in large agglomerations. While we cannot detect knowledge spillovers from adjacent regions, geographic proximity to the center of initial laser research was conducive to early adoption of laser research; however, the effect is small. The earlier a region embarked on this type of research, the higher the level of laser research later, indicating the accumulation of knowledge generated in previous periods. Our results highlight the role of a region's absorptive capacity for commencing and conducting research in a new technological field. In the case of laser technology, it was more the level of existing tacit knowledge than an interregional transfer of tacit knowledge that played an important role.
    Keywords: Innovation, regional innovation systems, knowledge, spatial diffusion, laser technology
    JEL: R11 O33 O52
    Date: 2010–08–04
  3. By: Alexiadis, Stilianos; Eleftheriou, Konstantinos
    Abstract: The principle aims of regional policy can be encapsulated in terms of ‘spatial equity’ and ‘economic efficiency’. Establishing the relation between these two aims is of fundamental importance. Conventionally, however, it is assumed that there is a conflict or a ‘trade-off’ between them. In this paper, a hopeful view, i.e. that the two aims are complementary rather than competitive, is put forward. The validity of this view is examined empirically using data for the US States covering the period 1972-2005. The obtained results map an instructive framework for regional policy where the scope for reducing regional inequalities is not incompatible with improvements in economic efficiency.
    Keywords: regional growth; regional policy; spatial equity; trade-off
    JEL: R58 R11
    Date: 2010–08–11
  4. By: Dufrénot, G.; Frouté, P.; Schalck, C.
    Abstract: This paper provides empirical evidence of the heterogeneous borrowing behaviours of French regions, despite a common accountability constraint that forces them to balance their budget and to borrow only to finance investment expenditure (golden rule). To this end, we use a quantile regression analysis covering the period from 1999 to 2007. The heterogeneity is very pronounced when the regions face a negative shock on debt, for instance a tightening of financial conditions. We explain our findings as a consequence of the fact that the Golden rule can be thought of as a “soft” rule if some local administrations believe that a financial rescue from the central government is automatic (as the regions receive transfers from the later). In this case, some regions find it advantageous to consider borrowing as an adjustment variable when taking their budgetary decisions.
    Keywords: Regional Borrowing, Quantile Regressions, Golden Rule.
    JEL: H74 E62 K34 R5
    Date: 2010
  5. By: Fosgerau, Mogens; Fukuda, Daisuke
    Abstract: Fosgerau and Karlstrom [The value of reliability. Transportation Research Part B, Vol. 43 (8–9), pp. 813–820, 2010] presented a derivation of the value of travel time variability (VTTV) with a number of desirable properties. This definition of the VTTV depends on certain properties of the distribution of random travel times that require empirical verification. This paper therefore provides a detailed empirical investigation of the distribution of travel times on an urban road. Applying a range of nonparametric statistical techniques to data giving minute-by-minute travel times for a congested urban road over a period of five months, we show that the standardized travel time is roughly independent of the time of day as required by the theory. Except for the extreme right tail, a stable distribution seems to fit the data well. The travel time distributions on consecutive links seem to share a common stability parameter such that the travel time distribution for a sequence of links is also a stable distribution. The parameters of the travel time distribution for a sequence of links can then be derived analytically from the link level distributions.
    Keywords: value of travel time variability; travel time distribution; nonparametrics; stable distributions;
    JEL: R41
    Date: 2010

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