nep-geo New Economics Papers
on Economic Geography
Issue of 2010‒12‒23
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The Role of Regional Price Index in New Economic Geography Models By Dusan Paredes
  2. A regional growth model with external effects among spanish provinces. Un modelo de crecimiento con efectos externos entre las provincias españolas By Ángel Alañón Pardo; Miguel Gómez de Antonio
  3. Transport Costs and the Size Distribution of a Linearly Arranged System of Cities By Albrecht Kauffmann
  4. Spatial integration in European cross-border metropolitan regions: A comparative approach By DECOVILLE Antoine; DURAND Frédéric; SOHN Christophe; WALTHER Olivier
  5. Agglomerative Forces and Cluster Shapes By William R. Kerr; Scott Duke Kominers
  6. The Tax Policy in the Chilean Economy: a Regional Applied General Equilibrium Analysis By Marcos Minoru Hasegawa
  7. Spatial propagation of macroeconomic shocks in Europe By Hans DEWACHTER; Romain HOUSSA; Priscilla TOFFANO
  8. Regional Entrepreneurial Opportunities in the Biotech Industry: Exploring the Transition from Award-winning Nascent Entrepreneurs to Real Start-ups By H. Wolf; Claus Michelsen; Michael Schwartz
  9. Análisis de Sensibilidad en Modelos de Equilibrio General Aplicado: una evaluación de alternativa del impacto de políticas sobre las regiones de Chile By Marcos Minoru Hasegawa
  10. The political economy of fixed regional investment shares with an illustration for Belgian Railway investments By Stef PROOST; Vera ZAPOROZHETS
  11. Recursos Turísticos Regionales: Rol de la jerarquía internacional como potenciador de sus áreas vecinas By Esteban Lopez; Marcelo Lufin
  12. Towards a spatial perspective on sustainability transitions By Coenen, Lars; Benneworth, Paul; Truffer, Bernhard
  13. Coexistence and Conflicts between Shopping Malls and Street Markets in Growing Cities: Analysis of Shoppers’ Behavior By Rajagopal
  14. Building Bridges: Heterogeneous Jurisdictions, Endogenous Spillovers, and the Benefits of Decentralization By Paulo Júlio; Susana Peralta
  15. Análise comparativa de sobrevivência empresarial: o caso da região Norte de Portugal By Elsa Morais Sarmento; Alcina Nunes
  16. Testing for Zipf’s Law: A Common Pitfall By Urzúa, Carlos M.

  1. By: Dusan Paredes (Department of Economics, Universidad Católica del Norte)
    Keywords: New Economic Geography, Regional Price Index
    Date: 2010–12
  2. By: Ángel Alañón Pardo (Departamento de Economía Aplicada I. Universidad Complutense de Madrid.); Miguel Gómez de Antonio (Departamento de Economía Aplicada VI. Universidad Complutense de Madrid.)
    Abstract: A non neoclassical growth model with external effects among Spanish provinces is estimated through cross section and panel data Spatial Econometrics techniques for the 1970-2000 period. There are two kind of regional product determinants: spatial variables (intra and interregional agglomeration forces) and non spatial variables (firm size and public capital). Results show that both intra regional and inter regional spatial variables are statistically significant, and the need of considering the use of Spatial Econometrics techniques when dealing with spatial data and phenomena. We find a positive relationship between public investment and regional economic growth, accepting Aschauer’s hypothesis for the Spanish economy.
    Abstract: En este trabajo se estima un modelo de crecimiento no neoclásico con efectos externos entre las provincias españolas que permite contrastar la hipótesis de Aschauer utilizando técnicas de econometría espacial. El modelo se estima para datos sección cruzada y para un panel de datos para el periodo 1970-2000. Se distinguen dos conjuntos de determinantes de la renta provincial: las variables territoriales (fuerzas de aglomeración intra e interregionales) y las no territoriales (tamaño empresarial y capital público). Los resultados destacan la importancia de las variables territoriales, tanto intraterritoriales como interterritoriales, así como, la relación positiva entre la inversión pública y el crecimiento económico. Así mismo, se subraya la necesidad de contemplar el uso de técnicas de econometría espacial cuando se trabaja con datos y con fenómenos espaciales.
    Keywords: Regional growth, Agglomeration, External effects, Spatial econometrics, Crecimiento regional, Aglomeración, Efectos externos, Econometría espacial
    JEL: R1 R11 R12 O49
    Date: 2010
  3. By: Albrecht Kauffmann
    Abstract: The question regarding the effects of changing transports costs on the size distribution of cities is an important topic of systems of cities research. The so-called New Economic Geography has already given some answers to this question. One central assumption in this kind of model is a very particular, simplified spatial structure. This contribution investigates the consequences of changing transport costs for a system of cities that are located equidistantly on a straight line. In the case of rising transport costs, the main outcome of this model is worker concentration in the central large cities, while the peripheral regions lose residents.
    Date: 2010–12
  4. By: DECOVILLE Antoine; DURAND Frédéric; SOHN Christophe; WALTHER Olivier
    Keywords: cross-border; metropilitan regions; spatial integration; commuters; gross domestic product; housing market; Europe
    JEL: F15 F16 J01 J21 J61 R58
    Date: 2010–12
  5. By: William R. Kerr (Harvard Business School, Entrepreneurial Management Unit); Scott Duke Kominers (Harvard Business School)
    Abstract: We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across both technology clusters and industry agglomeration.
    Keywords: Agglomeration, Clusters, Industrial Organization, Silicon Valley, Entrepreneurship, Labor Markets, Technology Flows, Patents, Natural Advantages.
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2010–12
  6. By: Marcos Minoru Hasegawa (Department of Economics, Universidad Católica del Norte)
    Abstract: The main goal of this research is to analyze the tax reduction policy impact in sector and regional level and its effectiveness in the Chilean Economy by means of a regional applied general equilibrium model (AGE). A static, deterministic and top-down AGE model, known as ORANIG model with regional extension was adapted for the Chilean Economy that was re-named as ORANICL model. Regional particularities among Chilean regions are relevant when designing policies are oriented to improve welfare and the economic performance at regional and national level in the taxing and spending function with special attention to the value aggregated tax (VAT). A 1% reduction on the VAT increases real GDP in 0.64% and the aggregated employment in 1.60%. In the regional level a 1% of VAT reduction increases the activity level by 0.58%, 0.64%, 0.76% and 0.68% for North, Central, Metropolitan region of Santiago and South regions respectively. By the same shock, employment increases by 1.47%, 1.49%, 1.71% and 1.52% for the same regions respectively. Results yielded by a 1% of VAT reduction seems to be not enough to refute the hypothesis that the centralism approach adopted for the Chilean government is the best policy design choice. Likewise, we show that a regional AGE model is a powerful tool for policy analysis for Chile.
    Keywords: Chile, Regional Economics, Tax Policy, AGE models
    Date: 2010–12
  7. By: Hans DEWACHTER; Romain HOUSSA; Priscilla TOFFANO
    Abstract: This paper develops a Spatial Vector Auto-Regressive (SpVAR) model that takes into account both the time and the spatial dimensions of economic shocks. We apply this framework to analyze the propagation through space and time of macroeconomic (inflation, output gap and interest rate) shocks in Europe. The empirical analysis identifies an economically and statistically significant spatial component in the transmission of macroeconomic shocks in Europe.
    Keywords: Macroeconomics, Spatial Models, VAR
    JEL: E3 E43 E52 C51 C33
    Date: 2010–04
  8. By: H. Wolf; Claus Michelsen; Michael Schwartz
    Abstract: Knowledge of factors that determine the transition from nascent entrepreneurship into real entrepreneurship is of major importance for policies aiming to effectively stimulate start-ups. Whereas scholars concentrated on person-specific factors to explain transition probabilities, environmental characteristics have been fairly neglected. Given that entrepreneurship is a strongly localized phenomenon, this paper argues that regional entrepreneurial opportunities are a driving force behind the transition from nascent entrepreneurship to new venture creation. Based on unique data on 103 nascent entrepreneurs in the German biotechnology industry, we empirically assess the importance of regional entrepreneurial opportunities on transition probabilities. Further, we introduce a new approach to measure nascent entrepreneurship by capturing individuals that actively participate in start-up competitions and have won at least one competition. Controlling for technology and individual characteristics, we find strong support for our hypotheses relating to the significant impact of general regional opportunities, specific regional opportunities and the entrepreneurial environment for the probability of transition from award-winning nascent entrepreneurs to real start-ups.
    Date: 2010–12
  9. By: Marcos Minoru Hasegawa (Department of Economics, Universidad Católica del Norte)
    Abstract: El artículo tiene como objetivo realizar el análisis de sensibilidad de variables exógenas y de los parámetros de un modelo de equilibrio general aplicado con extensión regional adaptado para la Economía Chilena. El resultado del análisis de sensibilidad entrega como los resultados pueden ser afectados con la variación de los valores de los parámetros y de las variables exógenas del modelo. El análisis de sensibilidad también ayuda a mejorar la calidad de los datos utilizados como parámetros en el modelo.
    Keywords: Metodos de analisis regional
    Date: 2010–12
    Abstract: Many local public goods are allocated by federal governments using fixed regional shares: every region is entitled a fixed share of the total budget for a particular type of public good. This paper compares this fixed regional sharing rule with two alternative allocation rules: first best and common pool allocation. We find that the fixed regional sharing rule performs relatively well if the regional shares are reasonable. Legislative bargaining theory is used to study the determination of the fixed regional shares.
    Keywords: local public goods, political economy, railways
    JEL: H41 H77 L9
    Date: 2010–02
  11. By: Esteban Lopez (Department of Economics, Universidad Católica del Norte); Marcelo Lufin (Department of Economics, Universidad Católica del Norte)
    Abstract: Los recursos tur´isticos son determinantes del atractivo de una regi´on y por lo tanto en su visitaci´on. As´i, los procesos de planeaci´on tur´istica debieran contar con una adecuada definici´on, caracterizaci´on y an´alisis de los recursos. Este trabajo contribuye a la caracterizaci´on y an´alisis de los recursos tur´isticos incluyendo a la dimensi´on espacial como una herramienta para entender las similitudes y diferencias dentro y entre las regiones de Chile. Usando datos del SERNATUR (2007), los resultados revelan similitudes y diferencias entre las regiones logrando distinguir al menos tres grupos funcionales. Adicionalmente en el plano comunal, se confirma a los recursos con jerarqu´ia internacional como potenciadores de sus ´areas vecinas. Los resultados sugieren mayor consideraci´on de la experiencia local en la planeaci´on. Touristic resources are an attractive determinant in a region and therefore of its visitation. In this line, for touristic planning process is required to consider accurate definition, characterization and analysis of its resources. This article contributes through characterization and analysis of touristic resources using a spatial dimension as a tool to get deeper insights about similarities and differences between and within Chilean regions. Using SERNATUR (2007) data, the result show differences and similarities between regions obtaining at least three functional groups. In a county level, those resources with higher hierarchy are confirmed to play a promoter role of its neighbors. These results suggest more consideration of local experiences in touristic planning process.
    Keywords: Recursos Turisticos, Analisis de Patrones de Puntos y Analisis Espacial
    JEL: L83 R12 R14 R52 R58
    Date: 2010–12
  12. By: Coenen, Lars (CIRCLE, Lund University); Benneworth, Paul (Center for Higher Education Policy Studies (CHEPS), University of Twente); Truffer, Bernhard (Eawag (Acquatic Research Institute))
    Abstract: In the past decade, the literature on transitions towards sustainable socio-technical systems has made a considerable contribution in understanding the complex and multi-dimensional shifts considered necessary to adapt societies and economies to sustainable modes of production and consumption. However, transition analyses have often neglected where transitions take place, and the geographical configurations and dynamics of the networks within which transition evolve. An explicit analysis of the geography of transitions contributes to the extant transitions literature in a variety of ways. Firstly it provides a contextualization and reflection on the limited territorial sensitivity of existing transitions analysis. The majority of empirical studies have been conducted in a small number of countries, and primarily the Netherlands, UK or Scandinavia, with an increasing interest in Asian countries. Secondly, it explicitly acknowledges and investigates a variety of transition pathways. Thirdly, it encompasses not only greater emphasis but also better conceptual and theoretical devices for understanding the international, trans-local nature of transition dynamics. Drawing on recent insights from economic geography, this paper seeks to improve existing transition theory by (1) creating a conceptual framework for better understanding geographical dimensions of sustainability transitions, and (2) beginning to highlight some of the boundary
    Keywords: transitions studies; economic geography; territorial innovation systems; multi-scalarity; geographies of transitions
    JEL: O30
    Date: 2010–10–01
  13. By: Rajagopal (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: Street markets in developing countries constitute an integral part of the local economy as well as exhibit ethnic image of the habitat, which continues to function also in growing cities. The shopping malls have intercepted the traditional marketplace culture and are instrumental in shifting the consumer behavior in urban areas. This article discusses how consumers' decision-making styles shift towards shopping at malls as well as street markets in Mexico City. Based on exploratory data and using a theoretical model of consumer-decision making styles, this study addresses the causes and effects of coexistence of shopping malls and street markets. The results show that there are various economic and marketplace ambience related factors that affect the consumer decisiontowards shopping. The article concludes with specific suggestions for reducing conflicts and increasing cohesiveness towards the shopping behavior between shopping malls and street markets, and advancing strategic retailing strategies to establish the co-existence of contemporary and conventional market systems.
    Keywords: Shopping malls, street markets, shopping behavior, urban marketplace,Mexico, market ambience
    JEL: M31 O18 R12
    Date: 2010–12
  14. By: Paulo Júlio (Gabinete de Estratégia e Estudos, Ministry of Economy, Innovation and Development); Susana Peralta (Faculdade de Economia, Universidade Nova de Lisboa, CORE-UCL and CEPR.)
    Abstract: We model two heterogeneous districts of unequal size that may enjoy each other's local public good if a costly national infrastructure (the bridge) is provided. We compare a decentralized regime where local public goods are decided locally and the bridge centrally, with a centralized regime where all decisions are taken centrally, under both benevolent planner and median voter decision making. In both cases, it may happen that either both regimes build the bridge, none, or only one does. We provide a full-edged welfare comparison of all the possibilities. When the bridge is built in both regimes, centralization dominates if the spillovers allowed by the bridge are sufficiently high. When the bridge is not built in the centralized regime, decentralization is always preferred. We also show that, under some circumstances, it may happen that decentralization dominates even if it does not build the bridge, while the centralized regime does. Finally, we suggest a simple mechanism to avoid the costs imposed by the centralized regime upon minorities: allocating decision power over the local public goods and the bridge to different local constituents.
    Keywords: Local public goods; Endogenous Spillovers; Fiscal (de)centralization.
    JEL: D70 H11 H41 H70
    Date: 2010–12
  15. By: Elsa Morais Sarmento (Gabinete de Estratégia e Estudos, Ministério da Economia, da Inovação e do Desenvolvimento; Departamento de Economia, Gestão e Engenharia Industrial, Universidade de Aveiro.); Alcina Nunes (Departamento de Economia e Gestão, Instituto Politécnico de Bragança)
    Abstract: This study approaches the survival ability of firms in the North region of Portugal from 1985 to 2007, allowing regional and national comparisons through the application of non-parametric and semi-parametric methods. This analysis is based on the creation of a specific entrepreneurship database, based on Quadros de Pessoal, where the methodology of Eurostat/OECD´s “Manual of Business Demography Statistics” was applied to. In the North, firms close earlier on during their infancy as their median duration is below the median duration of firms located in the rest of the country. The high turbulence of firm turnover is pointed out as a fundamental determinant of the survival probabilities of firms in this region.
    Keywords: Empreendedorismo, Dinâmica Empresarial, Sobrevivência, Análise Regional.
    JEL: C14 C41 L25 L26 R11
    Date: 2010–12
  16. By: Urzúa, Carlos M. (Tecnológico de Monterrey, Campus Ciudad de México)
    Abstract: It is noted that the regression procedure commonly used when testing for Zipf’s law is erroneous.
    Keywords: Zipf’s law, rank-size
    JEL: C12 R11 R12
    Date: 2010–12

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