nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒07‒13
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Spatial econometrics of innovation: Recent contributions and research perspectives By Corinne Autant-Bernard
  2. Firms Location under Demand Heterogeneity By Pierre M. Picard; Toshihiro Okubo
  3. “Geography of talent and regional differences in Spain” By Ebru Kerimoglu; Burhan Can Karahasan
  4. University quality, interregional brain drain and spatial inequality. The case of Italy. By Ciriaci, Daria
  5. Innovation, Growth and Quality of Life: a Theoretical Model and an Estimate for the Italian Regions By d'Agostino, Giorgio; Scarlato, Margherita
  6. Second-Best Cost?Benefit Analysis with a Microfoundation of Urban Agglomeration By Yoshitsugu Kanemoto
  7. A Matter of Time: Revisiting Growth Convergence in Developing Countries By Andersson, Fredrik N. G.; Edgerton, David; Opper, Sonja
  8. Distortions in Cross-Sectional Convergence Analysis when the Aggregate Business Cycle is Incomplete By Stefano Magrini; Margherita Gerolimetto; Hasan Engin Duran
  9. Development perspectives for the City of Hamburg: Migration, commuting, and specialization By Boje, Amelie; Ott, Ingrid; Stiller, Silvia
  10. Agglomeration Economies and Local Comovement of Stock Returns By Fu, Shihe; Shan, Liwei
  11. Are the U.S. farm wages equalizing? Markov chain approach By Temel, Tugrul
  12. Understanding the lead/lag structure among regional business cycles By Stefano Magrini; Margherita Gerolimetto; Hasan Engin Duran
  13. Disaggregate fluctuations in the US farm output: Testing for convergence By Temel, Tugrul
  14. Implications of rising energy and transportation costs for future urban development: Inner city trends in Hamburg By Otto, Alkis Henri
  15. Spatial Patterns of Growth and Poverty Changes in Peru (1993 – 2005) By Escobal, J., Ponce, C.

  1. By: Corinne Autant-Bernard (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure de Lyon)
    Abstract: Preliminary introduced by Anselin, Varga and Acs (1997) spatial econometric tools are widely used in economic geography of innovation. Taking into account spatial autocorrelation and spatial heterogeneity of regional innovation, this paper analyzes how these techniques have improved the ability to quantify knowledge spillovers, to measure their spatial extent, and to explore the underlying mechanisms and especially the interactions between geographical and social distance. It is also argued that the recent developments of spatio-dynamic models opens new research lines to investigate the temporal dimension of both spatial knowledge flows and innovation networks, two issues that should rank high in the research agenda of the geography of innovation.
    Keywords: Geography of innovation; spatial correlation; spatio-dynamic panels; innovation
    Date: 2011–06–30
  2. By: Pierre M. Picard (CREA, University of Luxembourg (Luxembourg), and CORE, Université catholique de Louvain (Belgium).); Toshihiro Okubo (RIEB, Kobe University)
    Abstract: In this paper we build an economic geography model where firms sell product varieties with heterogenous demands. We show that firms selling the products with higher demands select to set up their plants in larger countries. Larger countries do not only get better access to more varieties but also to the most demanded and valuable ones. The impact of such a spatial selection on firms' location choice depends on the skewness of the distribution of demand intensity across varieties. In a model where only capital moves across regions, demand heterogeneity generally diminishes the amount of capital invested in the larger country. In a model where the work force moves across regions, demand heterogeneity is shown to eliminate dramatic changes in the location patterns and to result in the asymmetric dispersion of workers, rather their symmetric dispersion or complete agglomeration in a specific region.
    Keywords: heterogeneous taste and quality, spatial selection, economic geography, agglomeration, home market effect
    JEL: F12 F15 R11 R12
    Date: 2011
  3. By: Ebru Kerimoglu (Istanbul Technical University, Department of Urban and Regional Planning); Burhan Can Karahasan (Istanbul Bilgi University, Department of International Finance)
    Abstract: Tentative empirical evidence suggests that the agglomeration of talent contributes to regional development. However, given that talented people are not evenly distributed across regions, this paper seeks to determine how the concentration of talent affects patterns of regional development. Here, we empirically evaluate the effects of the distribution of talent on regional differences by means of a detailed analysis of the 17 Autonomous Communities of Spain between 1996 and 2004. We hypothesise that regions specialising in strategic sectors that are creative and which can be assumed to enjoy rapid growth in productivity will experience faster rates of development and, in turn, that this concentration of talent will have a positive impact on the region’s economic performance. Thus, we believe that this mechanism can explain the marked regional imbalances in Spain. Our findings confirm that regional differences, measured in terms of GDP per capita and by, - industrial and service- oriented production, are influenced by the Communities’ talent bases as determined by, educational attainment and employment in assumed to be strategic for regional development, inasmuch as these sectors provide economic specialization.
    Keywords: Talent, Regional differences, Panel data, Spain. JEL classification: C33, O18, R11, J24.
    Date: 2011–06
  4. By: Ciriaci, Daria
    Abstract: Universities are increasingly recognized as key driver of economic development through their role in knowledge production and human capital accumulation, and as attraction poles for talents. That is why this paper analyses the sequential migration behaviour of Italian students-graduates before their enrolment at university, and after graduation, and the role that university quality has in these choices. From a regional development perspective, a better understanding of the causes of Italian interregional brain drain may help to guide policy intervention aimed at reversing or partially compensating for its negative effects on the source regions. The results confirm ‘university quality’ as a «supply» tool for policy makers to counterbalance the negative effects of the brain drain on human capital accumulation.
    Keywords: Brain-drain; labour mobility; university quality; regional economic disparities.
    JEL: R58 J61 R23
    Date: 2009–12–06
  5. By: d'Agostino, Giorgio; Scarlato, Margherita
    Abstract: ABSTRACT. This paper carries out an explanatory investigation into the relationship between socio-institutional conditions, quality of life indicators and economic growth in the Italian regions. Previous studies stress the importance of institutional quality, social capital and social conditions in determining disparities between richer and poorer regions. Building on this literature, we consider a three-sector model of semi-endogenous growth with negative externalities depending on structural and institutional factors that affect the innovative capacity of regional systems (the “social externalities hypothesis”). Simulations based on the scaled stationary system confirm that endogenous socio-economic conditions are crucial for the successful translation of innovation into economic growth. It is suggested that generating a development strategy designed to improve social conditions and well-being in the poorer regions may yield dividends in terms of the effectiveness of public policy and economic development.
    Keywords: Development; growth; regional disparities; well-being
    JEL: R58 O10 O30 C23 C61 R11 O40
    Date: 2011–06–28
  6. By: Yoshitsugu Kanemoto (National Graduate Institute for Policy Studies)
    Abstract: Many sources of urban agglomeration, such as the gains from variety, bette rmatching, and knowledge creation and diffusion, involve departures from the first-best world. Benefit evaluation of a transportation project must then take into account changes in excess burden along with any direct user benefits. A number of economists have addressed this issue, and policymakers in some countries, such as in the United Kingdom, have been attempting to include these considerations in their project assessments. By modeling the microstructure of agglomeration economies, we derive second-best benefit evaluation formulae for urban transportation improvements. Previous work has investigated the same problem, but without explicitly modeling the sources of agglomeration economies. Accordingly, our analysis examines whether earlier results remain valid when monopolistic competition with differentiated products provides the microfoundation of the agglomeration economies. By explicitly introducing the rural sector and multiple cities, we also show that the agglomeration benefits depend on where the new workers are from.
    Keywords: cost-benefit analysis; agglomeration economies; monopolistic competition;new economic geography; second-best economies
    Date: 2011–05
  7. By: Andersson, Fredrik N. G. (Department of Economics, Lund University); Edgerton, David (Department of Economics, Lund University); Opper, Sonja (Department of Economics, Lund University)
    Abstract: We propose a new methodology for testing inter-regional growth convergence in developing countries. Labor surplus economies are typically characterized by large inter-regional short-term growth fluctuations, which tend to mask long-term growth trends. These fluctuations render standard tests for growth convergence unreliable. A frequency domain analysis that separates between short and long-run growth offers new insights. We develop a growth model and provide an empirical application using provincial data from China covering the period 1978 - 2009. Our results suggest that provinces diverge over the short-term. Over the long term, however, provinces cluster into two growth clubs of converging provinces.
    Keywords: regional convergence; developing countries; growth; China
    JEL: O14 O33 O41 R11
    Date: 2011–07–04
  8. By: Stefano Magrini (Department of Economics, University Of Venice Cà Foscari); Margherita Gerolimetto (Department of Economics, University Of Venice Cà Foscari); Hasan Engin Duran (Department of Economics, University Of Venice Cà Foscari)
    Abstract: One of the most important drawbacks of the existing literature on convergence is that it largely ignores the effect of aggregate fluctuations on the evolution of income disparities. To the extent that regional income disparities follow a distinct cyclical pattern in the short-run, moving either pro- or counter-cyclically, the period of analysis should be chosen with great care. Failing to do so might in fact lead to an overestimation of the tendency towards either convergence or divergence, depending on the type of short-run cyclical pattern followed by the disparities and on which cycle phases are over-represented within the period being analyzed. In this paper, we use the distribution dynamics approach to show that the distortion introduced when the period of analysis contains incomplete business cycles could be quite sizeable and then analyze convergence among 48 conterminous US states over a appropriately chosen period (1989-2007) that includes only complete cycles.
    Keywords: Convergence, Regional disparities, Business cycle, Distribution dynamics
    JEL: O40 R10 E32 C14
  9. By: Boje, Amelie; Ott, Ingrid; Stiller, Silvia
    Abstract: This paper disentangles the single effects of increasing transportation costs on the arising economic structure and applies them to the regional level of the metropolis of Hamburg. Therefore we begin with a general indexing of the metropolis Hamburg in the context of Germany's ten biggest cities according to some key economic variables. Of major importance are issues of migration, commuting as well as structural change and regional specialization. As will become apparent all these aspects are differently affected by (changing) transportation costs and it is finally the interplay of different forces that shapes the future structure and hence the economic success of the metropolis. From the viewpoint of private individuals, increasing transportation costs affect the outweighing of commuting from home to the working place versus migration. Focusing on the production site, not only direct but also indirect effects that arise from horizontal or vertical relationships gain importance. --
    Date: 2010
  10. By: Fu, Shihe; Shan, Liwei
    Abstract: Existing studies in finance have documented the comovement of stock returns of companies headquartered in the same location. The interpretation is that local investors have a “local bias” due to an information advantage on local companies. This paper argues that localized agglomeration economies affect the fundamentals of local companies, resulting in the local comovement of stock returns. Using the data for China A-share listed companies from 1997-2007, we confirm the local comovement of stock returns of companies headquartered in the same city; moreover, the stock returns of a company headquartered in a city with stronger agglomeration economies are also correlated more highly with stock returns of other companies headquartered in the same city. The local comovement of earnings among companies headquartered in the same city is also found, and the local comovement of stock returns is correlated with the local comovement of earnings. We conclude that correlated local fundamentals due to localized agglomeration economies can explain the local comovement of stock returns.
    Keywords: Stock returns; Local bias; Agglomeration economies
    JEL: G1 R1 R3
    Date: 2011–06–24
  11. By: Temel, Tugrul
    Abstract: This study investigates convergence in hired farm wages in U.S. counties over the period 1978-92. The time-invariant distribution of wages is characterized using Markov chains. This study is concerned with two questions: Are regional hired farm wages moving in the same direction? If so, are they consistent with the direction of the entire U.S. farm wages? Concerning with e¢ ciency in agricultural labor markets, the study approximates it to the extent that it is reected in farm wages. Time-invariant distributions of wages are calculated for the Northeast, Midwest, South, and West region, and for the entire U.S. The results support the hypothesis of convergence at regional level to lower-than-respective regional average wage. Convergence is the strongest in the Northeast and the weakest in the South. Likewise, convergence to lower-than-average wage is present at the U.S. level, but it is stronger than that at the regional level.
    Keywords: farm wage movements; labor markets; convergence; Markov chains; U.S. agriculture.
    JEL: Q15 Q01 Q12 C21 R14 Q18
    Date: 2011–06–29
  12. By: Stefano Magrini (Department of Economics, University Of Venice Cà Foscari); Margherita Gerolimetto (Department of Economics, University Of Venice Cà Foscari); Hasan Engin Duran (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The analysis of synchronization among regional or national business cycles has recently been attracting a growing interest within the economic literature. Far less attention has instead been devoted to a closely related issue: given a certain level of synchronization, some economies might be systematically ahead of others along the swings of the business cycle. In other words, there could be a lead/lag structure in which some economies systematically lead or lag behind others. In the present paper we aim at providing a thorough analysis of the lead/lag structure among a system of regional economies. This task is achieved in two steps. First, we show that leading (or lagging behind) is a feature that does not occur at random across the economies. Second, we investigate the economic drivers that could explain such a behavior. To do so, we employ data for 48 conterminous US states between 1979 and 2010.
    Keywords: Regional business cycles, lead/lag structure, synchronization
    JEL: R10 E32 O18 F40
  13. By: Temel, Tugrul
    Abstract: This study examines movements in per farm real output in the US counties, and tests for convergence of output at the aggregate, regional, and divisional levels. The estimations are carried out for the period 1982-1992 and for its two constituent sub-periods, 1982-87 and 1987-92. For the period 1982-92, results show weak convergence at aggregate and regional levels. For the first sub-period 1982-87 (the second sub-period 1987-92) weak convergence (strong divergence) takes place at aggregate and regional levels, except the Northeast region showing strong divergence (weak convergence). These results indicate the Northeast region having distinct movements in farm output compared to the rest of the US. This can, in part, be attributed to the type of farming prevailing in Northeast. At divisional level the estimates are not robust neither for the entire period nor its sub-periods. Overall, the conjecture of the neoclassical growth model is supported at aggregate and regional levels, with unclear pattern at the divisional level.
    Keywords: Convergence of farm output; US farm policy
    JEL: R58 R12 R11
    Date: 2011–06–29
  14. By: Otto, Alkis Henri
    Abstract: The focus of this study is on the consequences of rising energy costs and demographical change in the city of Hamburg. In section 2 we present a class of models that help to understand and explain patterns of urban land use. Section 3 then discusses urban land use and the population structure of Hamburg. Section 4 addresses some future economic and demographic trends and relates them to rising energy costs. Section 5 finally highlights some conclusion drawn from the analysis. --
    Date: 2010
  15. By: Escobal, J., Ponce, C. (Rimisp)
    Abstract: This document is the result of the Rural Territorial Dynamics Program, implemented by Rimisp in several Latin American countries in collaboration with numerous partners. The program has been supported by the International Development Research Center (IDRC, Canada). We authorize the non-for-profit partial or full reproduction and dissemination of this document, subject to the source being properly acknowledged.
    Keywords: spatial patterns, growth, poverty, changes, Peru
    JEL: D44 D82 L86 C72
    Date: 2011

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