nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒05‒30
twenty-two papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The competitiveness of regions. A comparison between Belgian and German regions By Joep Konings; Luca Marcolin
  2. Patterns in U.S. urban growth (1790–2000) By González-Val, Rafael; Lanaspa, Luis
  3. Regional growth and unemployment. The validity of Okun's law for the Finnish regions By Kangasharju, A.; Tavera, C.; Nijkamp, P.
  4. Transportation, freight rates, and economic geography By Kristian Behrens; Pierre M. Picard
  5. Economic growth and the balance-ofpayments constraint: The case of the Spanish regions, 1988-2008 By Oscar Bajo-Rubio; Carmen Díaz-Roldán
  6. A Schumpeterian model of entrepreneurship, innovation, and regional economic growth By Batabyal, A.A.; Nijkamp, P.
  7. Is New Economic Geography Right? Evidence from Price Data By Jessie Handbury; David E. Weinstein
  8. Measuring regional creative capacity: A literature review for rural-specific approaches By Gulumser, A.A.; Baycan, T.; Nijkamp, P.
  9. Geographical information systems technologies for spatial visualization of statistical data By Dardala, Marian; Reveiu, Adriana
  10. External Benefits of Brownfield Redevelopment: An Applied Urban General Equilibrium Analysis By Niels Vermeer; Wouter Vermeulen
  11. New Business Formation and Regional Development: A Survey and Assessment of the Evidence By Michael Fritsch
  12. Urban patterns, population density and optimal city dimension: The case of public infrastructure By Prieto, Ángel; Zofío, José Luis; Álvarez, Inmaculada
  13. Comparing estimation methods for spatial econometrics techniques using R. By Bivand, Roger
  14. The Comparative Political Economy of Economic Geography By Wiberg, Magnus
  15. Equity in the City: On Measuring Urban (Ine)Quality of Life By Marco Giovanni Brambilla; Alessandra Michelangeli; Eugenio Peluso
  16. Functional labor markets in Belgium: Evolution over time and intersectoral comparison By Damiaan Persyn; Wouter Torfs
  17. Creative capacity for sustainable development: A comparative analysis of European and Turkish rural regions By Akgun, A.A.; Baycan, T.; Nijkamp, P.
  18. Exploiting Parallelization in Spatial Statistics: an Applied Survey using R. By Bivand, Roger
  19. Taxes, agglomeration rents and location decision of firms By Karen Crabbe; Karolien De Bruyne
  20. Urban sustainability and community development: Creating healthy sustainable urban communities By Malo André Hutson
  21. Spatial organization of production in India: contesting themes and conflicting evidence By Roy, Satyaki
  22. Strangers on the move. Ethnic entrepreneurs as urban change actors By Kourtit, K.; Nijkamp, P.

  1. By: Joep Konings; Luca Marcolin
    Abstract: This paper uses firm level data to analyze the regional competitiveness of two federal Euro area countries, Belgium and Germany. Competitiveness is defined as the labor cost per unit of output and hence takes into account productivity differences. Analyzing regional competitiveness is important because of the regional concentration in economic activity, the unequal spatial development of regions within countries and the increased importance of regional policy both at the EU as at the national level.
    Date: 2011
  2. By: González-Val, Rafael; Lanaspa, Luis
    Abstract: This paper reconsiders the evolution of the growth of American cities since 1790 in the light of new theories of urban growth. Our null hypothesis for long-term growth is random growth. We obtain evidence supporting random growth against the alternative of mean reversion (convergence) in city sizes using panel unit root tests. We also examine mobility within the distribution to try to extract growth patterns different from the general unit root trend detected. We find evidence of high mobility when we model growth as a first-order Markov process. Finally, using a cluster procedure we find strong evidence in favour of conditional convergence in city growth rates within convergence clubs, which we can interpret as “local” mean-reverting behaviours. Both the high mobility and the results of the clustering analysis seem to indicate a sequential city growth pattern.
    Keywords: city size; urban growth; random growth; sequential city growth; transition matrices; club convergence
    JEL: O18 C12 R12 R11
    Date: 2011–05–20
  3. By: Kangasharju, A.; Tavera, C.; Nijkamp, P.
    Date: 2011
  4. By: Kristian Behrens (Canada Research Chair, Department of Economics, Universite du Quebec a Montreal (uqam)); Pierre M. Picard (crea, Universite du Luxembourg, Luxembourg; and core, Universite catholique de Louvain, Belgium)
    Abstract: We investigate the role of competitive transport markets in shaping the location of economic activity and the pattern of trade. In our model, carriers supply transport services for shipping man- ufactured goods, and freight rates are set to clear transport markets. Each carrier must commit to the maximum capacity for a round-trip and thus faces a logistics problem as there are opportunity costs of returning empty. These costs increase the freight rates charged to firms located in regions that are net exporters of manufactured goods. Since demand for transport services depends on the spatial distribution of economic activity, the concentration of production in one region raises freight rates to serve foreign markets from there, thus working against specialization and the agglomera- tion of firms. Consequently, a more even spatial distribution of firms and production prevails at equilibrium when freight rates are endogenously determined than when they are assumed to be exogenous as in the literature.
    JEL: F12 R12
    Date: 2011
  5. By: Oscar Bajo-Rubio (Universidad de Castilla-La Mancha); Carmen Díaz-Roldán (Universidad de Castilla-La Mancha)
    Abstract: The balance of payments can act as a constraint to the rate of growth of output, on putting a limit to the growth in the level of demand to which supply can adapt. This effect might be even stronger for regional economies, presumably more integrated among them. In this paper, we examine this issue for the case of the Spanish regions over the period 1988-2008, and calculate their balance of payments-constrained growth rates. By comparing these balance of payments-constrained growth rates with the actual growth rates, we would be able to assess whether the balance of payments has worked as a constraint to economic growth for the Spanish regional economies in the period analyzed.
    Keywords: Economic growth, External deficit, Spanish regions
    JEL: F41 F43 O40
    Date: 2011–05
  6. By: Batabyal, A.A.; Nijkamp, P.
    Date: 2011
  7. By: Jessie Handbury; David E. Weinstein
    Abstract: The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index. Despite his Nobel Prize, there have been no tests of this idea. This paper represents the first such test. Using a rich dataset covering 10-20 million purchases of grocery items, we find that after controlling for store and shopping effects: 1) Aggregate grocery prices are lower in larger cities; 2) Residents of larger cities have access to substantially more varieties than residents of smaller cities; and 3) These forces combine to substantially lower variety adjusted prices in large cities. In short, Krugman was right.
    JEL: L81 R12 R13
    Date: 2011–05
  8. By: Gulumser, A.A.; Baycan, T.; Nijkamp, P.
    Date: 2011
  9. By: Dardala, Marian; Reveiu, Adriana
    Abstract: This paper proposes an original solution to present statistical data using the facilities provided by the Geographical Information Systems, to improve the means of statistical data figure and distribution inside the territorial profile. The proposed solution allows to represent more statistical data sets, on the same map, using two different methods of data representation: using a color ramp to represent the territorial distribution of an aggregate indicator and a set of charts overlapped to represent the proportions of the variables that form the indicator.
    Keywords: Geographical Information Systems; Spatial Visualization; ArcObjects; Cartograms
    JEL: R12
    Date: 2011–05–02
  10. By: Niels Vermeer; Wouter Vermeulen
    Abstract: <p>This paper models external benefits of the transformation of an inner city industrial site into a residential area in an urban general equilibrium framework</p><p>Does brownfield redevelopment warrant government support?</p><p>We model external benefits of the transformation of an inner city industrial site into a residential area in an urban general equilibrium framework, focussing on the removal of a local nuisance, the exploitation of agglomeration economies and preservation of open space at the urban fringe. These benefits are compared to the value of transformed land, which accrues to the developer.</p><p>A numerical application indicates that local nuisance and agglomeration effects may push social returns significantly beyond these private returns. However, depending on the price elasticity of local housing demand, the amount of preserved greenfield land may be small and it only generates additional benefits to the extent that direct land use policies fail to internalize its value as open space.</p>
    JEL: R13 R21 R52
    Date: 2011–05
  11. By: Michael Fritsch
    Abstract: This paper reviews the current state of knowledge about the effect of new business formation on regional development. After a brief sketch of the origins of research on this issue, the main results of different lines of inquiry are discussed. Main issues are the development of start-up cohorts, the relative magnitude of direct and indirect effects, and results by type of entry and by industry, as well as differences in the effects that have been found for different types of regions. After interpreting the results based on a common framework, I put forward a number of important questions for further research and draw some conclusions for entrepreneurship policy.
    Keywords: Entrepreneurship, new business formation, employment regional development
    JEL: L26 M13 O1 O18 R11
    Date: 2011
  12. By: Prieto, Ángel (Instituto de Recursos Naturales y Agrobiología, Salamanca, Spain); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Álvarez, Inmaculada (Departamento de Análisis Económico (Teoría e Historia Económica). UAM)
    Abstract: Determination of the optimal city size underlies the economic rationality of infrastructure provision by local governments. We investigate the existence of decreasing average costs resulting from economies of scale, associated with larger urban dimensions in terms of population and housing, and economies of density, brought about by reductions in urban dispersion, and calculate optimal population densities when providing basic infrastructure. The methodology relies on novel definitions of scale and density economies and their estimation by way of flexible translog cost functions, extensively applied in the literature dealing with the provision of services—i.e., utilities, but extended here to their supporting infrastructure. Our results unveil the existence of latent economies of scale and density resulting in a cost excess in the provision of infrastructure due to the effect of urban sprawl that translates into suboptimal city sizes. Based on these findings several policy guidelines rationalizing urban development are suggested. The model is illustrated using Spanish statistical data collected from the nationwide local infrastructure and equipment survey, and prices from a new database that uses engineering cost benchmarks.
    Keywords: Urban patterns; Optimal urban density; Scale and density economies; Translog cost function.
    JEL: C3 D24 H1 H4 R53
    Date: 2010–11
  13. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Recent advances in spatial econometrics model fitting techniques have made it more desirable to be able to compare results and timings. Results should correspond between implementations using different applications, while timings are more readily compared within a single application. A broad range of model fitting techniques are provided by the contributed R packages for spatial econometrics. These model fitting techniques are associated with methods for estimating impacts and some tests, which will also be presented and compared. This review constitutes an up-to-date demonstration of techniques now available in R, and mentions some that will shortly become more generally available.
    Keywords: Spatial autoregression; Econometric software.
    JEL: C13 C21 C87
    Date: 2010–10–06
  14. By: Wiberg, Magnus (Ministry of Finance)
    Abstract: This paper examines how different electoral rules affect the lo- cation decisions of firms through the effect on regional policy. The equilibrium location of industry in the economically smaller (larger) region is higher under majoritarian (proportional) elections. The stan- dard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the smaller region is increasing in the level of regional integration. As trade is in- creasingly liberalized, the economy features a reversed core-periphery equilibrium. This result holds under both electoral rules. However, firms locate to the smaller region at a relatively higher rate in the case of majoritarian voting, hence, the reversed equilibrium occurs for a relatively lower level of regional integration with majoritarian elections. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instru- mental variable strategy that accounts for the potential endogeneity of the electoral rule.
    Keywords: Economic Geography; Regional Policy; Electoral Rules
    JEL: D72 F12 R12
    Date: 2011–05–08
  15. By: Marco Giovanni Brambilla; Alessandra Michelangeli; Eugenio Peluso (DISCE, Università Cattolica)
    Abstract: We merge contributions from the New Urban Economics and inequality measurement to assess quality of life (QOL) in a given city. We take the point of view of a city planner in favor of an even accessibility to amenities within the city. Instead of the average value of amenities computed in the Roback (1982) QOL index, our index captures the value of its multidimensional "certainty equivalent". We apply this methodology to derive a QOL index for the city of Milan.
    Keywords: Urban quality of life, amenities, hedonic prices, inequality index, just city.
    JEL: D63 H4 R1 R2
    Date: 2011–05
  16. By: Damiaan Persyn; Wouter Torfs
    Abstract: This paper applies the Bond and Coombes (2007) algorithm to construct Travel-to-Work Areas for Belgium. We study how these functional labor markets evolved between 1981 and 2001 and find that the number of distinct regional labor markets decreased over time. For 2007, sector-specic Travel-to-Work Areas are constructed. The results reveal that the size of a sectors labor market increases with its degree of technological intensity.
    Date: 2011
  17. By: Akgun, A.A.; Baycan, T.; Nijkamp, P.
    Date: 2011
  18. By: Bivand, Roger (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: Computing tasks may be parallelized top-down by splitting into per-node chunks when the tasks permit this kind of division, and particularly when there is little or no need for communication between the nodes. Another approach is to parallelize bottom-up, by the substitution of multi-threaded low-level functions for single-threaded ones in otherwise unchanged user-level functions. This survey examines the timings of typical spatial data analysis tasks across a range of data sizes and hardware under different combinations of these two approaches. Conclusions are drawn concerning choices of alternatives for parallelization, and attention is drawn to factors conditioning those choices.
    Keywords: Statistical software; Parallelization; Optimized linear algebra subroutines; Multicore processors; Spatial statistics.
    JEL: C12 C13 C87 C88
    Date: 2010–10–06
  19. By: Karen Crabbe; Karolien De Bruyne
    Abstract: The goal of this paper is to analyse the impact of interactions between tax rates and agglomeration rents on location decisions of firms within Belgium. In the theoretical literature it is argued that both location determinants may weaken each other’s impact. Using the number of new firms at the sector level for 43 Belgian districts, we show that local effective tax rates either have no or a negative impact on location decisions. Moreover, both types of agglomeration rents in a district are important for location decisions. The presence of firms in a district attracts new firms, while the presence of firms in the same sector deters firm entry due to competition. However, the interaction effect between taxes and agglomeration rents on firm entry is significant. We show that a higher effective tax rate in a district weakens the positive impact of the agglomeration rents on location decisions of firms.
    Date: 2011
  20. By: Malo André Hutson
    Abstract: Increased urbanization has also led to many challenges for urban residents. In the United States, land use and zoning, transportation and infrastructure, lack of affordable housing, and disinvestment have severely affected the quality of life of poor urban populations. Despite these challenges, opportunities do exist to make economically disadvantaged urban communities more sustainable, livable, and healthy. This working paper discusses the challenges facing urban communities and then considers the opportunities that exist to develop sustainable urban communities given our current economic climate.
    Keywords: Community development ; Urban economics
    Date: 2011
  21. By: Roy, Satyaki
    Abstract: The emergence of space as a determinant in the functional relations linked to production and growth is a recent development in theories of industrial organization. This paper primarily reviews the contesting themes in explaining changes in relative importance of space. In reference to industrial clusters in India, the paper argues that it is the heterogeneity of the industrial organizations that captures ‘space’ as an analytical category and broad generalizations often do not address the spatial dimensions. Neither also is it true, at least for developing countries such as India, that small enterprise clusters always reflect the post-Fordist dimension of change in the production organization. In the context of global production chain, this paper further argues that participation in such value chains might lead to contradictory outcomes in production organization giving rise to increased rift between the ‘global’ and the ‘local’.
    Keywords: endogenous growth; region; technology; fragmentation; footloose industry
    JEL: L23 R12 O12
    Date: 2011–04
  22. By: Kourtit, K.; Nijkamp, P.
    Date: 2011

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