nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒01‒03
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Applying conclusions of the new economic geography for supporting elaboration of the spatial development strategies in the Baltic Sea Region By Jacek Zaucha; Krzysztof Najman
  2. Economization of spatial planning. The case of Poland’s Spatial Development Concept By Jacek Zaucha
  3. A new paradigm of the EU regional development in the context of the Poland’s National Spatial Development Concept By Jacek Szlachta; Jacek Zaucha
  4. The regional economic consequences of Less Favoured Area support: a spatial general equilibrium analysis of the Polish LFA program By James Giesecke; Mark Horridge; Katarzyna Zawalinska
  5. TFP convergence across European regions: a comparative spatial dynamics analysis By Adriana Di Liberto; Stefano Usai
  6. Subsidy Policy for Innovation : A way to reach objectives of both higher growth and equity ? By Benjamin Montmartin
  7. District-level Spatial Analysis of Migration Flows in Ghana: Determinants and Implications for Policy By Tsegai, Daniel; Le, Quang Bao
  8. Impact of The Global Crisis on Spatial Relationships in Russia By Konstantin Gluschenko
  9. The role of housing in labor reallocation By Morris A. Davis; Jonas D. M. Fisher; Marcelo Veracierto
  10. Urban accounting and welfare By Klaus Desmet; Esteban Rossi-Hansberg
  11. The dynamic effects of U.S. monetary policy on state unemployment By Korobilis, Dimitris; Gilmartin, Michelle
  12. Regional Innovation Policy beyond ‘Best Practice’: Lessons from Sweden By Martin, Roman; Moodysson, Jerker; Zukauskaite, Elena
  13. Education or just Creativity: what matters most for economic performance? By Emanuela Marrocu; Raffaele Paci
  14. Are knowledge-bases enough? A comparative study of the geography of knowledge sources in China (Great Beijing) and India (Pune) By Chaminade, Cristina
  15. Did 1933 New Deal Legislation Contribute to Farm Real Estate: Temporal and Spatial Analysis By Shaik, Saleem; Atwood, Joseph A.; Helmers, Glenn A.
  16. Innovation spillovers in industrial cities By Laura Crispin; Subhra B. Saha; Bruce A. Weinberg

  1. By: Jacek Zaucha (Institute for Development, Sopot, Poland); Krzysztof Najman (Dept. of Statistics, University of Gdansk, Sopot, Poland)
    Abstract: Spatial development policies are frequently elaborated without sufficient economics concern. This paper aims at testing possibilities opened by concepts of the “new economic geography” to verify assumptions of decision makers from the Baltic Sea Region (BSR) countries on the negative impacts of the still existing transport barriers on regional (i.e. Baltic) integration and cohesion. For that purpose the analysis of relative concentration of the employment in regional and sector disaggregation. has been used. The research has shown how great the difficulties, piling up before an economist willing to examine issues of spatial development in the setting of pan-European regions are. Therefore it was hardly possible to reject the hypotheses on positive influence of development of transport infrastructure on regional integration and cohesion in the BSR.
    Keywords: absolute concentration, entropy indices of concentration, Gini coefficients of concentration, new economic geography, relative concentration
    JEL: R12 R14
    Date: 2010–12
  2. By: Jacek Zaucha (Institute for Development, Sopot, Poland)
    Abstract: At the regional (subnational) level spatial planning has remained firm mainly in its land use aspects. Despite of pretty advanced legislation in Poland requiring each self-government region to prepare spatial planning outlines based on regional-socio economic strategies (both of indicative nature) the regional governments have gradually moved (in terms of human resources, interest of regional politicians) from think-tank (strategy making) position to bodies managing structural funds for given territories. More efficient communication of spatial planning messages, making spatial planning concepts better understood by those who shape the space by their routine decisions is only the first step towards combating the so-called stalemate of spatial planning. Despite of being very interdisciplinary spatial planning must become more opened to the co-operation and use the results from different fields of science.
    Keywords: regional policy, spatial development, Poland
    JEL: R10 R58
    Date: 2010–12
  3. By: Jacek Szlachta (Institute for Development, Sopot, Poland); Jacek Zaucha (Institute for Development, Sopot, Poland)
    Abstract: New factors inspiring spatial and regional policies in Poland have come out in the recent years. They complement the traditional, hardly spatial, paradigm of the socio-economic development with the concept of place-based economics. The paradigm shift was possible largely thanks to the contributions and inspiration from World Bank as well as the OECD. Additionally, new economic geography has contributed to that. New economic geography underlines the importance of space and its management for the enhancement of growth and development as well as for the formation of economic profiles of the regions or countries. In the EU member states the process has been facilitated by the entering into force of the Reformed Treaty (known as the Lisbon Treaty) which complements the social and economic cohesion with a new dimension of the territorial cohesion. A better understanding of the condition and tendencies of spatial development of Europe has been also possible thanks to the ESPON efforts. They continuously contribute to the ongoing debate on modification of the Cohesion Policy in the next programming period starting in 2014. Important milestones in these discussions are given by the EU Territorial Agenda of 2007 and the Barca Report of 2009. The work on the update of the Territorial Agenda has just been started. Based on this the authors of the paper present the benchmarks of the National Spatial Development Concept of Poland till 2030 (currently under preparation), allowing evaluation of the extent to which it belongs to the new generation of strategic documents in line with the emerging contemporary paradigm of the socio-economic development.
    Keywords: regional policy, structural policy, spatial development
    JEL: R10 R50 R58
    Date: 2010–12
  4. By: James Giesecke; Mark Horridge; Katarzyna Zawalinska
    Abstract: On accession to the EU, Poland, one of the most agricultural countries in the region, became eligible for the Common Agricultural Policy (CAP), which it perceived as a chance to develop its rural economy. However, in constructing its 2007-2013 Rural Development Programme, Poland directed the largest funding share to Less Favoured Areas (LFA) -- a controversial measure accused of poor targeting and ineffectiveness. In this paper, we analyse the spatial economic consequences of LFA support for all 16 NUTS2 regions in Poland using a regional computable general equilibrium model called POLTERM. We show that LFA support did help to increase farmers' incomes, but harmed export-oriented sectors and hindered structural change in the Polish economy.
    Keywords: Common Agricultural Policy Reform, Rural development, Less Favoured Areas, Spatial Computable General Equilibrium Model, Poland
    JEL: C68 O18 O11 O21 Q18
    Date: 2010–11
  5. By: Adriana Di Liberto; Stefano Usai
    Abstract: This paper proposes a fixed-effect panel methodology that enables us to simultaneously take into account both TFP and traditional neoclassical convergence. We analyse a sample of 199 regions in EU15 (plus Norway and Switzerland) between 1985 and 2006 and find the absence of an overall process of TFP convergence as we observe that TFP dispersion is virtually constant across the two sub-periods. This result is proved robust to the use of different estimation procedures such as simple LSDV , spatially corrected LSDV , Kiviet-corrected LSDV, and GMM à la Arellano and Bond. However, we also show that this absence of a strong process of global TFP convergence hides interesting dynamic patterns across regions. These patterns are revealed by the use of recent exploratory spatial data techniques that enable us to obtain a complete picture of the complex EU cross-regions dynamics. We find that, between 1985 and 2006, there has been numerous regional miracles and disasters in terms of TFP performance and that polarization patterns have significantly changed along time. Overall, results seem to suggest that a few TFP leaders are emerging and are distancing themselves from the rest, while the cluster of low TFP regions is increasing.
    Keywords: TFP; technology catching up; panel data; exploratory spatial data analysis
    JEL: C23 O33 O47 R11
    Date: 2010
  6. By: Benjamin Montmartin (Université de Lyon, Lyon, F-69003, France ; Université Jean Monnet ; CNRS, GATE Lyon St Etienne, Saint-Etienne, F-42000, France)
    Abstract: Since the Lisbon Agenda (2000), the European Union policies are increasingly oriented towards innovation as attested to by the deep change of the new Regional Policy. This paper proposes an analysis of an innovation subsidy policy in an agglomeration and growth model à la Martin and Ottaviano (1999). In this two-regions model, we assume that the policy is implemented by a central authority that taxes the profit of industrial firms to subsidy employment in innovative activities. We show that the positive effects on growth and equity of such a policy, as highlighted by Martin (1999), hold in the case where the policy is not geographically differentiated. In the case where the government however grants larger subsidies to the poorer region in order to reduce the concentration of the innovative sector, we show that the policy can be inefficient if it is not of sufficient magnitude.
    Keywords: economic geography, endogenous growth, public policy, subsidies,Regional Policy
    JEL: F43 H50 O30 R12
    Date: 2010
  7. By: Tsegai, Daniel; Le, Quang Bao
    Abstract: The present study investigates the determinants of inter-district migration flows over the 1995-2000 period in Ghana. A combination of socio-economic, natural and spatial âdistrict-levelâ attributes are considered as potential variables explaining the direction of migration flows. In addition to the ânetâ migration model, âinâ and âoutâ migration models are also employed within the context of the gravity model. Results in the three models consistently show that people move out of districts with less employment and choose districts with high employment rate as destinations. While shorter distance to roads encourages out-migration, districts with better water access seem to attract migrants. Generally, people move out of predominantly agrarian districts to relatively more urbanized districts.
    Keywords: Gross migration, Net migration, Inter-district migration flows, spatial analysis, Ghana, Africa, Community/Rural/Urban Development, Labor and Human Capital,
    Date: 2010–12
  8. By: Konstantin Gluschenko
    Abstract: This paper seeks an answer to the question of whether the global crisis had a persistent effect on inter-regional income equality and spatial market integration in Russia. Results obtained suggest that the answer is generally negative.
    Keywords: Income inequality, market integration, Russian regions
    JEL: O15 P22 P25 R11
    Date: 2010
  9. By: Morris A. Davis; Jonas D. M. Fisher; Marcelo Veracierto
    Abstract: This paper builds a dynamic general equilibrium model of cities and uses it to analyze the role of local housing markets and moving costs in determining the character and extent of labor reallocation in the US economy. Labor reallocation in the model is driven by idiosyncratic city-specific productivity shocks, which we measure using a dataset that we compile using more than 350 U.S. cities for the years 1984 to 2008. Based on this measurement, we find that our model is broadly consistent with the city-level evidence on net and gross population flows, employment, wages and residential investment. We also find that the location-specific nature of housing is more important than moving costs in determining labor reallocation. Absent this quasi-fixity of housing, and under various assumptions governing population flows, population and employment would be much more volatile than observed.
    Keywords: Housing - Econometric models ; Labor market
    Date: 2010
  10. By: Klaus Desmet (Universidad Carlos III); Esteban Rossi-Hansberg (Princeton University)
    Abstract: This paper proposes a simple theory of a system of cities that decomposes the determinants of the city size distribution into three main components: efficiency, amenities, and frictions. Higher efficiency and better amenities lead to larger cities, but also to greater frictions through congestion and other negative effects of agglomeration. Using data on MSAs in the United States, we parametrize the model and empirically estimate efficiency, amenities and frictions. Counterfactual exercises show that all three characteristics are important in that eliminating any of them leads to large population reallocations, though the welfare effects from these reallocations are small. Overall, we find that the gains from worker mobility across cities are modest. When allowing for externalities, we find an important city selection effect: eliminating differences in any of the city characteristics causes many cities to exit. We apply the same methodology to Chinese cities and find welfare effects that are many times larger than in the U.S.
    Date: 2010–12–21
  11. By: Korobilis, Dimitris; Gilmartin, Michelle
    Abstract: This paper studies the transmission of monetary shocks to state unemployment rates, within a novel structural factor-augmented VAR framework with a time-varying propagation mechanism. We find evidence of large heterogeneity over time in the responses of state unemployment rates to monetary policy shocks, which do not necessarily comply with the response of the national unemployment rate. We also find evidence of heterogeneity over the spatial dimension, although geographical proximity seems to play an important role in the transmission of monetary shocks.
    Keywords: regional unemployment; structural VAR; factor model; monetary policy
    JEL: C32 E52 R11 C11
    Date: 2010–12
  12. By: Martin, Roman (CIRCLE, Lund University); Moodysson, Jerker (CIRCLE, Lund University); Zukauskaite, Elena (CIRCLE, Lund University)
    Abstract: This paper deals with policy measures in the regional innovation system of Scania, Southern Sweden. Focus is dedicated to requirements on innovation policy from actors representing different industries. Previous studies have identified profound differences with regard the organization of knowledge sourcing between firms and other actors in industries drawing on different knowledge bases. In correspondence with these findings, industries differ also with regard to how policy measures aiming to support innovation are perceived and acquired. Despite this, there is a tendency among regional policy programs to base their strategies on one ‘best practice’-model, inspired by successful (or sometimes less successful) cases in other parts of the world. The paper presents an in-depth analysis of such policy support targeting three industries located in one region, and ends with a suggestion to how those should be adapted to render influence on the institutional framework of the regional innovation system.
    Keywords: innovation policy; regional innovation systems; knowledge bases; Sweden
    JEL: O30 O38
    Date: 2010–11–01
  13. By: Emanuela Marrocu; Raffaele Paci
    Abstract: There is a large consensus among researchers on the positive role played by human capital on economic performances although the debate on its measurement (education or creativity) is still open. This paper aims to disentangle this issue by proposing a disaggregation of human capital into three non-overlapping categories. Using a spatial error model to account for spatial dependence, we assess the concurrent effect of the human capital indicators on total factor productivity for the EU27 regions. Our results indicate that the highly educated creative group is the most relevant one in explaining production efficiency while the other two categories - non creative graduates and bohemians - exhibit negligible effects. Moreover, a relevant influence is exerted by technological capital and by the level of tolerance providing robust evidence that a highly educated, innovative, open and culturally diverse environment is becoming more and more central for productivity enhancements.
    Keywords: human capital; creativity; education; TFP; European regions
    JEL: R10 O30 J24
    Date: 2010
  14. By: Chaminade, Cristina (CIRCLE, Lund University)
    Abstract: This paper focuses on the organization and geography of interactions between firms and other organizations in two industries: software and autoparts. In contrast to most recent literature in economic geography that argues that industries differ in their knowledge bases and that consequently different industries show different patterns of local-global interactions, our results show stronger differences between regions in the same industry than between industries in the same region, thus pointing out to other factors explaining the geography of innovation in that particular industry.
    Keywords: internationalization; innovation; Pune; Beijing; region
    JEL: O30
    Date: 2010–12–01
  15. By: Shaik, Saleem; Atwood, Joseph A.; Helmers, Glenn A.
    Abstract: The proportions of land values generated by farm program payments and farm returns are examined using an extended income capitalization model. The extended income capitalization model addresses the identification issue introduced by the counter-cyclical nature of farm program payments and farm returns. Procedures are presented that allow the estimation of agriculture land value shares without requiring explicit knowledge or assumptions with respect to the net land rental shares of farm returns or farm program payments. Results from the panel recursive or triangular-structure simultaneous equation model applied to 48 states in the U.S. for the period 1938 to 2006 indicate on average 41-45.6 percent and 54.4-59 percent of the agricultural land values can be identified with farm program payments and farm returns respectively. Spatially, at the resource regional level the contribution of farm program payments was as low as 16.8 percent in Eastern Upland region compared to a high of 51 percent in the Southern Plains region.
    Keywords: Farm programs payments, Land values, Extended income capitalization model, Panel recursive/triangular structure simultaneous equation model, Resource regional analysis, U.S. State-level data, 1938-2007., Agricultural Finance, Farm Management,
    Date: 2010–08
  16. By: Laura Crispin; Subhra B. Saha; Bruce A. Weinberg
    Abstract: Older, industrial cities have suffered with the shift from manufacturing to services, but the increased importance of innovation as an economic driver may help industrial cities, which are often rich in the institutions that generate innovation. This paper studies how innovation is related to wages for different types of workers (e.g., more-educated versus less, and younger versus older) and to real estate prices for cities. We also study industrial and occupational employment shares. Our estimates indicate that innovation and aggregate education are associated with greater productivity in cities. They indicate that innovation and aggregate education impact wages less in industrial cities, but that they impact real estate prices more. We also find greater effects of innovation and aggregate education for more-educated and prime-aged workers. We pay particular attention to controlling for causality and adjustments of factor inputs.
    Keywords: Cities and towns ; Education - Economic aspects
    Date: 2010

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