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on Economic Geography |
| By: | Fabrizio Barca (Ministry of Economy and Finance, Italy); Philip McCann (University of Groningen, The Netherlands); Andrés Rodríguez-Pose (IMDEA Social Sciences Institute) |
| Abstract: | The paper examines the debates regarding place-neutral versus place-based policies for economic development. The analysis is set in the context of how development policy thinking on the part of both scholars and international organizations has evolved over several decades. Many of the previously accepted arguments have been called into question by the impacts of globalization and a new response to these issues has emerged, a response both to these global changes and also to non-spatial development approaches. The debates are highlighted in the context of a series of major reports recently published on the topic. The cases of the developing world and of the European Union are used as examples of how in this changing context development intervention should increasingly focus on efficiency and social inclusion at the expense of an emphasis on territorial convergence and how strategies should consider economic, social, political and institutional diversity in order to maximize both the local and the aggregate potential for economic development. |
| Keywords: | place-based; development, policy; institutions; globalization; economic geography |
| JEL: | R11 R58 O18 P48 |
| Date: | 2011–09–06 |
| URL: | http://d.repec.org/n?u=RePEc:imd:wpaper:wp2001-15&r=geo |
| By: | Jonathan Jones; Colin Wren |
| Abstract: | The paper examines the relative importance for industrial location of production linkages and knowledge spillovers, distinguishing between intermediate and non-intermediate goods that are backwards or forwards in nature. A novel approach is used to construct proxies for non-intermediate goods at a sub-national industry level based on an Input-Output transaction table. Taking data on location decisions by foreign-owned plants across British regions over 1985-2007, the paper finds support for the new economic geography explanation of location based on linkages over that due to spillovers. However, the importance of intermediate and non-intermediate linkages differs between manufacturing and service industries. |
| Keywords: | Industrial location, agglomeration economies, intermediate goods, FDI |
| JEL: | H3 O2 L2 R3 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0089&r=geo |
| By: | Wiberg, Magnus (Ministry of finance) |
| Abstract: | This paper examines how different electoral rules affect the location 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 standard 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 instrumental variable strategy that accounts for the potential endogeneity of the electoral rule. |
| Keywords: | Economic Geography; Regional Policy; Electoral Rules |
| JEL: | D72 F12 R12 |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sunrpe:2011_0021&r=geo |
| By: | Davide Castellani (Department of Economics, Finance and Statistics, University of Perugia and Centro Studi Luca D'Agliano, Milan); Fabio Pieri (Department of Economics, Finance and Statistics, University of Perugia) |
| Abstract: | The recent increase in R&D oshoring have raised fears that knowledge and competitive- ness in advanced countries may be at risk of `hollowing out'. At the same time, economic research has stressed that this process is also likely to allow some reverse technology transfer and foster growth at home. This paper addresses this issue by investigating the extent to which R&D oshoring is associated with productivity dynamics of European (NUTS2) regions. In particular, we explore whether R&D investments abroad have a dierent impact from those in manufacturing and other business activities. We nd that oshoring regions have higher productivity growth, but this positive eect fades down with the number of investment projects carried out abroad. However, a large and positive correlation emerge between the extent of R&D oshoring and the home region produc- tivity growth, supporting the idea that carrying out R&D abroad strengthen European competitiveness. |
| Keywords: | Regional Productivity, Foreign Investments, Europe, R&D Offshoring |
| JEL: | C23 F23 O47 O52 R11 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1120&r=geo |
| By: | Mohsin, Hasan M; Gilbert, Scott |
| Abstract: | The study estimates relative city price convergence using CPI data from July 2001 to June 2008 on 35 Pakistani cities. Two cities Lahore and Karachi are chosen to be the numeraire cities. The half life of relative city price shock has also been estimated. The study finds average half life of price shock to be less than 5 months but it varies from 1.3 to 68 months in the case of individual cities. The estimates of Spatial GLS are found to be lower than OLS which may imply that Spatial Correlations are important factor for the estimation of half life. Furthermore, the average half life of a price shock in Lahore is less than that of Karachi. |
| Keywords: | Prices; convergence; Spatial GLS |
| JEL: | F4 R1 E31 |
| Date: | 2010–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:27901&r=geo |
| By: | Oliver Falck; Christina Guenther; Stephan Heblich; William R. Kerr |
| Abstract: | We identify the impact of local firm concentration on incumbent performance with a quasi natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources. |
| Keywords: | Agglomeration, competition, firm dynamics, labor, Germany |
| JEL: | R10 L10 H25 O10 J20 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0088&r=geo |
| By: | Farole, Thomas; Winkler, Deborah |
| Abstract: | Using a cross-section of more than 40,000 manufacturing and services firms in 79 developing countries from the World Bank's Enterprise Surveys Database, this paper assesses how firm location determines the likelihood and extent of exporting in developing countries. Descriptive statistics confirm higher export participation (but not intensity) for firms in core versus non-core regions, despite the finding that firms in the core assess many aspects of the investment climate more negatively. Results from a probit model show that, in addition to firm-specific characteristics, both regional investment climate and agglomeration factors have a significant impact on export participation. Specifically, customs clearance and electricity quality matter for export participation for manufacturing firms. Although localization economies and export spillovers are associated with increased exporting, the opposite is found for urbanization economies for both manufacturing and services firms. The analysis finds that firm-level determinants of exporting matter more for firms located in non-core regions, while regional determinants and agglomeration economies play a larger role in core regions. The findings point to the presence of congestion costs in the core, and suggest that policy interventions to target export participation are likely to have a greater impact if they are focused on core regions over non-core regions, where firm-specific factors predominate. Moreover, the importance of export spillovers and localization economies highlights the potential value of efforts to remove barriers to natural agglomeration both in core and non-core regions, for example through investments in infrastructure, the provision of social services, and regional integration arrangements. |
| Keywords: | Regional Economic Development,Microfinance,E-Business,Banks&Banking Reform,Private Participation in Infrastructure |
| Date: | 2011–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5780&r=geo |
| By: | Graupner, Marten |
| Abstract: | The paper presents a detailed documentation of the underlying concepts and methods of the Spatial Agent-based Competition Model (SpAbCoM). For instance, SpAbCoM is used to study firms' choices of spatial pricing policy (GRAUBNER et al., 2011a) or pricing and location under a framework of multi-firm spatial competition and two-dimensional markets (GRAUBNER et al., 2011b). While the simulation model is briefly introduced by means of relevant examples within the corresponding papers, the present paper serves two objectives. First, it presents a detailed discussion of the computational concepts that are used, particularly with respect to genetic algorithms (GAs). Second, it documents SpAbCoM and provides an overview of the structure of the simulation model and its dynamics. -- Das vorliegende Papier dokumentiert die zugrundeliegenden Konzepte und Methoden des Räumlichen Agenten-basierten Wettbewerbsmodells (Spatial Agent-based Competition Model) SpAbCoM. Anwendungsbeispiele dieses Simulationsmodells untersuchen die Entscheidung bezüglich der räumlichen Preisstrategie von Unternehmen (GRAUBNER et al., 2011a) oder Preissetzung und Standortwahl im Rahmen eines räumlichen Wettbewerbsmodells, welches mehr als einen Wettbewerber und zweidimensionalen Marktgebiete berücksichtigt. Während das Simulationsmodell in den jeweiligen Arbeiten kurz anhand eines Beispiels eingeführt wird, dient das vorliegende Papier zwei Zielen. Zum Einen sollen die verwendeten computergestützten Konzepte, hier speziell Genetische Algorithmen (GA), detailliert vorgestellt werden. Zum Anderen besteht die Absicht dieser Dokumentation darin, einen Überblick über die Struktur von SpAbCoM und die während einer Simulation ablaufenden Prozesse zu gegeben. |
| Keywords: | Agent-based modelling,genetic algorithms,spatial pricing,location model.,Agent-basierte Modellierung,Genetische Algorithmen,räumliche Preissetzung,Standortmodell. |
| JEL: | Y90 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:iamodp:135&r=geo |
| By: | Keith R. Phillips; James Nordlund; Roberto Coronado |
| Abstract: | The rolling recessions of the 1970s and 1980s were characterized by industry and region specific shocks that led to large dispersions in the economic performance of regions across the U.S. The 1970s were primarily impacted by sharply rising energy prices that hit the manufacturing states hard while stimulating growth in the energy states.> ; The 1980s began with declines in the Farm Belt, followed by declines in the Energy Belt, the Rust (manufacturing) Belt, and finally, due to declines in defense spending, a decline in the Gun Belt. Simple measures of regional dispersion such as the population-weighted variance of job growth across states show that the economic dispersion was historically high during these two decades.> ; The 1990s saw a continuous decline in regional economic dispersion and the 2000s has seen historically low levels of dispersion. Perhaps the biggest surprise this decade has been the low levels of dispersion of economic performance over the past several years given the significant energy price shocks and the depth of the national economic recession. In this paper, we look at the likely causes of economic dispersion across regions and test for the major influences both in the rise of dispersion in the 1970s and 1980s and the subsequent fall in the 1990s and 2000s. Major factors that we test include state industrial structure, oil price shocks and bank integration. |
| Keywords: | Regional economics ; Industries ; Economic development |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1108&r=geo |
| By: | Stephen Gibbons; Sandra McNally; Martina Viarengo |
| Abstract: | Improvement of educational attainment in schools in urban, disadvantaged areas is an important priority for policy - particularly in countries like England which have a long tail at the bottom of the educational distribution and where there is much concern about low social mobility. An anomaly in the spatial dimension of school funding policy in England allows us to examine the effect of increasing school expenditure for schools in urban areas. This anomaly arises because an 'area cost adjustment' is made in how central government allocates funds to Local Authorities (school districts) whereas, in reality, teachers are drawn from the same labour market and are paid according to national pay scales. This is one of the features that give rise to neighbouring schools on either side of a Local Authority boundary being allocated very different resources, even if they have very similar characteristics. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This finding lends adds to the evidence that school resources have an important role to play in improving educational attainment and has direct policy implications for the current 'pupil premium' policy in England. |
| Keywords: | Urban schools, education, resources, |
| JEL: | R0 I21 H52 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:cep:ceedps:0128&r=geo |
| By: | David Chilosi; Tommy E. Murphy; Roman Studer |
| Abstract: | This article documents and examines the integration of grain markets in Europe across the early modern/late modern divide and across distances and regions. It relies on principal component analysis to identify market structures. The analysis finds that a European market emerged only in the nineteenth century, but the process had earlier roots. In early modern times a fall in trading costs was followed by an increase in market efficiency. Gradually expanding processes of integration unfolded in the long-run. Early modern regional integration was widespread but uneven, with North-Western Europe reaching high levels of integration at a particularly early stage. Low-land European markets tended to be larger and better integrated than in land-locked Europe, especially within large, centralised states. In the nineteenth century, national markets grew in old states, but continental and domestic dynamics had become strictly linked. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:igi:igierp:412&r=geo |
| By: | Jesús Cañas; Roberto Coronado; Robert W. Gilmer; Eduardo Saucedo |
| Abstract: | For decades, the maquiladora industry has been a major economic engine along the U.S.–Mexico border. Since the 1970s, researchers have analyzed how the maquiladora industry affects cities along both sides of the border. Gordon Hanson (2001) produced the first comprehensive study on the impact of the maquiladoras on U.S. border cities, considering the impact of these in-bond plants on both employment and wages. His estimates became useful rules of thumb for the entire U.S.–Mexico border. These estimates have become dated, as Hanson's study covered the period from 1975 to 1997. The purpose of this paper is to update Hanson's results using data from 1990 to 2006 and to extend the estimates to specific border cities. For the border region as a whole, we find that the impact of a 10 percent increase in maquiladora production leads to a 0.5 to 0.9 percent change in employment. However, we also find that the border average is quite misleading, with large differences among individual border cities. Cities along the Texas–Mexico border benefit the most from growing maquiladora production. We also estimate the cross-border maquiladora impacts before and after 2001 when border security begins to rise, the maquiladora industry entered a severe recession and extensive restructuring and global low-wage competition intensified as China joined the World Trade Organization. Empirical results indicate that U.S. border cities are less responsive to growth in maquiladora production from 2001 to 2006 than in the earlier period; however, when looking into specific sectors we find that U.S. border city employment in service sectors are far more responsive post-2001. |
| Keywords: | International trade ; Labor market ; Economic development - Latin America |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1107&r=geo |
| By: | Martinho, Vítor João Pereira Domingues |
| Abstract: | The consideration of spatial effects at a regional level is becoming increasingly frequent and the work of Anselin (1988), among others, has contributed to this. This study analyses, through cross-section estimation methods, the influence of spatial effects in the NUTs III vine crop of mainland Portugal, in 1999 (the last data available), considering the Verdoorn relationship as a base of study. To analyse the data, by using Moran I statistics, and estimation results, considering the spatial lag and spatial error component, it is stated that there are positive spatial autocorrelation (variables of each of the regions develop in a similar manner to each of the neighbouring regions), in the vine crop. |
| Keywords: | spatial econometrics; vine crop; Portuguese regions |
| JEL: | O13 C21 R11 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33200&r=geo |
| By: | Marco Crocco (Cedeplar/UFMG) |
| Abstract: | The aim of the article is to analyze the relationship between a financial system and the city in which it is located. In order to do so, initially an inedited theoretical discussion regarding the analysis of the relationship between the degree of centrality of a city and the behavior of financial systems is made. This analysis is carried out bearing in mind the concept of both liquidity preference and the endogeneity of money supply derived from Keynes (1937). An empirical investigation of the Brazilian case follows. In the investigation, it is proposed a hierarchy of the financial system for every municipality in Brazil. Based on this hierarchy the behavior of the bank system is analyzed. The paper concludes arguing that space is an important element on the definition of the ways bank branches work in different regions, with clear consequences for the economic development of the regions. |
| Keywords: | Urban hierarchy, Financial System, Centrality. |
| JEL: | B59 E51 E52 E59 O23 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cdp:texdis:td444&r=geo |
| By: | Stephen Gibbons; Sandra McNally; Martina Viarengo |
| Abstract: | Improvement of educational attainment in schools in urban, disadvantaged areas is an important priority for policy - particularly in countries like England which have a long tail at the bottom of the educational distribution and where there is much concern about low social mobility. An anomaly in the spatial dimension of school funding policy in England allows us to examine the effect of increasing school expenditure for schools in urban areas. This anomaly arises because an 'area cost adjustment' is made in how central government allocates funds to Local Authorities (school districts) whereas, in reality, teachers are drawn from the same labour market and are paid according to national pay scales. This is one of the features that give rise to neighbouring schools on either side of a Local Authority boundary being allocated very different resources, even if they have very similar characteristics. We find that these funding disparities give rise to sizeable differences in pupil attainment in national tests at the end of primary school. This finding lends adds to the evidence that school resources have an important role to play in improving educational attainment and has direct policy implications for the current 'pupil premium' policy in England. |
| Keywords: | Urban schools, education, resources |
| JEL: | R0 I21 H52 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0090&r=geo |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity shocks in the model, are untenable. With either self insurance or insurance markets, and either an arbitrarily small cost of moving or the assumption that consumers do not perfectly observe the shocks to firms' technologies, the agents will never move. Even without these frictions, our analysis yields another equilibrium with insurance where consumers never move. Thus, insurance is a substitute for movement. We propose an alternative class of models, involving extreme risk against which consumers will not insure. Instead, they will move, generating a Fréchet distribution of city sizes that is empirically competitive with other models. |
| Keywords: | Zipf's Law; Gibrat's Law; Size Distribution of Cities; Extreme Value Theory |
| JEL: | R12 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33121&r=geo |
| By: | Waidlein, Nicole |
| Abstract: | Since the Second World War the West German states show persistent differences in their standard of living. The explanation of the incomplete catching-up process within West Germany is of crucial interest. After identifying productivity as the major growth driving force, this paper investigates the main causes of productivity growth on the state level between 1950 and 1990. With the help of growth theories different determinants of productivity growth are identified. These are innovations, secondary and tertiary human capital, structural change, openness and institutions. Finally, the empirical analysis reveals that three of those determinants are able to explain the persistent differences in the regional productivity levels: innovations, tertiary human capital and structural change. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:292011&r=geo |