nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒09‒18
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Transversality and Transition: Branching to New Regional Path Dependence By Philip Cooke
  2. Locational signaling and agglomeration By Berliant, Marcus; Yu, Chia-Ming
  3. Why are East Germans not More Mobile? Analyzing the Impact of Social Ties on Regional Migration By P. Bönisch; Lutz Schneider
  4. "Exaggerated Death of Distance, Revisiting Distance Effects on Regional Price Dispersions" By Kazuko Kano; Takashi Kano; Kazutaka Takechi
  5. Regional Beveridge Curves: A Latent Variable Approach By Robert Dixon; G. C. Lim; John Freebairn
  6. Urban governance and planning for Economic growth By Baafi Antwi, Joseph; Oppong Kwakye, Francis
  7. Trajectories in Physical Space out of Communications in Acquaintance Space: An Agent-Based Model of a Textile Industrial District By Fioretti, Guido
  8. El nuevo sistema de financiación regional: Un análisis crítico y proyecciones para 2009 By Angel de la Fuente
  9. Series anuales de algunos agregados económicos y demográficos regionales, 1955-2009 (RegDat versión 2.3) By Angel de la Fuente
  10. Selektivität, soziale Bindung und räumliche Mobilität –Eine Analyse der Rückkehrpräferenz By Lutz Schneider; Alexander Kubis; D. Wiest

  1. By: Philip Cooke
    Abstract: Since Paul David published his economic histories of path dependent innovation the subject has exerted fascination upon scholars of innovation, technological change and, latterly, regional scientists and economic geographers. This paper speaks to the third and fourth of these communities in the main, though it may have theoretical and empirical elements of interest to the first two as well. The paper begins with an overview of recent perspectives and critiques concerning the relevance of the path dependence concept to the understanding of regional economic development and its associated governance. It then goes on to discuss the contribution of evolutionary economic geography to thinking about ÔbranchingÕ from path dependence and the creation of new paths. Evidence for key generic spatial processes of path transition is provided before the main content of the paper concludes with new insights into the contributions of regional innovation policy to path evolution. Conclusions are then drawn.
    Keywords: regional path dependence, branching, transition, transversality
    JEL: R11
    Date: 2010–09
  2. By: Berliant, Marcus; Yu, Chia-Ming
    Abstract: Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at a location. When workers’ marginal utility of housing is negatively correlated with their productivity, skill-biased technological change causes a core-periphery bifurcation where the agglomeration of high-skill workers eventually constitutes a unique stable equilibrium. When workers’ marginal utility of housing and their productivity are positively correlated, skill-biased technological improvements will never result in a core-periphery equilibrium. Location can at best be an approximate rather than a precise sieve for high skill workers.
    Keywords: Agglomeration; Adverse Selection; Asymmetric Information; Locational Signaling
    JEL: R13 D82 D51
    Date: 2009–12–19
  3. By: P. Bönisch; Lutz Schneider
    Abstract: Individuals’ preferences in transition regions are still shaped by the former communist system. We test this ‘Communism legacy’ hypothesis by examining the impact of acculturation in a communist regime on social network participation and, as a consequence, on preferences for spatial mobility. We focus on the paradigmatic case of East Germany where mobility intentions seem to be substantially weaker than in the western part. Applying an IV ordered probit approach we firstly find that East German people acculturated in a Communist system are more invested in locally bounded informal social capital than West Germans. Secondly, we confirm that membership in such locally bounded social networks reduces the intention to move away. Thirdly, after controlling for the social network effect the mobility gap between East and West substantially reduces. Low spatial mobility of the eastern population, we conclude, is to an important part attributable to a social capital endowment characteristic to post-communist economies.
    Keywords: regional mobility, social capital, East Germany
    JEL: J61 R23 C35
    Date: 2010–09
  4. By: Kazuko Kano (Faculty of Economics, University of Tokyo); Takashi Kano (School of Finance and Economics, The University of Technology Sydney); Kazutaka Takechi (Faculty of Economics, Hosei University)
    Abstract: Past studies in the literature of the law of one price (LOP) show statistically significant but economically subtle roles of geographical distance in regional price dispersions. In this paper, we challenge this empirical "death of distance" as a primary source of LOP violations investigating a unique daily data set of wholesale prices of agricultural products in Japan that enables us to identify source regions and observe product-delivery patterns to consuming regions. We build a simple structural model to explain the observed product-delivery patterns and argue that ignoring the underlying delivery choice results in a serious under-bias toward inferences on distance effects on regional price dispersions due to sample selection. Estimating a sample-selection model, on which theoretical restrictions of our structural model are imposed, with data of several agricultural products, we find quite large estimates of the distance elasticity of price differential compared with conventional estimates. This paper, hence, provides evidence that conventional estimates of the distance elasticity could be heavily biased downwards and spuriously underestimate the role transportation costs play in regional price dispersions and LOP violations.
    Date: 2010–09
  5. By: Robert Dixon (Department of Economics, The University of Melbourne); G. C. Lim (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne); John Freebairn (Department of Economics, The University of Melbourne)
    Abstract: It is important to understand how labour markets in different regions are affected by 'common’ or 'national' shocks including national macroeconomic, monetary and fiscal policies. This paper applies a new econometric approach - involving an unobserved components model - to identify the direction and timing of the shifts in regional Beveridge Curves. The method allows for the presence of common national factor(s) and region specific factor(s) in the determination of activity in labour markets including regional specific loadings on the common factor. The method is applied to Australian data. The results show that equilibrium unemployment rate vary by region and over time. In terms of implications for policies to reduce unemployment, these results suggest a key potential role for regional policies.
    Keywords: Beveridge curve, regional unemployment, unobserved components model
    JEL: R11 R12 E32
    Date: 2010–09
  6. By: Baafi Antwi, Joseph; Oppong Kwakye, Francis
    Abstract: Governance in short is a shift from bureaucratic process to shared power for the people. Governance in the urban areas goes hand in hand with planning. Issues of governance cannot be dealt with completely without proper planning. However, planning in the two largest cities of Kumasi and Accra has seen some major changes over time both spatially and administratively. Spatial, urban planning system has moved from new towns and town expansion to high standards of living. Administratively there has been the frantic effort of merging all law governing land use into one legal document which was not previously the case. But planning for growth and governance are faced with the following weakness; selective restraint, institutional and geographical fragmentation, short termism and power and resources.
    Keywords: Governance; Planning; Growth
    JEL: P41 O2
    Date: 2010–08–22
  7. By: Fioretti, Guido
    Abstract: This article presents an agent-based model of an Italian textile district where thousands of small firms specialize in particular phases of fabrics production. It is an empirical and methodological model that reconstructs the communications between firms when they arrange production chains. In their turn, production chains reflect into road traffic in the geographical areas where the district extends. The reconstructed traffic exhibits a pattern that has been observed, but not foreseen, by policy makers.
    Keywords: Time-Geography; Agent-Based Models; Prato
    JEL: C69 R39 D29 R41
    Date: 2010–09–09
  8. By: Angel de la Fuente
    Abstract: Las comunidades autónomas y el Gobierno central han alcanzado recientemente un acuerdo para la reforma del sistema de financiación regional. En el presente trabajo se describe el funcionamiento del nuevo sistema y se ofrece una estimación tentativa de sus resultados financieros en su año base efectivo de 2009. También se realiza una valoración crítica de su diseño y de sus implicaciones para la distribución de recursos entre territorios.
    Date: 2010–04
  9. By: Angel de la Fuente
    Abstract: En una serie de trabajos anteriores he construido series largas de diversos agregados económicos regionales enlazando las distintas bases de la Contabilidad Regional de España entre sí y con las series históricas elaboradas por la Fundación BBVA. Puesto que esta última fuente sólo ofrece datos para años impares, las series enlazadas heredan esta característica desde 1955 hasta 1989. En la presente nota se construyen series anuales completas de las variables de interés utilizando un sencillo procedimiento de interpolación que incorpora la información anual disponible a nivel nacional para estas variables.
    Date: 2010–09–03
  10. By: Lutz Schneider; Alexander Kubis; D. Wiest
    Abstract: In the public debate, the brain drain from East Germany is supposed to be the most critical trend regarding the development and catching-up of the New Länder. Therefore, potential for in- and re-migration has attracted much attention at least in the political context. Our contribution analyses the re-migration potential on the basis of data from a DFG research project focussing on the re-migration intentions of people formerly emigrated from Saxony-Anhalt. The analysis concentrates on the following aspects: the effect of job market success after emigration; the impact of social ties to the origin and the host region and on the selectivity of re-migration preferences. The econometric results confirm several expected effects: On the one hand an individual’s job market success reduces the intention to return. Likewise, the re-migration preference increases for people whose expectations were disappointed. On the other hand, the relevance of social ties to the origin region for re-migration dispositions is confirmed by the estimations. Yet, regarding selectivity of re-migration preferences in terms of human capital econometric results are somewhat ambiguous.
    Keywords: Return migration, regional convergence, East Germany
    JEL: J61 R23
    Date: 2010–09

This nep-geo issue is ©2010 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.