nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒03‒12
nine papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Towns (and Villages); Definitions and Implications in a Historical Setting By Florian Ploeckl
  2. A Hotelling Style Model of Spatial Competition for Convenience Goods By B. Curtis Eaton; Jesse Tweedle
  3. Cycles Inside Cycles. Spanish Regional Aggregation By Maria Dolores Gadea; Ana Gomez Loscos; Antonio Montañes
  4. Multilevel Modelling with Spatial Effects By Bernard Fingleton; Luisa Corrado
  5. Asymmetrien in der Neuen Ökonomischen Geographie : Modelle, Simulationsmethoden und wirtschaftspolitische Diskussion = Asymmetries in new economic geography : models, simulation methods and economic discussion By Sascha Frohwerk
  6. Assessing the Incidence and Efficiency of a Prominent Place Based Policy By Matias Busso; Jesse Gregory; Patrick Kline
  7. Geographic Clustering and Productivity: An Instrumental Variable Approach for Classical Composers By Karol Jan Borowiecki
  8. Clusters, Networks and Creativity By Karlsson, Charlie
  9. How efficient is the Italian hospitality sector? A window DEA and truncated-Tobit analysis By JG. Brida; Claudio Detotto; Manuela Pulina

  1. By: Florian Ploeckl
    Abstract: Urbanization has been extensively used as a proxy for economic activity. The urban status of settlements is usually determined by an ad hoc population size household. This paper proposes a new threshold, taking into account the effect of local agricultural endowments. The new population threshold is a population size, such that for smaller settlements these endowments influence their size, while for larger they do not. This results in an endogeneous, data based threshold. The idea is practically shown for Saxony in the 19th century. The relevance of a different classification is demonstrated in four particular examples, the development of urbanization over time, Gibrat’s law, the impact of geography on town locations and the spatial relationship between towns and villages. The resulst demonstrate that the underlying classification scheme matters for the conclusions drawn from urban data.
    Keywords: Towns, villages, geography, definition, classification, town size
    JEL: N93 B49 O13 R12
    Date: 2011
  2. By: B. Curtis Eaton; Jesse Tweedle
    Abstract: Ordinarily people do not make special purpose trips to acquire goods like gasoline or roceries, but instead buy them as the need arises in the course of their daily lives. Such goods are commonly called convenience goods. We modify Hotelling's model of spatial competition so that we can analyze the price equilibrium of duopolists that retail a convenience good. Certain features of the duopolists' demand functions suggest that price competition is more severe in the convenience goods model than in the Hotelling model. The same features complicate the analysis because they mean that a pure strategy price equilibrium does not exists for many locational con-figurations. Although we are not able to find the mixed strategy price equilibrium analytically, we do present some numerical results on equilibrium prices that broadly confirm this suggestion. We also provide a more general product differentiation interpretation of the convenience good model.
    Date: 2011–01–01
  3. By: Maria Dolores Gadea; Ana Gomez Loscos; Antonio Montañes (University of Zaragoza)
    Abstract: This paper sets out a comprehensive framework to identify regional business cycles within Spain and analyses their stylised features and the degree of synchronisation among them and the Spanish economy. We show that the regional cycles are quite heterogeneous although they display some degree of synchronisation that can be partially explained using macroeconomic variables. We also propose a dynamic factor model to cluster the regional co-movements and test if the country cycle is simply the aggregation of the regional ones. We find that the Spanish business cycle is not shared by the 17 regions, but is the sum of the different regional behaviours. The implications derived from our results are useful both for policy makers and analysts.
    Keywords: Business Cycle. Synchronisation measures. Dynamic factor models
    Date: 2011–03–01
  4. By: Bernard Fingleton (Department of Economics, University of Strathclyde.); Luisa Corrado (Faculty of Economics, University of Cambridge)
    Abstract: In multilevel modelling, interest in modeling the nested structure of hierarchical data has been accompanied by increasing attention to di¤erent forms of spatial interactions across different levels of the hierarchy. Neglecting such interactions is likely to create problems of inference, which typically assumes independence. In this paper we review approaches to multilevel modelling with spatial e¤ects, and attempt to connect the two literatures, discussing the advantages and limitations of various approaches.
    Keywords: Multilevel Modelling, Spatial E¤ects, Fixed E¤ects, Random E¤ects, IGLS, FGS2SLS.
    JEL: C21 C31 R0
    Date: 2011–02
  5. By: Sascha Frohwerk
    Abstract: The new economic geography explains agglomerations based on a microeconomic general equilibrium model, witch is usually assumed to be symmetric in the sense, that regions are of the same size and transport costs and expenditure shares are the same. As a result, the models can explain why an agglomeration occurs, but not in witch region. This book modifies three of the most influential models of the new economic geography and assumes various asymmetries. It compares the results to the symmetric cases. Not only theoretical aspects but also methods of simulation are discussed in detail. This methods can be applied to a wide variety of models. To show the political implications of the theoretical results, one of the asymmetric models is applied to the economical development in germany after reunification. The model is able to explain the persistent difference in wages between east and west and the simultaneous incomplete agglomeration in the west.
    Keywords: new economic geography, methods of simulation, agglomeration, regional development
    JEL: P25 C63 R13 R23
    Date: 2011–03
  6. By: Matias Busso; Jesse Gregory; Patrick Kline
    Abstract: This paper empirically assesses the incidence and efficiency of Round I of the federal urban Empowerment Zone (EZ) program using confidential microdata from the Decennial Census and the Longitudinal Business Database. Using rejected and future applicants to the EZ program as controls, we find that EZ designation substantially increased employment in zone neighborhoods and generated wage increases for local workers without corresponding increases in population or the local cost of living. The results suggest the efficiency costs of first Round EZs were relatively small.
    JEL: H2 O1 R58 C21
    Date: 2011–02
  7. By: Karol Jan Borowiecki (Department of Economics, Trinity College Dublin)
    Abstract: It is difficult to estimate the impact of geographic clustering on productivity because of endogeneity issues. I use birthplace-cluster distance as an instrumental variable for the incidence of clustering of prominent classical composers born between 1750 and 1899. I find that geographic clustering strongly impacts the productivity of the clustering individuals: composers were approx. 33 percentage points more productive while they remained in a geographic cluster. Top composers and composers who migrated to the cluster are the greatest beneficiaries of clustering. The benefit depends on the clustering intensity and has a long-term impact.
    Keywords: geographic concentration, cities, mobility, productivity, urban history, composer
    JEL: D24 J24 J61 N90 O47 R11 Z19
    Date: 2011–03
  8. By: Karlsson, Charlie (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: An extensive amount of studies have been devoted to the importance of the creative process. Creativity is critical to research and in particular to innovation, a key feature of economic competitiveness. Most of the previous studies have dealt with the creativity of individuals, the creativity of teams and the importance of the organisational context. This chapter, however, emphasises the role of the characteristics of the local and regional economic milieu where the creative process takes place and the local and non-local networks of such milieus. Both the local ‘buzz’ related to interaction and learning opportunities, and non-local networks associated with integration of different milieus, offer special but different advantages for creative activities. The milieu will play an important role in creativity by supplying both a large number of incompatible ideas and good conditions for bringing them together in order to gain new, profound insights. Local accessibility, i.e. clustering, of incompatible ideas and the interregional accessibility to incompatible ideas in other regions are a function of the network characteristics of the local milieu. The purpose of this chapter is to explore the spatial concentration of creativity and the role of clustering and networks in stimulating creative regional economic milieus. One of the arguments of the chapter highlights how clustering of creative agents and creative processes in specific locations generates creative advantages that stimulate creativity and the in-migration of creative agents. Furthermore, the chapter stresses the idea that a better connected economic milieu to other economic milieus via networks transmitting new ideas, information knowledge, etc., will generate higher creative potential of that economic milieu.
    Keywords: creativity; creative process; clusters; artistic clusters; network theory; regional economics; local milieu; local and non-local interaction; innovation
    JEL: O31 R11
    Date: 2010–10–28
  9. By: JG. Brida; Claudio Detotto; Manuela Pulina
    Abstract: This paper analyses the Italian regional efficiency of the hospitality sector using a data envelopment analysis (DEA), for the time span 2000-2004. Via a window DEA, pure technical efficiency is computed. The Lombardy region presents the best relative performance. Overall Italian regions denote important sources of inefficiency mostly related to their inputs. Via a truncated-Tobit analysis, the rate of utilisation and regional intrinsic features positively are found to affect hospitality efficiency. Nevertheless, empirical evidence does not support spill-over effects amongst Italian regions.
    Keywords: Regional hospitality sector; window DEA; double bootstrap; spatial heterogeneity.
    JEL: C14 C24 L83 R11
    Date: 2011

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