nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒11‒06
eleven papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Trends and cycles in regional economic growth : how spatial differences formed the Swedish growth experience 1860-2009 By Martin Henning; Kerstin Enflo; Fredrik NG Andersson
  2. The Spatial Dimension in FDI Spillovers: Evidence at the Regional Level from Portugal By Nuno Crespo; Isabel Proença; Maria Paula Fontoura
  3. Determinants of Employer-Provided Further Training: A Multi-Level Approach By Bellmann, Lutz; Hohendanner, Christian; Hujer, Reinhard
  4. The citation impact of research collaboration in science-based industries: A spatial-institutional analysis By Koen Frenken; Roderik Ponds; Frank van Oort
  5. Balanced Budget Government Spending in a Small Open Regional Economy By Patrizio Lecca; Peter McGregor; Kim Swales
  6. The determinants of the recent interregional migration flows in Italy: A panel data analysis By Etzo, Ivan
  7. Geography of Scientific Knowledge: A Proximity Approach By Koen Frenken
  8. Regional Single Currency Effects on Bilateral Trade with the European Union By Joan Costa-i-Font
  9. How Would Global Trade Liberalization Affect Rural and Regional Incomes in Australia? By Kym Anderson; James Giesecke; Ernesto Valenzuela
  10. Neighbourhood Effects, Housing Tenure, and Individual Employment Outcomes By Manley, David; van Ham, Maarten
  11. Appropriate Economic Space for Transnational Infrastructural Projects: Gateways, Multimodal Corridors, and Special Economic Zones By Peter J. Rimmer; Howard Dick

  1. By: Martin Henning; Kerstin Enflo; Fredrik NG Andersson
    Abstract: Using a novel dataset on regional GDP per worker 1860-2009, this paper analyzes communalities in regional long-term growth trajectories for 24 Swedish provinces. Wavelet Analysis and Principal Component Analysis are used to decompose regional growth trajectories, and to assess to what extent growth in regions share common trend and cyclical properties. It is found that regional trend growth shows strong common features among groups of regions. Primarily natural resource rich regions benefited from the First Industrial Revolution. Contrary to regional development in many other European economies, a strong growth surge in Sweden later benefited virtually the whole country during the Second Industrial Revolution. Growth in this countrywide trend slowed down in the 1970s, when the metropolitan regions became main growth engines. In mid- and short-term cyclical movements regions display more heterogeneous growth patterns, and evidence of mid-term sequential lead-lag patterns in regional growth is found, especially between core and periphery.
    Keywords: Economic history, Economic geography, Regional growth, Wavelet analysis, Sweden
    JEL: N9 O14 R11 C22
    Date: 2010–10
  2. By: Nuno Crespo; Isabel Proença; Maria Paula Fontoura
    Abstract: There are theoretical reasons to expect that benefits to domestic firms from foreign direct investment would be confined to the area where the multinational firm is located and that the benefits depend on the development level of the host region. However, there is a scarcity of empirical studies on FDI’s indirect effects at the regional level, particularly with regard to inter-industry spillovers. This paper is an empirical contribution to this literature with data for Portugal. Both intra-industry and inter-industry FDI spillovers are considered. The concept of region adopted comprises the county in which the domestic firm is located, together with all of the directly neighbouring counties. Equations are estimated using the System GMM, with robust estimation of covariance matrices. Data confirms the relevance of both the geographical proximity and the development level of the region to this phenomenon. Furthermore, FDI spillovers are more evident at the inter-industry level. These results raise important implications for economic policy.
    Keywords: Portugal, FDI intra-industry spillovers, FDI inter-industry spillovers, counties, regional development level, geographical proximity.
    JEL: F21 F23
    Date: 2010–10
  3. By: Bellmann, Lutz (IAB, Nürnberg); Hohendanner, Christian (IAB, Nürnberg); Hujer, Reinhard (Goethe University Frankfurt)
    Abstract: We analyse the influence of regional determinants on the decision of employers to provide within-firm further training. We estimate the effects of the regional population density, the unemployment rate and the regional concentration of an industry against the background of several determinants of further training at the establishment level. To account for the clustered and longitudinal structure of our data – with annual observations of firms and firms nested within regions – we apply multi-level random effects logit models. Our empirical analysis is based on the IAB-Establishment Panel 2001 to 2007.
    Keywords: multi-level panel analysis, human capital, further training, regional labour markets
    JEL: J24 I21 C33 R12
    Date: 2010–10
  4. By: Koen Frenken; Roderik Ponds; Frank van Oort
    Abstract: This study shows for eight science-based industries that the citation impact of research collaboration is higher for international collaboration than for national and regional collaboration. A further analysis of institutional affiliations shows that university-industry-government collaborations profit from being organised at the regional scale only in the cases of biotechnology and organic fine chemistry. The alleged importance of physical proximity for successful interaction between university, industry and government thus is not robust across industries. We discuss the policy implications that follow.
    Keywords: proximity, citation, globalisation, university-industry-government collaboration, triple helixience, economics of science, geography of science, sociology of scientific knowledge
    JEL: O30 R10
    Date: 2010–03
  5. By: Patrizio Lecca (Department of Economics, Strathclyde University); Peter McGregor (Fraser of Allander Institute, Strathclyde University); Kim Swales (Department of Economics, Strathclyde University)
    Abstract: This paper investigates the impact of a balanced budget fiscal policy expansion in a regional context within a numerical dynamic general equilibrium model. We take Scotland as an example where, recently, there has been extensive debate on greater fiscal autonomy. In response to a balanced budget fiscal expansion the model suggests that: an increase in current government purchase in goods and services has negative multiplier effects only if the elasticity of substitution between private and public consumption is high enough to move downward the marginal utility of private consumers; public capital expenditure crowds in consumption and investment even with a high level of congestion; but crowding out effects might arise in the short-run if agents are myopic.
    Keywords: regional computable general equilibrium analysis, fiscal federalism, fiscal policy.
    JEL: H72 R13 R50
    Date: 2010–10
  6. By: Etzo, Ivan
    Abstract: The present study investigates the determinants of interregional migration flows in Italy in the light of the upsurge occurred in 1996, after two decades of decreasing internal migration rates. We apply the fixed effect vector decomposition estimator (FEVD) on a gravity model using bilateral migration flows for the period 1996-2005 and show that it improves the estimates with respect to the traditional panel data estimators. We find that omitting distance and in presence of rarely time invariant covariates (e.g., population and income) the standard panel data models significantly bias the estimates. The overall economic level and the probability to find a job (proxied by per capita GDP and unemployment rate) appear to be the key variables whose changes are able to push flows of migrants away from their regions and to direct them to “better off” destinations. We find that migrants leaving the regions in the Centre-North respond differently to the push and pull forces with respect to southern migrants. We then estimate a dynamic model and find evidence for the presence of social networks which in our model take place between each pair of regions.
    Keywords: Interregional migration; gravity model; panel data; FEVD.
    JEL: O15 J61 R23
    Date: 2010–06
  7. By: Koen Frenken
    Abstract: The geography of scientific knowledge is defined as the replication process of locally produced knowledge claims. Proximity in social, cognitive, and physical dimensions promotes the sharing of tacit knowledge. Thus, given the complementarity between tacit and codified knowledge, proximity supports the replication of codified knowledge claims. Distinguishing between controversial and uncontroversial contexts, one can understand the sociology of science as explaining the behaviour of scientists from their proximity to other scientists, and the sociology of scientific knowledge as describing the processes that constitute the proximity between scientists.
    Keywords: replication, knowledge claim, proximity, mobility, controversy, incentives, sociology of science, economics of science, geography of science, sociology of scientific knowledge
    Date: 2010–03
  8. By: Joan Costa-i-Font
    Abstract: This paper empirically examines the regional effects of sharing a single currency on bilateral trade with other European Union partners. It takes advantage of a gravity specification of bilateral trade between 17 Spanish regions and 13 European countries over the period 1997-2004, which in turn allows accounting for two distinct definitions of a single currency depending on its temporal set up. That is, the “exchange rate volatility effect” (from exchange rate fixing in 1999) is distinguished from the so-called “common currency effect” (resulting from the issuing of a new currency in 2002). Findings are suggestive of a regional concentration of currency union effects in a few regions, namely those relatively more open to trade. Such effects on regional trade within Europe are found to fade away over time. Trade enhancing effects are found to vary range from 45% to 16%. When the “exchange rate volatility effect” was significant, the pure currency union effect was found to be almost negligible.
    Keywords: gravity models, trade flows, regional heterogeneity, monetary union
    JEL: F4 F11 F33
    Date: 2010–10
  9. By: Kym Anderson (School of Economics, University of Adelaide); James Giesecke (Monash University); Ernesto Valenzuela (School of Economics, University of Adelaide)
    Abstract: Agricultural protection in rich countries, which had depressed Australian farm incomes via its impact on AustraliaÂ’s terms of trade, has diminished over the past two decades. So too has agricultural export taxation in poor countries, which has had the opposite impact on those terms of trade. Meanwhile, however, import protection for developing country farmers has been steadily growing. To what extent are Australian farmers and rural regions still adversely affected by farm and non-farm price- and trade-distortive policies abroad? This paper draws on new estimates of the current extent of those domestic and foreign distortions first to model their net impact on AustraliaÂ’s terms of trade (using the World BankÂ’s Linkage model of the global economy), and second to model the effects of that terms of trade impact on output and real incomes in rural vs urban and other regions and households within Australia as of 2004 (using MonashÂ’s multi-regional TERM model of the Australian economy).
    Keywords: Trade liberalisation, rural income, regional CGE modeling
    JEL: F13 Q18 C68 R13
    Date: 2010–01
  10. By: Manley, David (University of St. Andrews); van Ham, Maarten (University of St. Andrews)
    Abstract: This paper investigates whether individuals living in neighbourhoods with high concentrations of unemployment are less likely to enter work if they are unemployed and more likely to lose their job if they are employed. The main challenge in the neighbourhood effects literature is the identification of causal neighbourhood effects. A particular problem is that individuals do not randomly select neighbourhoods to live in: the selection process is often linked to the labour market situation and potential of individuals. To get more insight in neighbourhood effects we run separate models for social renters and owner occupiers. This study uses anonymised individual level longitudinal data from the Scottish Longitudinal Study for 1991 and 2001 with multiple neighbourhood scales operationalised. Based on the results we argue that any apparent neighbourhoods effects that were present in models of the full population are at least partly an artefact of different neighbourhood selection mechanisms. The conclusions of the paper call for a more nuanced treatment of neighbourhood effects and the development of models that seek to include neighbourhood selection from the outset.
    Keywords: neighbourhood deprivation, neighbourhood effects, labour market outcomes, longitudinal data, Scotland
    JEL: I30 J60 R23
    Date: 2010–10
  11. By: Peter J. Rimmer; Howard Dick (Asian Development Bank Institute)
    Abstract: This study addresses three questions that arise in Asia when formulating, financing, implementing, and maintaining transnational linkages versus purely domestic connections. Firstly, how is optimal economic space to be defined as a useful starting point? Secondly, how can relevant criteria be developed to define the emerging spatial economy and identify efficient transnational transport networks? Thirdly, what are the main investment opportunities in physical infrastructure that would result in more efficient and effective regional cooperation and integration (making special reference to the potential role of crossborder special economic zones (SEZs) or their equivalents)?
    Keywords: economic space, crossborder special economic zones, transnational transport networks
    JEL: R00 R10 R30 R40 R50
    Date: 2010

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