nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒02‒19
eight papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Do Regions with Entrepreneurial Neighbors Perform Better?: A Spatial Econometric Approach for German Regions By Katharina Pijnenburg; Konstantin A. Kholodilin
  2. Persistence of regional unemployment : Application of a spatial filtering approach to local labour markets in Germany By Patuelli, Roberto; Schanne, Norbert; Griffith, Daniel A.; Nijkamp, Peter
  3. Accumulation of education and regional income growth: Limited human capital effects in Norway By Jørn Rattsø and Hildegunn E. Stokke
  4. Spatial Differentiation in Industrial Dynamics. A Core-Periphery Analysis based on the Pavitt-Miozzo-Soete Taxonomy By Marco Capasso; Elena Cefis; Koen Frenken
  5. Job Matching Efficiency in Skilled Regions - Evidence on the Microeconomic Foundations of Human Capital Externalities By Daniel F. Heuermann
  6. Vertical Fiscal Transfers and the Location of Economic Activity across a Country Regions.Theory and Evidence for Argentina. By Pedro Moncarz; Sebastián Freille; Alberto Figueras; Marcelo Capello
  7. Policies for local development: an evaluation of Italy's "Patti Territoriali" By Antonio Accetturo; Guido de Blasio
  8. The Role of Additionality in the EU Cohesion Policies: An Example of Firm-Level Investment Support By d'Artis Kancs; Pavel Ciaian

  1. By: Katharina Pijnenburg; Konstantin A. Kholodilin
    Abstract: We use a neoclassical production function to analyze the effects of knowledge spillovers via entrepreneurship on economic performance of 337 German districts. To take the spatial dependence structure of the data into account, we estimate a spatial Durbin model. We highlight the importance of the choice of the appropriate weight matrix. We find positive knowledge spillover effects via entrepreneurship within a certain region. Between regions, entrepreneurship as a vehicle by which knowledge spills over and contributes to economic performance depends largely on the choice of the weight matrix. We see this as evidence for regionally bounded knowledge spillover effects via entrepreneurship.
    Keywords: Entrepreneurship capital, regional output, spatial weight matrix
    JEL: C21 M13 R11
    Date: 2011
  2. By: Patuelli, Roberto; Schanne, Norbert (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Griffith, Daniel A.; Nijkamp, Peter
    Abstract: "The geographical distribution and persistence of regional/local unemployment rates in heterogeneous economies (such as Germany) have been, in recent years, the subject of various theoretical and empirical studies. Several researchers have shown an interest in analysing the dynamic adjustment processes of unemployment and the average degree of dependence of the current unemployment rates or gross domestic product from the ones observed in the past. In this paper, we present a new econometric approach to the study of regional unemployment persistence, in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment. First, we propose an econometric procedure suggesting the use of spatial filtering techniques as a substitute for fixed effects in a panel estimation framework. The spatial filter computed here is a proxy for spatially distributed region-specific information (e.g., the endowment of natural resources, or the size of the 'home market') that is usually incorporated in the fixed effects parameters. The same argument applies for the spatial filter modelling of the heterogenous dynamics. The advantages of our proposed procedure are that the spatial filter, by incorporating region-specific information that generates spatial autocorrelation, frees up degrees of freedom, simultaneously corrects for time-stable spatial autocorrelation in the residuals, and provides insights about the spatial patterns in regional adjustment processes. We present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive parameters estimated for unemployment data for German NUTS-3 regions. We find widely heterogeneous but generally high persistence in regional unemployment rates." (author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitslosenquote, Persistenz, Schätzung, regionale Disparität
    JEL: C31 E24 E27 R11
    Date: 2011–02–10
  3. By: Jørn Rattsø and Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology)
    Abstract: Accumulation of education and geographic concentration of educated people in cities are expected to generate urban income growth. New economic geography predicts income divergence across regions. We investigate the dynamic process of accumulating tertiary education and regional income growth in Norway during the past four decades. The expansion of smart cities goes along with catching up of education level in the periphery and overall the education levels converge. Income levels also are shown to converge in distribution analysis using Kernel functions and first order Markov chains. However, the movements in the income distribution are unrelated to the accumulation of education. The hypothesis of equal income transition probabilities across subgroups of regions with different increases in education cannot be rejected. We conclude that accumulation of education has not been important for the pattern of income growth. Catching up from low income is not driven by education and income growth has not taken off in cities with increasing education level.
    Date: 2011–02–01
  4. By: Marco Capasso; Elena Cefis; Koen Frenken
    Abstract: We compare the industrial dynamics in the core, semi-periphery and periphery in The Netherlands in terms of firm entry-exit, size, growth and sectoral location patterns. The contribution of our work is to provide the first comprehensive study on spatial differentiation in industrial dynamics for all firm sizes and all sectors, including services. We find that at the aggregate level the spatial pattern of industrial dynamics is consistent with the spatial product lifecycle thesis: entry and exit rates are highest in the core and lowest in the periphery, while the share of persistently growing firms is higher in the periphery than in the core. Disaggregating the analysis to the sectoral level following the Pavitt-Miozzo-Soete taxonomy, findings are less robust. Finally, sectoral location patterns are largely consistent with the spatial product lifecycle model: Fordist sectors are over-represented in the periphery, while sectors associated with the ICT paradigm are over-represented in the core, with the notable exception of science-based manufacturing.
    Keywords: Entry, exit, spatial product lifecycle, Fordist paradigm, ICT paradigm
    JEL: L25 L26 L60 L80 O18 O33 R10
    Date: 2010–11
  5. By: Daniel F. Heuermann (Institute for Labour Law and Industrial Relations in the EC, University of Trier)
    Abstract: Inspired by the literature on the role of local career networks for the quality of labor market matches we investigate whether human capital externalities arise from a higher job matching efficiency in skilled regions. Using two samples of highly qualified workers in Germany we find that an increase in the regional share of highly qualified workers by one standard deviation is associated with between-job wage growth of about three percent and an increase in the annual probability of a job change of up to four percent. Wage gains are incurred only by workers changing jobs within industries. Consistently, workers in skilled regions are about fifty percent more likely to change jobs within rather than between industries. Taken together, these findings suggest that human capital externalities partly arise because workers in skilled regions have better access to labor market information, which allows them to capitalize on their industry-specific knowledge when changing jobs.
    Keywords: Human Capital Externalities, Job Matching
    JEL: D62 J24 J31 R11
    Date: 2011–01
  6. By: Pedro Moncarz (Universidad Nacional de Córdoba); Sebastián Freille (Universidad Nacional de Córdoba; CONICET); Alberto Figueras (Universidad Nacional de Córdoba); Marcelo Capello (Universidad Nacional de Córdoba; IERAL de Fundación Mediterránea)
    Abstract: Argentina has an important system of vertical transfers with a compensatory aim including the convergence across sub-national regions. However, there still exist high levels of asymmetries among the country provinces. Extending Martin and Rogers’ FCM including non- tradable goods and public employment we analyse the effect on economic activity location that follows to changes on the regional distribution of transfers. An increase in the share of transfers a region receives positively effect the production of manufactures the higher are: transaction costs of goods produced under increasing returns to scale; the share of transfers that goes directly to consumers instead of local governments; the elasticity of substitution between differentiated goods; the share of consumers’ expenditure on manufactures via-as-vis on non- traded goods.
    Keywords: federalism, vertical fiscal transfers, economic location
    JEL: R12 H71 H72
    Date: 2010–11
  7. By: Antonio Accetturo (Bank of Italy, Economics and International Relations); Guido de Blasio (Bank of Italy, Economics and International Relations)
    Abstract: In Italy, Patti Territoriali (Territorial Pacts) are one of the main government-sponsored programmes to foster growth in disadvantaged areas. A territorial pact is an agreement among the local authorities and representatives of civil society (mainly entrepreneurs and trade unions) of a number of neighbouring municipalities that is subsequently endorsed by the central government. It consists in a fully-fledged development plan, including a series of private and public investments for which public funding is provided. This paper evaluates the effectiveness of territorial pacts by comparing the economic performance, in terms of employment and number of plants, of participating municipalities with a sample of municipalities not involved in the policy. The results suggest that the programme has been largely ineffective in stimulating growth.
    Keywords: regional aid, regional growth, ownership
    JEL: R0 H2
    Date: 2011–01
  8. By: d'Artis Kancs; Pavel Ciaian
    Abstract: Additionality is one of the key principles driving the functioning of the EU Cohesion Policies (ECP). The present paper studies how additionality affects the distributional effects of the ECP. Using the example of the firm-level investment support, we analyse the role of additionality and co-financing rate in differently competitive markets. We find that the investment additionality and the level of competition importantly affect the distributional effects of the ECP. Imposing additionality to the ECP investments in a perfectly competitive environment causes distortions in the capital market and leads to lower welfare levels. In contrast, without the enforcement of additionality, the distortions are zero and the support fully benefits firms. In an imperfectly competitive environment the firm-level investment support may increase capital use and may be welfare increasing with and without the enforcement of the investment additionality.
    Keywords: Additionality, EU Cohesion Policy, investment subsidy, regional development.
    JEL: F1 O1 R3 R4
    Date: 2010–11–26

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