nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒06‒04
six papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Contribution of Local Agglomeration Economies to Productive Efficiency: Stochastic Frontier Estimation with Establishment-level Data on Japanese Manufactures (Japanese) By NAKAMURA Ryohei
  2. How sustainable are processes of social and spatial differentiation in Santiago de Chile? Current situation and future scenarios for social inclusion By Hölzl, Corinna; Krellenberg, Kerstin; Heinrichs, Dirk; Welz, Juliane; Kabisch, Sigrun
  3. Small retailing, town centres and inland territories: An “Extended Town Centre Management” perspective By Musso, Fabio
  4. Tests for Convergence Clubs By Corrado, L.; Weeks, M.
  5. Urban Density, Human Capital, and Productivity: An empirical analysis using individual wage data (Japanese) By MORIKAWA Masayuki
  6. Industrial Agglomeration and Labor Market Pooling (Japanese) By NAKAJIMA Kentaro; OKAZAKI Tetsuji

  1. By: NAKAMURA Ryohei
    Abstract: There are two types of local industrial agglomeration of economic activity. One is the clustering of like-kind businesses—small and medium-sized companies, plants, and other types of establishments belonging to the same industrial group—in a specific geographic area. The other is the agglomeration of individuals, typically, employees of a large-scale company. The former type of agglomeration relates to localization economies, whereas the latter relates to scale economies arising from the size of operations.<br /><br />It is usually difficult to distinguish the effects of these two types of agglomeration when we use aggregated data, such as those aggregated at the regional level. Also, such regionally aggregated data do not allow us to capture differences in the extent to which each establishment benefits from agglomeration. Most of the previous studies on agglomeration economies and productivity have failed to properly discern the effects of agglomeration at the establishment level.<br /><br />This study focuses on the effects of local agglomeration on productivity, taking into account the spatial distribution of the size of establishments within a certain geographic area. The data set used in this study is comprised of four-digit establishment-level data on Japanese manufactures for 2005. The use of establishment-level data in estimating a frontier production function enables us to identify various agglomeration effects. In this study, we focus on traditional industries and high-tech industries, both of which tend to benefit from localization economies. The estimation model is based upon the stochastic frontier production function approach, in which we examine what type of local agglomeration contributes to the improvement of productive efficiency. The estimation results point to the effectiveness of industrial cluster policy as a means to generate agglomeration economies.
    Date: 2011–04
  2. By: Hölzl, Corinna; Krellenberg, Kerstin; Heinrichs, Dirk; Welz, Juliane; Kabisch, Sigrun
    Abstract: This discussion paper presents a methodological approach to sustainability indicators and scenarios that evolved within the framework of the interdisciplinary and application-oriented Risk Habitat Megacity research initiative on sustainable urban development in Santiago de Chile. The aim of this discussion paper is to support regional and local planning authorities and political decision-makers in the area of housing and other urban policy fields. It will be shown how the approach was contextualized in order to contribute to the ongoing debate on methodological approaches to social sustainability and to the policy-related understanding of socio-spatial differentiation trends and their implications for social inclusion. --
    Date: 2011
  3. By: Musso, Fabio
    Abstract: This paper aims to analyze the public policies that can be adopted in order to support small retail firms located in town centers and countryside small towns. The role of small retailing has been recognized for the preservation of an economic, social and cultural identity of both town centers and rural/mountain areas. The field of this analysis is more extended than that covered by the Town Centre Management (TCM) literature, that is mainly focused on city centers. In this case the study is also addressed to smaller towns and inland areas. A case study of an Italian province has been conducted with the objective to underline the main factors that need to be considered by local administrators for the adoption of coordinated policies.
    Keywords: Town Center Management; small retailing; urban planning; rural development
    JEL: R50 O21
    Date: 2011
  4. By: Corrado, L.; Weeks, M.
    Abstract: In many applications common in testing for convergence the number of cross-sectional units is large and the number of time periods are few. In these situations tests which are founded upon an omnibus null hypothesis are characterised by a number of problems. In this paper we consider a broad class of tests of convergence based on multivariate time series and panel data methodologies, and track a gradual progression away from tests based on an omnibus null, to sequential tests and tests that are founded upon multiple pairwise comparisons. In a previous study Corrado, Martin and Weeks (2005) test for regional convergence across the European Union allowing for an endogenous selection of regional clusters using a multivariate test for stationarity. Given that the time series are relatively short, there are potential problems in basing inference on asymptotic results for stationarity tests. To circumvent this problem we bootstrap the stationarity test and explore the robustness of the cluster outcomes. In general our results show that the size distortion which aicts the asymptotic tests, and resulting in a bias towards nding less convergence, is resolved when we apply the bootstrap generated critical values. To interpret the composition of the resulting convergence clusters, the latter are tested against a variety of possible groupings suggested by recent theories and hypotheses of regional growth and convergence.
    Keywords: Multivariate stationarity, bootstrap tests, regional convergence
    JEL: C51 R11 R15
    Date: 2011–01–26
  5. By: MORIKAWA Masayuki
    Abstract: A large number of studies have indicated that densely populated cities enhance the productivity of workers through knowledge spillover and a better matching with employers in the labor market. This paper quantitatively analyzes the relationship among urban density, human capital, and wages by using micro-data from the <i>Basic Survey on Wage Structure</i> for the years from 1990 to 2009. According to the estimation of standard wage functions augmented with population density, a relatively higher agglomeration wage premium is observed for several service sectors, including the wholesale and retail industries. The agglomeration premium is larger for workers with higher observable skills such as education, tenure, and potential experience, which suggests rapid learning and a better matching in the densely populated cities. Under structural changes such as a declining population and trend toward a knowledge-based service economy, forming densely populated areas by facilitating the migration of workers has desirable effects on both individual wages and firm productivity throughout Japan.
    Date: 2011–04
  6. By: NAKAJIMA Kentaro; OKAZAKI Tetsuji
    Abstract: This paper empirically investigates the effect of industrial agglomeration through labor market pooling. Theoretical literature has shown that labor market pooling in industrial agglomeration can enhance expected profitability of firms by ironing out the firm-level idiosyncratic shocks, and recently Overman and Puga (2009) tested this theoretical hypothesis empirically, using data from the UK. Following Overman and Puga, we measured the magnitude of plant-level idiosyncratic shocks by industry, using the micro-data from the Manufacturing Census of Japan, and examined how it relates to the extent of plant agglomeration. It was confirmed that the magnitude of idiosyncratic shocks is positively associated with the extent of agglomeration of industries, and that this relationship is robust even if we control for other agglomeration factors, i.e., input-sharing and first nature. These results suggest that industrial agglomeration indeed enhances profitability through labor pooling in contemporary Japan.
    Date: 2011–03

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