nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒10‒01
twelve papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Regional environmental efficiency and economic growth: NUTS2 evidence from Germany, France and the UK By Halkos, George; Tzeremes, Nickolaos
  2. Spatial frictions By Behrens, Kristian; Mion, Giordano; Murata, Yasusada; Südekum, Jens
  3. Cities in Transition By Oleksandr Shepotylo
  4. Income inequality, decentralisation and regional development in Western Europe By Vassilis Tselios; Andrés Rodríguez-Pose; Andy Pike; John Tomaney; Gianpiero Torrisi
  5. Slum Clearance and Urban Renewal in the United States By William J. Collins; Katharine L. Shester
  6. A non linear model of the new economic geography for Portugal. Another perspective By Martinho, Vítor João Pereira Domingues
  7. Do rent-seeking and interregional transfers contribute to urban primacy in sub-Saharan Africa? By Kristian Behrens; Alain Pholo Bala
  8. The Competitiveness of Global Port-Cities: The Case of the Seine Axis (Le Havre, Rouen, Paris, Caen) - France By Olaf Merk; César Ducruet; Patrick Dubarle; Elvira Haezendonck; Michael Dooms
  9. Regional Inequality in Contemporary China By Qinghua Zhang; Heng-fu Zou
  10. Health is wealth: an empirical note across the US states By Alexiadis, Stilianos; Eleftheriou, Konstantinos
  11. Measuring Economic Localization: Evidence from Japanese Firm-level Data By Nakajima, Kentaro; Saito, Yukiko Umeno; Uesugi, Iichiro
  12. Sectoral Productivity, Structural Change and Convergence By Alison Stegman

  1. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper by applying nonparametric techniques measures spatial environmental heterogeneities of 98 regions from Germany, France and the UK. Specifically environmental performance indexes are constructed for the 98 regions (NUTS 2 level) identifying their ability to produce higher growth rates and reduce pollution (in the form of municipal waste) generated from regional economic activity. By applying conditional stochastic kernels and local constant estimators it investigates the regional economic activity – environmental quality relationship. The results indicate several spatial environmental heterogeneities among the examined regions. It appears that regions with higher GDP per capita levels tend to have higher environmental performance.
    Keywords: Regional environmental efficiency; directional distance function; conditional stochastic kernel; nonparametric regression
    JEL: Q50 O13 C60
    Date: 2011–09
  2. By: Behrens, Kristian; Mion, Giordano; Murata, Yasusada; Südekum, Jens
    Abstract: The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three different levels: Do spatial frictions matter for the city-size distribution? Do they affect individual city sizes? Do they contribute to the productivity advantage of large cities and the nature of competition in cities? The short answers are: no, yes, and it depends.
    Keywords: city-size distribution; markups; productivity; trade frictions; urban frictions
    JEL: F12 R12
    Date: 2011–09
  3. By: Oleksandr Shepotylo (Kyiv School of Economics, Kyiv Economic Institute)
    Abstract: Cities in transition face a unique set of challenges that came forth due to interplay of the legacy of socialist urban policies and transition to the market economy. The socialist urban policies restrained growth of the largest cities and distorted the spatial equilibrium towards more uniform distribution of urban population. The transition to the market economy reduces distortions but the convergence is slow. Housing market rigidities, inadequate urban infrastructure, and inconsistent government policies prevent people from moving to the largest cities.
    Keywords: urban development, transition, cities, Zipf's law, local governance, housing market
    JEL: P25 R12 R23
    Date: 2011–09
  4. By: Vassilis Tselios (University of Groningen); Andrés Rodríguez-Pose (IMDEA Social Sciences Institute); Andy Pike (Newcastle University); John Tomaney (Newcastle University); Gianpiero Torrisi (Newcastle University)
    Abstract: This paper deals with the relationship between decentralisation, regional economic development, and income inequality within regions. Using multiplicative interaction models and regionally aggregated microeconomic data for more than 100,000 individuals in the European Union (EU), it addresses two main questions. First, whether fiscal and political decentralisation in Western Europe has an effect on within regional interpersonal inequality. Second, whether this potential relationship is mediated by the level of economic development of the region. The results of the analysis show that greater fiscal decentralisation is associated with lower interpersonal income inequality, but as regional income rises, further decentralisation is connected to a lower decrease in inequality. This finding is robust to the measurement and definition of income inequality, as well as to the weighting of the spatial units by their population size.
    Keywords: Income inequality; income per capita; fiscal and political decentralization; interaction; regions; Europe
    Date: 2011–09–16
  5. By: William J. Collins; Katharine L. Shester
    Abstract: We study the local effects of the Housing Act of 1949, which established a federally subsidized program that helped cities clear areas for redevelopment, rehabilitate deteriorating structures, complete comprehensive city plans, and enforce building codes. We use an instrumental variable strategy to estimate the program’s effects on city-level measures of median income, property values, employment and poverty rates, and population. The estimates are generally positive and economically significant, and they are not driven by differential changes in cities’ demographic composition. The results are consistent with a model of spatial equilibrium in which local productivity is enhanced.
    JEL: H7 K0 N12 R0
    Date: 2011–09
  6. By: Martinho, Vítor João Pereira Domingues
    Abstract: With this work we try to present a non linear model for Portugal based on the new economic geography. We built the model taking into account an analyse about the agglomeration process in Portugal, using the New Economic Geography models, in a non linear way. In a non linear way, of referring, as summary conclusion, that with this work the existence of increasing returns to scale and low transport cost, in the Portuguese regions, was proven and, because this, the existence of agglomeration in Portugal.
    Keywords: new economic geography; non linear models; Portuguese regions
    JEL: O18 C20 C50 R12
    Date: 2011
  7. By: Kristian Behrens; Alain Pholo Bala
    Abstract: We develop an economic geography model where mobile skilled workers choose to either work in a production sector or to become part of an unproductive elite. The elite sets income tax rates to maximize its own welfare by extracting rents, thereby influencing the spatial structure of the economy and changing the available range of consumption goods. We show that either unskilled labor mobility, or rent-seeking behavior, or both, are likely to favor the occurence of agglomeration and of urban primacy. In equilibrium, the elite may tax the unskilled workers but does not tax the skilled workers, and there are rural-urban transfers towards the agglomeration. The size of the elite and the magnitude of the tax burden that falls on the unskilled decrease with product differentiation and with the expenditure share for manufacturing goods. All these results are broadly in line with observed patterns of urban primacy and economic development in sub-Saharan African countries.
    Keywords: economic geography; rent-seeking; interregional transfers; urban primacy; Sub-Saharan Africa.
    JEL: D72 F12 R12
    Date: 2011
  8. By: Olaf Merk; César Ducruet; Patrick Dubarle; Elvira Haezendonck; Michael Dooms
    Abstract: This working paper offers an evaluation of the performance of the ports of the Seine Axis (Le Havre, Rouen, Caen and Paris), as well as an analysis of the impact of the ports on their territory and an assessment of policies and governance in this field. It examines declining port performance in the last decade and identifies the principal factors that have contributed to it. In addition, the report studies the potential for synergies between the different ports, and surveys impending developments that are likely to influence port performance. The effect of the ports on economic, social and environmental questions is studied and quantified where possible. The value added of the port cluster of Le Havre/Rouen is calculated and its interlinkages with other economic sectors and other regions in France delineated. The paper outlines the impact of the ports' operations, and shows how their activities spill over into other regions. The major policies governing the ports are assessed, along with policies governing transport and economic development, innovation, the environment and spatial planning. These include measures instituted by the port authorities, as well as by local, regional and national governments. Governance mechanisms at these different levels are described and analysed. A port reform package, implemented in 2011, has changed the roles of the principal actors within the ports, and initiatives at the regional level have been intensified. Based on the report's findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the ports on their territory.
    Keywords: transportation, ports, regional development, regional growth, urban growth, inter-regional trade, input-output
    JEL: D57 L91 R11 R12 R15 R41
    Date: 2011–09–14
  9. By: Qinghua Zhang (Peking University); Heng-fu Zou (CEMA, Central University of Finance and Economics)
    Date: 2011
  10. By: Alexiadis, Stilianos; Eleftheriou, Konstantinos
    Abstract: An attempt is made to establish the relation between risk-health factors (encapsulated in terms of obesity) and regional convergence, with special reference to the US states. The econometric results indicate that obesity does have an impact on regional growth and convergence. A preliminary examination of these findings shows harmful effects on the process of catching-up between ‘poor’ and ‘rich’ regions. Nevertheless, considerably more research is required before this relation can be discussed with confidence.
    Keywords: Health risk factors; obesity; regional convergence; US states
    JEL: R11 I10
    Date: 2011–02–26
  11. By: Nakajima, Kentaro; Saito, Yukiko Umeno; Uesugi, Iichiro
    Abstract: This paper examines location patterns of Japan’s manufacturing industries using a unique firm-level dataset on the geographic location of firms. Following the point-pattern approach proposed by Duranton and Overman (2005), we find the following. First, about half of Japan’s manufacturing industries can be classified as localized and the number of localized industries is largest for a distance level of 40 km or less. Second, several industries in the textile mill products sector are among the most localized, which is similar to findings for the UK, suggesting that there exist common factors across countries determining the concentration of industrial activities. Third, the distribution of distances between entrant (exiting) firms and remaining firms is, in most industries, not significantly different from a random distribution. These results suggest that most industries in Japan neither become more localized nor more dispersed over time and are in line with similar findings by Duranton and Overman (2008) for the UK. Fourth, a comparison with the service sector indicates that the share of localized industries is higher in manufacturing than in services, although the extent of localization among the most localized manufacturing industries is smaller than that among the most localized service industries, including financial service industries
    Keywords: Micro-geographic data, Economic geography
    JEL: R11
    Date: 2011–09
  12. By: Alison Stegman
    Abstract: The concept of convergence, defined either narrowly, through productivity or income per capita, or broadly, across a range of economic variables, has become fundamental to the way we assess, analyse and project economic growth in developing economies. To the extent that economic growth projections are designed to reflect empirical behaviour, there is a need to identify relationships between and within key projection variables. To date the empirical analysis of convergence has been controversial. There is a strong argument that economic growth should be projection at a detailed sectoral level (see McKibbin et al (2009)). In practice, data limitations mean that industry level relationships are difficult to uncover and macroeconomic aggregate behaviours are often imposed on disaggregated data. The analysis in this paper attempts to uncover the key cross country trends in sectoral level productivity data. Whilst productivity convergence is evident in some sectors, generally service sectors, it is not evident in others. In part, aggregate convergence trends across developed economies appear to be driven by structural change. We generalise this result and argue that a combination of convergence and structural development assumptions could improve the empirical relevance of economic growth projection models.
    Date: 2011–09

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