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on Economic Geography |
| By: | vom Berge, Philipp |
| Abstract: | This paper develops a general equilibrium geographical economics model which uses matching frictions on the labor market to generate regional unemployment disparities alongside the usual core-periphery pattern of industrial agglomeration. In the model, regional wage differentials do not only influence migration decisions of mobile workers, but also affect the bargaining process on local labor markets, leading to differences in vacancies and unemployment as well. In a setting with two regions, both higher or lower unemployment rates in the core region are possible equilibrium outcomes, depending on transport costs and the elasticity of substitution. Stylized facts suggest that both patterns are of empirical relevance. |
| Keywords: | Regional labor markets; New Economic Geography; job matching; unemployment |
| JEL: | F12 J61 J64 R12 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:bay:rdwiwi:20304&r=geo |
| By: | Xavier Enrique López-Bazo (Faculty of Economics, University of Barcelona); Burhan Can Karahasan (Istanbul Bilgi University,) |
| Abstract: | This paper tests the robustness of estimates of market access impact on regional variability in human capital, as previously derived in the NEG literature. Our hypothesis is that these estimates of the coefficient of market access, in fact, capture the effects of regional differences in the industrial mix and the spatial dependence in the distribution of human capital. Results for the Spanish provinces indicate that the estimated impact of market access vanishes and becomes non-significant once these two elements are included in the empirical analysis. |
| Keywords: | human capital, geography, market access, spatial dependence. JEL classification:C21, I21, R12, |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201102&r=geo |
| By: | Sheard, Nicholas (Dept. of Economics, Stockholm University) |
| Abstract: | Regional policies that seek to reduce economic inequalities between regions are common. These policies normally involve subsidies or transfers to the poorest regions. Over any given short-term horizon such subsidies serve to reduce inter-regional inequalities, but as they also affect migration patterns the long-term effects are less clear. This paper demonstrates using a three-region, general equilibrium model that subsidising the poorest region may be to the detriment of the periphery as a whole and even to the very region that receives the subsidy, if the subsidy draws firms away from a nearby region that would function better as a production centre. Though further research is needed to isolate the conditions under which such an effect would arise, the result has potentially important implications for the design of regional policy. |
| Keywords: | Regional policy; production externalities; agglomeration; multiregion model |
| JEL: | H29 R12 R13 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0011&r=geo |
| By: | Grimes, Arthur (Motu: Economic & Public Policy Research); Le Vaillant, Jason (Ministry of Economic Development, New Zealand); McCann, Philip (Waikato Management School, University of Waikato) |
| Abstract: | This paper examines one key theme of modern spatial economics relating to city development: Do the major cities within and across countries increasingly attract a disproportionate share of knowledge intensive economic activities? We describe trends in shares of knowledge intensive economic activities within five major New Zealand and five major Australian cities, and interpret these trends in light of modern economic geography theories. The paper is mainly descriptive, filling an information gap in relation to trends in knowledge intensity across New Zealand and Australian cities. We also compare developments in Auckland’s industry knowledge intensity with those in eight European comparator cities. Since 1991, Auckland’s share of employment within knowledge intensive sectors has increased at a faster pace than all four comparator New Zealand cities and all five Australian comparator cities. These trends indicate that intra-country agglomeration forces have more than offset the inter-country agglomeration forces for Auckland. However the other four New Zealand cities have experienced lower growth in their knowledge intensive sector shares than the five Australian cities, a result that is consistent with the existence of agglomeration forces acting across Australasia. |
| Keywords: | Agglomeration; knowledge intensity; Auckland |
| JEL: | R11 R12 |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nzmedo:2011_002&r=geo |
| By: | Fernanda Llussa; Jose Mario Lopes |
| Abstract: | We conduct a systematic study of the impact of European Union (EU) regional policies on regional economic growth that controls for national policies and geographic characteristics. Special care is taken in distinguishing between the impact of EU policies and of national policies on economic growth. Our empirical study tries to answer two different questions. First, is there convergence across EU regions, and if so, do regions converge to a common European steady-state or to a national one? Second, how do European and national policies affect regional growth? We find evidence of regional convergence at the national level but not at the European level. In addition we find that trade openness at the national level is associated with regional convergence while European regional policies contribute, though weakly, to regional convergence. Our results suggest that policies that foster market integration – and convergence to a common steady-state - such as the promotion of labour and capital movements across countries and common regulatory policies are as important for European-wide regional convergence as regional structural funds. JEL codes: D30, R11 |
| Keywords: | National Policies, European Union Policies, regional growth |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:unl:unlfep:wp554&r=geo |
| By: | Néstor Duch-Brown (University of Barcelona & IEB); Javier García-Estévez (University of Barcelona & IEB); Martí Parellada-Sabata (University of Barcelona & IEB) |
| Abstract: | This paper examines the main contributions of universities to the economic growth of Spanish regions. It calculates the separate effects of the different university functions on the regional economy, namely the creation of human capital, research and technology transfer. It includes a panel data set with the key variables of university activities and their effects on the economy at provincial level. The econometric estimations are based on information for all 47 public universities and include 34 Spanish provinces. The empirical results suggest that the growth of regional GVA is positively correlated to both the human capital created by universities and the stock of university patents |
| Keywords: | regional economic development, universities, higher education, human capital, research, technology development |
| JEL: | R15 I23 O18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/4/doc2011-6&r=geo |
| By: | Masashi Hoshino (Slavic Research Center, Hokkaido University and RIEB, Kobe University Research Institute for Economics and Business Administration, Kobe University) |
| Abstract: | This paper analyzes provincial GDP per capita disparities in China from 1979 to 2009. Provincial GDP per capita of official statistical materials have several problems such as data correctness and reliability, because the data are composed of the huji population and the changzhu population. The differences both population data are inter-province migration patterns. We compare result using our modified changzhu population GDP per capita data with results using official statistical materials. The empirical results as follows: (1) Previous studies since the 1990s have overestimated inter-province disparities; (2) inter-province disparities decrease from 2005; (3) Western region increase in intra-regional disparities since 2002. These results suggest that we should use provincial GDP per capita statistics more carefully. |
| Keywords: | Regional Disparities; GDP per capita; Statistics; China |
| JEL: | E01 O18 O53 R12 R23 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:kob:dpaper:dp2011-17&r=geo |
| By: | Swenson, David A. |
| Abstract: | This paper looks at practical limits to local foods production and consumption in the Upper Midwest. It presumes that local foods production makes the most sense, and has the greatest profit potential, in relatively close proximity to dense urban demand. The research demonstrates methods for determining county-level fresh fruit and vegetable production potentials for the states of Minnesota, Wisconsin, Illinois, Michigan, Indian, and Iowa in light of the distribution of metropolitan areas with 250,000 residents or more within or nearby the region. It also estimates the farm production-related total economic values that would accumulate were local foods production goals achieved in the region using input-output modeling tools. A state-only analysis was also conducted for Iowa using smaller metropolitan areas and a shorter viable distance-to-market threshold to apply the larger study’s insights in a manner that might guide state-level decision making. The research can be useful for helping to inform state policy developments as well as the location and extent of Cooperative Extension and other types of state and local services and production assistance designed to bolster or further investigate this emerging rural development topic. |
| Keywords: | local foods; impact analysis |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:32697&r=geo |
| By: | Francisco J. Delgado (University of Oviedo); Santiago Lago-Peñas (REDE, IEB and University of Vigo); Matías Mayor (University of Oviedo) |
| Abstract: | This paper studies the determinants of local tax rates. For the two main local taxes in Spain - the property tax and the motor vehicle tax - we test the existence of tax mimicking, yardstick competition and political trends in a sample of 2,713 municipalities. Using different spatial models, the results support the hypothesis of tax mimicking, with coefficients over 0.40. We also show the relevance of political variables such as the ideology of the incumbents and political fragmentation. The fact that incumbents with weaker political support display stronger mimicking behaviour is interpreted as evidence in favour of yardstick competition. Finally, we find incumbents mimic neighbouring municipalities ruled by the same political party, confirming the political trends hypothesis. |
| Keywords: | Local taxation, tax mimicking, yardstick competition, political trends |
| JEL: | C31 H71 H77 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/3/doc2011-4&r=geo |
| By: | J. Paul Elhorst (Faculty of Economics and Business, University of Groningen, The Netherlands); Katarina Zigova (Department of Economics, University of Konstanz, Germany) |
| Abstract: | Despite the prevalence of both competitive forces and patterns of collaboration within academic communities, studies on research productivity generally treat universities as independent entities. By exploring the research productivity of all academic economists employed at 81 universities and 17 economic research institutes in Austria, Germany, and German-speaking Switzerland, this study determines whether a research unit’s productivity depends on that of neighboring research units. The significant negative relationship that is found implies competition for priority of discovery among individual researchers, as well as the universities and research institutes that employ them. In addition, the empirical results support the hypotheses that collaboration and the existence of economies of scale increase research productivity. |
| Keywords: | Research productivity, Competition, Collaboration, Negative spatial autocorrelation, Geo-referenced point data |
| JEL: | C21 D85 I23 J24 R12 |
| Date: | 2011–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:knz:dpteco:1104&r=geo |
| By: | Vassilis Monastiriotis |
| Abstract: | This paper examines the regional growth process of the countries of Central and Eastern Europe since the start of their transition to market economies. It relates this to three distinctive explanations of regional growth and examines empirically their relevance in explaining the patterns of disparity and polarisation that have emerged in these countries over the last two decades. The collapse of communism and the early transition shock that followed created in many respects an experiment-like situation with a set of ‘initial conditions’ conducive for analysing patterns of convergence and divergence in the processes of national economic development and cross-national catch-up growth. The path to EU accession intensified the speed of these processes at the national level thus making the corresponding regional evolutions more marked. Our empirical analysis unveils a complex pattern of non-linear regional growth dynamics with convergence tendencies largely swaddled by processes of cumulative causation. Despite the process of national catch-up growth, regional evolutions are on the whole divergent, with a pattern of convergence at the middle- and lower-ends of the distribution and a slower tendency for club formation at the higher end, and thus overall an increasing trend of polarisation. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:33&r=geo |
| By: | Berliant, Marcus; Tabuchi, Takatoshi |
| Abstract: | We consider information aggregation in national and local elections when voters are mobile and might sort themselves into local districts. Using a standard model of private information for voters in elections in combination with a New Economic Geography model, agglomeration occurs for economic reasons whereas voter stratification occurs due to political preferences. We compare a national election, where full information equivalence is attained, with local elections in a three district model. A stable equilibrium accounting for both the economic and political sectors is shown to exist. Restricting to an example, we show that full information equivalence holds in only one of the three districts when transport cost is low. The important comparative static is that full information equivalence is a casualty of free trade. When trade is more costly, people tend to agglomerate for economic reasons, resulting in full information equivalence in the political sector. Under free trade, people sort themselves into districts, most of which are polarized, resulting in no full information equivalence in these districts. We examine the implications of the model using data on corruption in the legislature of the state of Alabama and in the Japanese Diet. |
| Keywords: | Information aggregation in elections; Informative voting; New economic geography; Local politics |
| JEL: | D82 D72 R12 |
| Date: | 2011–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29771&r=geo |
| By: | Néstor Duch-Brown (University of Barcelona & IEB); Javier García-Estévez (University of Barcelona & IEB) |
| Abstract: | Human capital, scientific research, and technology are the three chief mechanisms promoting knowledge spillovers from universities to firms. Based on a study of the impact of Spain’s 1983 University Reform Act (LRU), which opened the door to the foundation of new universities and faculties, this paper examines whether university (or faculty) location affects the creation of new firms within a given province. We conclude that the foundation of science and social science faculties has had a marked impact on the creation of firms. |
| Keywords: | universities, firm location, spillovers, poisson regression |
| JEL: | I23 O31 R12 R39 C23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2011/4/doc2011-7&r=geo |
| By: | Pablo D'Este; Frederick Guy; Simona Iammarino |
| Abstract: | Research collaborations between universities and industry (U-I) are considered to be one important channel of potential localised knowledge spillovers. These collaborations favour both intended and unintended flows of knowledge and facilitate learning processes between partners from different organisations. Despite the copious literature on localised knowledge spillovers, still little is known about the factors driving the formation of U-I research collaborations and, in particular, about the role that geographical proximity plays in the establishment of such relationships. Using collaborative research grants between universities and business firms awarded by the UK Engineering and Physical Sciences Research Council (EPSRC), in this paper we disentangle some of the conditions under which different kinds of proximity contribute to the formation of U-I research collaborations, focussing in particular on technological complementarity among the firms participating in such partnerships. |
| Keywords: | university-industry research collaborations, proximity, geography, industrial clustering, technological complementarity |
| JEL: | O31 O32 O33 R10 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1106&r=geo |
| By: | Andrew T. Young (College of Business and Economics, West Virginia University); Matthew J. Higgins (College of Management, Georgia Institute of Technology); Daniel Levy (Department of Economics, Bar-Ilan University; Department of Economics, Emory University; RCEA) |
| Abstract: | We use U.S. county-level data containing 3,058 cross-sectional observations and 41 conditioning variables to study economic growth and explore possible heterogeneity in growth determination across 32 individual states. Using a 3SLS-IV estimation method, we find that all statistically significant convergence rates (for 32 individual states) are above 2 percent, with an average of 8.1 percent. For 7 states the convergence rate can be rejected as identical to at least one other state’s convergence rate with 95 percent confidence. Convergence rates are negatively correlated with initial income. The size of government at all levels of decentralization is either unproductive or negatively correlated with growth. Educational attainment has a non-linear relationship with growth. The size of the finance, insurance and real estate, and entertainment industries are positively correlated with growth, while the size of the education industry is negatively correlated with growth. Heterogeneity in the effects of balanced growth path determinants across individual states is harder to detect than in convergence rates. |
| Keywords: | Economic Growth, Conditional Convergence, County Level Data |
| JEL: | O40 O11 O18 O51 R11 H50 H70 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:18_11&r=geo |
| By: | Florence Goffette-Nagot (Université de Lyon, Lyon, F-69003, France ; CNRS, GATE Lyon St Etienne, Ecully, F-69130, France); Yves Schaeffer (CEMAGREF de Grenoble, Saint-Martin-d'Hères cedex, F-38402) |
| Abstract: | This paper focuses on residential sorting by social and ethnic status in large French urban areas. Our objective is to assess the relative importance of two major determinants of segregation stressed by the economic literature (Bartolome and Ross, 2003 ; Brueckner et al., 1999) : (i) “Alonso sorting over space”, due to the trade-off between land consumption and accessibility to the central city and (ii) “Tiebout sorting over jurisdictions”, due to the taste for local public goods and by extension for all kinds of local public amenities (e.g. neighborhood externalities). Our methodology draws on Schmidheiny (2006). First, a conditional logit model is estimated for each urban area, in which moving households are assumed to sort based on jurisdiction distance to the central city and jurisdiction mean of households’ incomes (as a proxy for the level of public amenities). Second, our estimation results are used to simulate the counterfactual residential patterns that would prevail if, alternatively, one or the other of these mechanisms were inactive (setting the coefficients of the corresponding variables to zero). The contribution of each mechanism to the observed social and ethnic segregation is finally appreciated by comparing the values of dissimilarity indexes computed on the basis of the counterfactual households distributions and on the observed households distribution. “Tiebout-sorting” emerges as the primary cause of social segregation among wage-earning households. On the contrary, “Alonso-sorting” appears to be the main driver of segregation between economically active and inactive households, as well as between Frenchcitizen and Foreign-citizen households. |
| Keywords: | Income segregation, Ethnic segregation, Suburbanization, Local amenities, Migrations, Conditional logit, French urban areas |
| JEL: | R R R |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1112&r=geo |
| By: | Xavier Peter Claeys (Faculty of Economics, University of Barcelona) |
| Abstract: | Devolution of political power is constantly on the political agenda in both Italy and Spain. Fiscal policy in these countries has granted specific privileges to some regions. Valle d’Aosta/Vallée d’Aoste (VdA) and País Vasco/Euskadi (PV) have an extensive say over spending decisions, and receive nearly all regional tax revenues. Although both VdA and PV are among the richest regions in each country, both are net beneficiaries of the fiscal equalisation system. This preferential treatment is the outcome of a fiscal system with limits on taxing power and debt issuance, and is meant as a compensation for the lack of autonomy. It so prevents calls for more fiscal autonomy, or even outright secession. The economic effects of this asymmetric federalism are negative. Although partial equalisation reduces excessive redistribution built in the fiscal equalisation system, more autonomy could pay off with more efficient government. Asymmetric federalism moreover creates a political impasse in the negotiation of a more efficient tax system and financing arrangement. |
| Keywords: | fiscal federalism, equalisation, secession, Valle d’Aosta, País Vasco. JEL classification:H70, H73, H77 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201101&r=geo |