nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒07‒27
twenty-one papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Fostering the potential endogenous development of European regions: a spatial dynamic panel data analysis of the Cohesion Policy on regional convergence over the period 1980-2005 By Salima Bouayad-Agha; Nadine Turpin; Lionel Vedrine
  2. Regional agglomeration in Portugal: a linear analysis By Martinho, Vítor João Pereira Domingues
  3. The geography of innovation in the Luxembourg metropolitan region: an intra-regional approach By DAUTEL Vincent; WALTHER Olivier
  4. "Assessing agglomeration economies in a spatial framework with endogenous regressors" By Michael J. Artis; Ernest Miguélez; Rosina Morenos
  5. (Re-)exploring the link between devolution and regional disparities in Italy By Torrisi, Gianpiero; Pike, Andy; Tomaney, John; Tselios, Vassilis
  6. Sectoral convergence in output per worker between Portuguese regions By Martinho, Vítor João Pereira Domingues
  7. Analysis of net migration between the Portuguese regions By Martinho, Vítor João Pereira Domingues
  8. Partnership as an Important Factor of the Spatial Development By Miroslav, Foret
  9. Study of the Regional Economies: Factors for Invigoration (Japanese) By OZAKI Masahiko; NAKANISHI Hodaka
  10. Factors of Competitive Advantage of Territory on the Regional Level By Borsekova, Kamila; Petrikova, Katarina; Vanova, Anna
  11. Implementing Sustainable Urban Travel Policies in Mexico By Víctor Islas Rivera; Salvador Hernández G.; José A. Arroyo Osorno; Martha Lelis Zaragoza; J. Ignacio Ruvalcaba
  12. Geographic concentration in Portugal and regional specific factors By Martinho, Vítor João Pereira Domingues
  13. Synergies and conflicts between EU policies and the objective of territorial cohesion By Riccardo Crescenzi; Fabrizio De Filippis; Fabio Pierangeli
  14. Firm collaboration and modes of innovation in Norway By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  15. The NRU and the Evolution of Regional Disparities in Spanish Unemployment By Bande, Roberto; Karanassou, Marika
  16. Categorisation of OECD Regions Using Innovation-Related Variables By Giulia Ajmone Marsan; Karen Maguire
  17. Regional Input Output Table for the State of Punjab By Singh, Inderjeet; Singh, Lakhwinder
  18. Income tax deduction of commuting expenses and tax funding in an urban CGE study: the case of German cities By Hirte, Georg; Tscharaktschiew, Stefan
  19. Polarization versus agglomeration By Martinho, Vítor João Pereira Domingues
  20. Air Transport Services in Remote Regions By Svein Braathen
  21. Governance of Public Policies in Decentralised Contexts: The Multi-level Approach By Claire Charbit

  1. By: Salima Bouayad-Agha; Nadine Turpin; Lionel Vedrine
    Keywords: Dynamic panels, GMM, Regional Convergence, Spatial Dependence, Structural Funds
    JEL: C21 C23 O52 R11 R15
    Date: 2010–12–17
  2. By: Martinho, Vítor João Pereira Domingues
    Abstract: This work aims to study the Portuguese regional agglomeration process, using the linear form the New Economic Geography models that emphasize the importance of spatial factors (distance, costs of transport and communication) in explaining of the concentration of economic activity in certain locations. In a theoretical context, it is intended to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition, describing the mechanisms by which these processes are based. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo (which is evidence of regional divergence in Portugal) and the productivity factor significantly improves the results that explain the regional clustering in Portugal (despite being ignored in the models of New Economic Geography).
    Keywords: agglomeration; Portuguese regions; linear models.
    JEL: O18 C23 R12
    Date: 2011
  3. By: DAUTEL Vincent; WALTHER Olivier
    Abstract: The main objective of the paper is to analyse the local determinants of innovation in the Luxembourg metropolitan region. We are particularly interested in the impact of the local milieu and characteristics of firms. Our paper addresses two specific research questions. Firstly, we examine the extent to which geographic space is a determinant of innovation for five intra-regional units based on an aggregation of municipalities. Secondly, we investigate whether innovation is dependent on accessibility to the mean centre. In both cases, we examine innovation propensity and innovation output using microdata from the Community Innovation Survey (CIS 2006) carried out in Luxembourg. The paper shows that space matters both in terms of spatial units and accessibility within the intra-regional context of Luxembourg. It provides, in particular, first evidence of a close link between the effects on innovation at the intra-regional level of firms? profiles and agglomeration externalities. Both favour innovation for firms from Luxembourg-City and, to a lesser extent, from the Suburban Area.
    Keywords: intra-regional innovation; firms' profile; location factors; local polynomial regression; Luxembourg metropolitan region
    JEL: C14 O31 O38 R11 R12
    Date: 2011–07
  4. By: Michael J. Artis (Department of Economics, University of Swansea); Ernest Miguélez (Faculty of Economics, University of Barcelona); Rosina Morenos (Faculty of Economics, University of Barcelona)
    Abstract: This paper is concerned with the influence of agglomeration economies on economic outcomes across British regions. The concentration of economic activity in one place can foster economic performance due to the reduction in transportation costs, the ready availability of customers and suppliers, and knowledge spillovers. However, the concentration of several types of intangible assets can boost productivity as well. Thus, using an interesting dataset which proxies regional productivity, we will assess the relative importance of agglomeration and other assets, controlling for endogeneity, spatial autocorrelation and heteroscedasticity at the same time. Our results suggest that agglomeration has a definite positive influence on productivity, although our estimates of its effect are dramatically reduced when spatial dependence and other hitherto omitted variables proxying intangible assets are controlled for.
    Keywords: Agglomeration economies, intangible assets, endogeneity, spatial autocorrelation, spatial HAC estimation. JEL classification:C21, J24, R10, R11, R12.
    Date: 2011–07
  5. By: Torrisi, Gianpiero; Pike, Andy; Tomaney, John; Tselios, Vassilis
    Abstract: The existence of an economic dividend - in terms of regional disparities -of the global devolutionary trend registered over the past three decades is still ambiguous both on theoretical and empirical grounds and it is likely to be casespecific. With respect to the Italian case it has been argued that since 1996, even in an indirect way, a negative effect of devolution on regional disparities arose. However, our empirical analysis suggests that the decline in Italian regional disparities over the decade 1996-2006 has been decisively driven by the dynamic of population and, to some extent, by the loss of competitiveness and consequent low relative performance of northern regions. Therefore, the link between devolution and spatial disparities appears to be rather spurious and, if any, its beneficial effect has been uneven both in time and space.
    Keywords: Economic Dividend; Devolution; Spatial Disparities; Spatial Economic Policy; Decentralisation; Italy
    JEL: R58 O18 H1 R5
    Date: 2011–04
  6. By: Martinho, Vítor João Pereira Domingues
    Abstract: The aim of this paper is to present a further contribution to the analysis of absolute convergence ( and ), associated with the neoclassical theory, and conditional, associated with endogenous growth theory, of the sectoral productivity at regional level. Presenting some empirical evidence of absolute convergence of productivity for each of the economic sectors and industries in each of the regions of mainland Portugal (NUTS II and NUTS III) in the period 1986 to 1994 and from 1995 to 1999. The finest spatial unit NUTS III is only considered for each of the economic sectors in the period 1995 to 1999. They are also presented empirical evidence of conditional convergence of productivity, but only for each of the economic sectors of the NUTS II of Portugal, from 1995 to 1999. The structural variables used in the analysis of conditional convergence is the ratio of capital/output, the flow of goods/output and location ratio. The main conclusions should be noted that the signs of convergence are stronger in the first period than in the second and that convergence is conditional, especially in industry and in all sectors.
    Keywords: convergence; output; Portuguese regions
    JEL: R58 O47 C23
    Date: 2011
  7. By: Martinho, Vítor João Pereira Domingues
    Abstract: This work aims mainly to present a project of research about the identification of the determinants that affect the mobility of labor. The empirical part of the work will be performed for the NUTS II and NUTS III of Portugal, from 1996 to 2002 and for 1991 and 2001, respectively (given the availability of statistical data). As main conclusion it can be said, for the NUTS II (1996-2002), which is confirmed the existence of some labor mobility in Portugal and that regional mobility is mainly influenced positively by the output growth and negatively by the unemployment rates and by the weight of the agricultural sector. NUTS III level (1991 and 2001) is something similar, but with this level of spatial disaggregation (and in this period) the basic equipment (amenities), particularly in terms of availability of housing, are the main determinants of migration.
    Keywords: net migration; Portuguese regions; panel and cross-section estimations.
    JEL: C23 J61 C21 R11
    Date: 2011
  8. By: Miroslav, Foret
    Abstract: The contribution is based on the theoretical presumption that the successful and balanced spatial development at all hierarchical levels (local, regional, national, EU, global) depends on close and effective partnership, cooperation and communication of many groups of the different actors. It brings own definition of partnership for local and regional development and there is included basic categorisation of different kind of partnerships as well. The importance of partnership and cooperation for territorial development is demonstrated on analyses of the concrete issues from Znojmo region (Czech Republic).
    Keywords: life conditions; wine trails; marketing research; spatial development; Partnership
    Date: 2011
  9. By: OZAKI Masahiko; NAKANISHI Hodaka
    Abstract: Central and local governments of Japan have made efforts to invigorate the regional economies for more than half a century, but the goal has not yet been achieved. People who have been directly or indirectly involved with regional polices indicated that problems were encountered during the process of making and executing regional policies. The problems can be attributed to the following three points:<ol><li>There has not been enough coordination among regional policies.</li><li>Almost all of the regional policies have been formulated by the central government.</li><li>There has not been enough cooperation in the regional areas.</li></ol>After analyzing some of the above cases and considering the economic theory, we conclude that the aforementioned three points are appropriate. We also discuss the necessity of forming a new regional system that fosters more decentralized regional economies and brings about sustainable economic growth in such regions.
    Date: 2011–05
  10. By: Borsekova, Kamila; Petrikova, Katarina; Vanova, Anna
    Abstract: The main aim of the paper is to identify the meaning of factors which influence creation, identification and utilization of competitive advantage of territory on the regional level. Through the theoretical knowledge and its analogical using in the conditions of regions and through the results of own researches, we characterize the meaning of various factors on the regional competitiveness. The basic assumption of the paper is that the market is the key element which defines the real competitive advantage which has the strategic meaning for regional development. The paper identifies the key factors of competitiveness including the cooperation in the conditions of regions and brings new theoretical approach to the utilization of competitive advantage in t erritories.
    Keywords: factors; regions; Competitive advantage
    Date: 2011
  11. By: Víctor Islas Rivera; Salvador Hernández G.; José A. Arroyo Osorno; Martha Lelis Zaragoza; J. Ignacio Ruvalcaba
    Abstract: This report describes the main challenges to urban travel in Mexico. We focus on some of the basic causes of urban transport problems, and we analyze some urban travel policies that could be considered good practices towards sustainable urban development. Mexico City is the emblematic case.
    Date: 2011–05
  12. By: Martinho, Vítor João Pereira Domingues
    Abstract: This paper pretends to analyze the importance which the natural advantages and local resources are in the manufacturing industry location, in relation with the "spillovers" effects and industrial policies. To this, we estimate the Rybczynski equation matrix for the various manufacturing industries in Portugal, at regional level (NUTS II) and for the period 1980 to 1999. Estimations are displayed with the model mentioned and for four different periods, namely 1980 to 1985, from 1986 to 1994, from 1980 to 1994 and from 1995 to 1999. The consideration of the various periods until 1994, aims to capture the effects of our entrance at the, in that time, EEC (European Economic Community) and the consideration of a period from 1995 is because the change in methodology for compiling statistical data taken from this time in Portugal. As a summary conclusion, noted that the location of manufacturing in Portugal is still mostly explained by specific factors, with a tendency to increase in some cases the explanation by these factors, having the effect "spillovers" and industrial policies little importance in this context.
    Keywords: geographical concentration; Portuguese regions; specific factors.
    JEL: R58 O18 C23
    Date: 2011
  13. By: Riccardo Crescenzi; Fabrizio De Filippis; Fabio Pierangeli
    Abstract: The paper looks at the overall structure of the European Union’s regional, agricultural and rural development policies in order to assess their coordination and synergies at the territorial level and their degree of compatibility with the objective of territorial cohesion. The regression analysis - covering the 20-year period 1994-2013, and approximately 90% of total Community expenditure - reveals that the compatibility of the various areas of Community policy in terms of the objectives of territorial cohesion has not progressed in a linear fashion over time. Shifting resources in the Community budget from one policy area to another does not, by itself, appear capable of guaranteeing virtuous paths in terms of territorial cohesion. The increase in the territorial ‘vocation’ of overall Community spending will, therefore, crucially depend upon the definition of appropriate allocative mechanisms and interventions, based upon the characteristics of each region and its ‘local’ needs
    Keywords: Regional Policy, Regional Development, Rural Development, European Union
    JEL: O18 R11 R58
    Date: 2011–07
  14. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: This paper examines the sources of firm product and process innovation in Norway. It uses a purpose-built survey of 1604 firms in the five largest Norwegian city-regions to test, by means of a logit regression analysis, Jensen et al.’s (2007) contention that firm innovation is both the result of ‘science, technology and innovation’ (STI) and ‘doing, using and interacting’ (DUI) modes of firm learning. The paper classifies different types of firm interaction into STI-mode interaction (with consultants, universities, and research centres) and DUI-mode interaction, distinguishing between DUI interaction within the supply-chain (i.e. with suppliers and customers) or not (with competitors). It further controls for the geographical locations of partners. The analysis demonstrates that engagement with external agents is an important source of firm innovation and that both STI and DUI-modes of interaction matter. However, it also shows that DUI modes of interaction outside the supply chain tend to be irrelevant for innovation, with frequent exchanges with competitors having a detrimental effect on a firm’s propensity to innovate. Collaboration with extra-regional agents is much more conducive to innovation than collaboration with local partners, especially within the DUI mode.
    Keywords: Competitors; Customers; DUI; Firms; Innovation; Norway; STI; Suppliers; Universities
    JEL: L14 O31 O32
    Date: 2011–07
  15. By: Bande, Roberto (University of Santiago de Compostela, Spain); Karanassou, Marika (University of London)
    Abstract: On both theoretical and empirical grounds, this paper provides evidence that refutes the natural rate of unemployment (NRU) hypothesis as an explanation of the evolution of regional disparities in the unemployment rate. We first present our analytical framework, which follows the chain reaction theory (CRT) of unemployment and argues that (i) a system of interactive labour market equations, rather than a single-equation unemployment rate model, is better equipped to accommodate unemployment dynamics, and (ii) due to the interplay of frictions and growth in labour markets, the NRU ceases to be an attractor of the unemployment rate time path. We then provide evidence that the Spanish economy is characterised by large and persistent disparities in the regional unemployment rates. Through standard kernel density tecnhiques, we demonstrate the existence of marked differences between two groups of high and low unemployment regions that remain stable in their composition through time. Finally, we review our empirical labour market model for each group of regions and evaluate the corresponding natural rates. Our findings confirm that the evolution of regional disparities cannot be attributed to disparities in the natural rates, given that these, although different, do not act as an attractor of unemployment. Thus, the NRUs offer little help in the formulation of labour market policies.
    Keywords: regional unemployment, disparities, kernel, natural rate, frictional growth
    JEL: R23 J64
    Date: 2011–07
  16. By: Giulia Ajmone Marsan; Karen Maguire
    Abstract: National policy makers have shown a growing interest in the regional dimension of innovation processes, and regional policy makers are seeking to promote their own competitiveness by supporting innovation. To advance the OECD quantitative research on regions and innovation, a categorisation of regions was developed using socio-demographic, economic, and innovation-related variables. Many different categorisations are possible depending on the purpose of the peer group comparisons. This categorisation was developed with the main goal of highlighting the diversity of regional profiles across OECD regions. Similar types of analysis have been performed with regions of the European Union. This analysis identifies eight groups of regions based on the similarity of their performance on the 12 variables used in the statistical cluster analysis. These eight groups were then classified into three macro categories based on relevance for policy recommendations. Possibilities for further research to develop different forms of regional peer groupings are discussed.<BR>Les responsables politiques nationaux montrent un intérêt croissant envers la dimension régionale des processus d’innovation, et les responsables politiques régionaux cherchent à promouvoir leur propre compétitivité en soutenant l’innovation. Afin d’améliorer la recherche quantitative de l’OCDE sur les régions et l’innovation, une catégorisation des régions a été développée en utilisant des variables socio-démographiques, économiques et liées à l’innovation. De nombreuses catégorisations sont possibles en fonction de l’objectif des comparaisons entre « groupes de pairs ». La présente catégorisation a été développée avec l’objectif principal de mettre en évidence la diversité des profils régionaux au sein des régions de l’OCDE. Des types d’analyse similaires ont été réalisés avec les régions de l’Union européenne. Cette analyse identifie huit groupes de régions sur la base de la similitude de leur performance dans les 12 variables utilisées pour l’analyse statistique en « cluster ». Ces huit groupes ont ensuite été classés en trois macro-catégories suivant leur pertinence pour les recommandations politiques. Les possibilités de continuer les recherches pour développer différentes formes de groupes de pairs régionaux sont également abordées.
    Keywords: economic development, innovation policy, regional development, regional innovation strategies, regional competitiveness, Cluster Analysis
    JEL: D2 L2 O2 O31 O32 R3 R5
    Date: 2011–07
  17. By: Singh, Inderjeet; Singh, Lakhwinder
    Abstract: Because of policy relevance of regional input-output analysis, a vast literature on the construction of regional input-output tables has emerged in the recent past, especially on the non-survey and hybrid methods. Although, construction of regional input-output tables is not new in India, but generation of input-output table using non-survey methods is relatively a rare phenomenon. This work validates alternative non-survey, location quotient methodologies and finally uses comparatively better approach to generate the forty two sector regional input-output table for the state of Punjab for 2006-07.
    Keywords: Regional; Input-Output; Location Quotients
    JEL: R11
    Date: 2011–07–20
  18. By: Hirte, Georg; Tscharaktschiew, Stefan
    Abstract: Germany like many other European countries subsidize commuting by granting the right to deduct commuting expenses from the income tax base. This regulation has often been changed and has regularly been under debate during the last decades. The pros (e.g. causing efficiency gains with respect to the spatial allocation of labor) and cons (e.g. causing urban sprawl) are well documented. Nonetheless, there is need for further research. For reasons of tractability the few models applied in the tax deduction related literature are based on restrictive assumptions particularly concerning the design of the income taxation scheme and the structure of households (neglecting household heterogeneity) and, most importantly, they do not integrate labor supply and location decision problems simultaneously. Here, for the first time, those and more features are taken into account in a full spatial general equilibrium simulation approach calibrated to an average German city. This model is applied to calculate the impacts of tax deductions on an urban economy thereby considering different funding schemes. Our results suggest that the tax deduction level currently chosen is below the optimal level in the case of income tax funding. If a change in the tax base occurs, e.g. toward consumption tax or energy tax funding, the optimal size of the subsidy should be even higher. Furthermore, the different policy packages cause a very differentiated pattern regarding welfare distribution, environmental (CO2 emissions) and congestion effects. We also find surprisingly small effects on urban sprawl characterized by suburbanization of residences and jobs, increasing commuting distances and spatial city growth. --
    Keywords: urban general equilibrium model,commuting subsidies,income tax deduction
    JEL: C68 R12 R13 R14 R20 R51
    Date: 2011
  19. By: Martinho, Vítor João Pereira Domingues
    Abstract: The aim of this paper is to analyze the processes of polarization and agglomeration, to explain the mechanisms and causes of these phenomena in order to identify similarities and differences. As the main implication of this study should be noted that both process pretend to explain the concentration of economic activity and population in certain places, through cumulative phenomena, but with different perspectives, in other words, the polarization with a view of economic development and agglomeration with a perspective of space.
    Keywords: polarization; agglomeration; economic activity.
    JEL: O11 O18 O12
    Date: 2011
  20. By: Svein Braathen
    Abstract: The need for public support. The existing programs for public support have been made with reference to the need for essential air transport services for providing local communities with lifeline transport services. However, the criteria for giving public support (via the programs in USA, Canada and Europe) allows for quite wide interpretation of the terms “remote regions” and “lifeline services”. In some places, subsidies are given to routes with quite heavy traffic where the potential for ordinary commercial services could have been offered. In other subsidy programs, air services’ role as lifeline transport can be questioned because there are modes of surface transport that probably can serve these lifeline needs. A clearer set of criteria for “remoteness” and “lifeline services” could perhaps be developed. The allocative efficiency of the services should be focused, i.e. that the level of service are aligned with market needs and regional policy objectives. There should also be a coordinated approach to the funding of services to remote regions across relevant transport modes.
    Date: 2011–05
  21. By: Claire Charbit
    Abstract: The ability of sub national governments to “better spend”, by identifying relevant paths for territorial competitiveness and effective delivery of public services, is largely enshrined in their institutional background. Rather than isolated actors, sub national authorities and central governments are “mutually dependent”. In this context, and for a majority of OECD member and non-member countries, the key underlying question is not whether to “decentralise or not” or even opt for a specific decentralisation model, but to look at ways to improve capacity and coordination among public stakeholders at different levels of government to increase efficiency, equity and sustainability of public spending. This question of “multi level governance” is therefore accurate, whatever the constitutional framework of countries, federal or unitary. This paper provides: first, a methodology to diagnose multi level governance challenges; and, second, examples of tools used by OECD countries to bridge co-ordination and capacity “gaps”. This approach has been inspired by OECD regional development policy work, as regional development policy relies both on the diversity of territorial situations and the coherence of regional strategies at the national level. In practice, it has already been tested in a variety of public policies such as public investment, water, and innovation, which all contributed to enrich it with concrete sectoral evidence and experience.
    Keywords: decentralisation, sub-national government, regional development, multi-level governance, intergovernmental relationships, local and state governments
    JEL: H1 H5 H6 H7 R1
    Date: 2011–07–19

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