nep-geo New Economics Papers
on Economic Geography
Issue of 2011‒12‒13
forty papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Does economic geography matter for Pakistan? a spatial exploratory analysis of income and education inequalities By Ahmed, Sofia
  2. Séries longues d'emploi salarié régional sectoriel français 1967–2006 By Buda, Rodolphe
  3. Characteristics of Regional Industry-specific Employment Growth – Empirical Evidence for Germany By Matthias Duschl; Thomas Brenner
  4. Location Determinants of New Firms: Does Skill Level of Human Capital Really Matter? By Arauzo Carod, Josep Maria
  5. Innovation, Growth and Quality of Life: a Theoretical Model and an Estimate for the Italian Regions By Giorgio D'Agostino; Margherita Scarlato
  6. New Evidence on the Role of Regional Clusters and Convergence in China (1952-2008) By María Jesus Herrerias; Javier Ordóñez
  7. Resilience and Potential in Maritime Clusters By Cooke, Philip
  8. Regional Determinants of MNE's Location Choice in Transition Economies By Andrea Gauselmann; Philipp Marek
  9. Sectoral Shifts, Diversification and Regional Unemployment. Evidence From Local Labour Systems in Italy By Roberto Basile; Alessandro Girardi; Marianna Mantuano; Francesco Pastore
  10. Industrial Location and Space: New Insights By Liviano Solís, Daniel; Arauzo Carod, Josep Maria
  11. Determinants of internal migration in Kazakhstan By Aldashev, Alisher; Dietz, Barbara
  12. Regional dispersion of cooperation activities as success factor of innovation oriented SME By Stoetzer, Matthias-Wolfgang; Pfeil, Silko; Kaps, Katharina; Sauer, Thomas
  13. Cities and Green Growth: A Conceptual Framework By Stephen Hammer; Lamia Kamal-Chaoui; Alexis Robert; Marissa Plouin
  14. Local politics and economic geography By Berliant, Marcus; Tabuchi, Takatoshi
  15. Growth in a cross-section of cities: location, increasing returns or random growth? By Rafael González-Val; Jose Olmo
  16. Economic Development, Inequality and Poverty: An Analysis of Urban Violence in Colombia By Alexander Cotte Poveda
  17. How local are labor markets? Evidence from a spatial job search model By Manning, Alan; Petrongolo, Barbara
  18. Spatial patterns of adoption of just-in-time manufacturing By Adelheid Holl; Rafael Pardo; Ruth Rama
  19. Explaining local manufacturing growth in Chile : the advantages of sectoral diversity By Almeida, Rita; Fernandes, Ana M.
  20. Income inequality, regional disparities and fiscal decentralization in industrialized countries By Agnese Sacchi; Simone Salotti
  21. The complementary effects of proximity dimensions on knowledge spillovers By Emanuela Marrocu; Raffaele Paci; Stefano Usai
  22. Synergies and conflicts between EU policies and the objective of territorial cohesion By Riccardo Crescenzi; Fabrizio De Filippis; Fabio Pierangeli
  23. Multilevel citizens, new social risks and regional welfare By Luis Moreno
  24. Regional Capital Mobility in China: 1978-2006 By Yan, Isabel K.; Chan, Kenneth S.; Dang, Vinh Q.T.; Lai, Jennifer T.
  25. How Important is Geographical Agglomeration to Factory Efficiency in Japan's Manufacturing Sector? By FUKAO Kyoji; Victoria KRAVTSOVA; NAKAJIMA Kentaro
  26. Evolving into a Regional Innovation System: How Governance impact on Innovation in Shenzhen and Dongguan, China? By Wenying Fu; Javier Revilla Diez; Daniel Schiller
  27. The SADC's infrastructure : a regional perspective By Ranganathan, Rupa; Foster, Vivien
  28. China's Western Development Strategy: Policies, Effects and Prospects By Lu, Zheng; Deng, Xiang
  29. Industrial dynamics and economic geography: a survey By Koen Frenken; Elena Cefis; Erik Stam
  30. Selection in initial and return migration: Evidence from moves across Spanish cities By Jorge De la Roca
  31. Thünen and the New Economic Geography By FUJITA Masahisa
  32. “Sleepwalking towards Johannesburg”? Local measures of ethnic segregation between London’s secondary schools, 2003 – 2008/9. By Richard Harris
  33. The Effect of a Culturally Diverse Population on Regional Income in EU Regions By Stephan Brunow; Hanna Brenzel
  34. Spatial Exporters By Fabrice Defever; Benedikt Heid; Mario Larch
  35. Higher Quality Exhaustible Resource Deposits Receiving Higher or Lower Resource Rents in a Simple Spatial Framework By John Hartwick
  36. Home-field advantage or a matter of ambiguity aversion? Local bias among German individual investors By Baltzer, Markus; Stolper, Oscar; Walter, Andreas
  37. Combining benchmarking and chain-linking for short-term regional forecasting By Ángel Cuevas; Enrique M. Quilis; Antoni Espasa
  38. Policy-induced Social Interactions and Schooling Decisions By Matteo Bobba; Jérémie Gignoux
  39. Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective By Miguel, Francisco Javier de; Llop Llop, Maria; Manresa, Antonio, 1954-
  40. Revealing Taste-Based Discrimination in Hiring: A Correspondence Testing Experiment with Geographic Variation By Carlsson, Magnus; Rooth, Dan-Olof

  1. By: Ahmed, Sofia
    Abstract: Generally, econometric studies on socio-economic inequalities consider regions as independent entities, ignoring the likely possibility of spatial interaction between them. This interaction may cause spatial dependency or clustering, which is referred to as spatial autocorrelation. This paper analyzes for the first time, the spatial clustering of income, income inequality, education, human development, and growth by employing spatial exploratory data analysis (ESDA) techniques to data on 98 Pakistani districts. By detecting outliers and clusters, ESDA allows policy makers to focus on the geography of socio-economic regional characteristics. Global and local measures of spatial autocorrelation have been computed using the Moran’s I and the Geary’s C index to obtain estimates of the spatial autocorrelation of spatial disparities across districts. The overall finding is that the distribution of district wise income inequality, income, education attainment, growth, and development levels, exhibits a significant tendency for socio-economic inequalities and human development levels to cluster in Pakistan (i.e. the presence of spatial autocorrelation is confirmed).
    Keywords: Spatial effects; spatial exploratory analysis; spatial disparities; income inequality; education inequality; spatial autocorrelation
    JEL: D31 O15 I21 O50 C21 R11
    Date: 2011
  2. By: Buda, Rodolphe
    Abstract: This paper presents a retropolation of regional sectoral employment's data series since 1967 to 2006. They have been computed from various INSEE's data series distributed along various nomenclatures. We present a technique based on 1° the "classical" (econometric + RAS) method and 2° a matrix algebraic method we have developed. We propose a regional-sectoral analysis of the employment based on spatial planning and employment policies retrospectives. This paper highlights the limits of analysis of economic activity, particularly related to employment, at a regional-sectoral level.
    Keywords: Long Run Time Series ; Retropolation ; Salaried Employment ; Region ; Branche ; Nomenclature ; Employment Policy ; Spatial Planning Policy
    JEL: R58 C82 J21 C19 R23
    Date: 2011–05
  3. By: Matthias Duschl (Department of Geography, Philipps University Marburg); Thomas Brenner (Department of Geography, Philipps University Marburg)
    Abstract: Regional growth dynamics significantly deviate from a normal process. Using industry-specific employment data for German regions, we find that the asymmetric Subbotin distribution is able to account properly for extreme positive and especially negative growth events. This result confirms previous studies on growth rates of firms and countries and fills an important research gap at the meso-level of regions. Furthermore, we show that regional growth patterns emerge to a considerable degree from the aggregation of micro-level firm growth rates distributions and that the knowledge intensity of the respective industries increases the regions’ risk of being effected by extreme growth events.
    Keywords: regional employment growth, stochastic characteristics, asymmetric Subbotin distribution, extreme negative growth events
    JEL: C46 C50 R11
    Date: 2011–12
  4. By: Arauzo Carod, Josep Maria
    Abstract: This paper is about the role played by stock of human capital on location decisions of new manufacturing plants. We analyse the effect of several skill levels (from basic school to PhD) on decisions about the location of plants in various industries and, therefore, of different technological levels. We also test whether spatial aggregation level biases the results and determine the most appropriate areas to be considered in analyses of these phenomena. Our main statistical source is the Register of Manufacturing Establishments of Catalonia (REIC), which has plant-level microdata on the locations of new manufacturing plants. Keywords: agglomeration economies, industrial location, human capital, count-data models, spatial econometrics.
    Keywords: Localització industrial, Recursos humans, Anàlisi espacial (Estadística), 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2011
  5. By: Giorgio D'Agostino; Margherita Scarlato
    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: O10 O41 O30 R11 R58
    Date: 2011–09
  6. By: María Jesus Herrerias (Université de la Méditerranée Aix Marseille II, GREQAM); Javier Ordóñez (Department of Economics, Universitat Jaume I (Castellón, Spain))
    Abstract: A new panel method is applied to the case of Chinese provinces to analyze the existence of club convergence in terms of per capita income, labor productivity, capital intensity, and total factor productivity from 1952 to 2008. The advantage of this approach is that it takes into account the heterogeneity of Chinese regions in a nonlinear time-varying framework, where more attention is paid to the spatial dimension. This time-varying approach outperforms other methods used in the relevant literature for an economy in transition, such as China, that has undergone a significant transformation over the period under consideration. Our results indicate that Chinese regions have converged into clubs. However, it is observed that Heilongjiang is diverging in terms of labor productivity and capital intensity, while Liaoning and Guizhou display similar patterns in terms of labor productivity, and Shanxi and Hebei in terms of capital intensity. These results indicate that specific economic packages need to be implemented in the clusters that were identified, with special attention to those regions that show a divergence behavior, in order to guarantee the sustainability and equality of regional growth.
    Keywords: Endogenous Unit Root Test, Club Convergence, Chinese regions
    JEL: C20 O18 O40 R11
    Date: 2011
  7. By: Cooke, Philip (University of Wales)
    Abstract: Theoretical analysis of the relevance of the concept of path dependence for regional analysis has made progress. This has occurred on the spatial process (or regional paradigm)dimension of spatial evolution Progress has also occurred after further reflections on the roles of ‘conventions’ in understanding the ‘soft institutional’ dimension of regional regime formation and change. This adds considerably to the more common ‘institutions and organisations’ aspects of governance structures for innovation regarding the typical analytical content of regional regime and innovation system analysis. In this paper the concepts of ‘relatedness’ and ‘transversality’ capture the processes of knowledge recombination for innovation classically introduced by Schumpeter. Two live cases are presented whereby regional relatedness of industry regarding ‘green’ competences, on the one hand, and engineering and materials processing, on the other, have resulted in new clusters or cluster trajectories. The exemplar cases come from either end of Europe, Sweden, in the first instance, Italy in the second. Both clearly support the new ‘transversal’ theory of cluster emergence
    Keywords: Region; Maritime Clusters; Relatedness; Transversality
    JEL: A14 O33 R11 R58
    Date: 2011–11–30
  8. By: Andrea Gauselmann; Philipp Marek
    Abstract: This paper analyses the impact of agglomeration effects, labour market conditions and other determinants on the location choice of MNEs in transition economies. We compare data from 33 regions in East Germany, the Czech Republic and Poland using a conditional logit model on a sample of 4,343 subsidiaries for the time period 2000-2010. The results show that agglomeration advantages, such as sectoral specialisation, a certain economic diversity as well as a region's economic and technological performance prove to be some of the most important pull factors for FDI in transition regions. In addition, the labour market factors prove to play an important role in the location of FDI.
    Date: 2011–12–01
  9. By: Roberto Basile; Alessandro Girardi; Marianna Mantuano; Francesco Pastore
    Abstract: Using local labour systems data, this work aims at assessing the effects of sectoral shifts and industry specialisation patterns on regional unemployment in Italy over the years 2004-2008, when huge worker reallocation caused by changes in the international division of labour occurred. Italy represents an interesting case study because of the high degree of spatial heterogeneity in local labour market performance and the well-known north-south divide. Furthermore, the presence of strongly specialised local labour systems (industrial districts) allows us to test whether industrial districts perform better than highly diversified urban areas thanks to the effect of agglomeration economies, or vice versa. Building on a semiparametric spatial autoregressive framework, our empirical investigation documents that sectoral shifts and the degree of specialisation exert a negative effect on unemployment dynamics. By contrast, highly diversified areas turn out to be characterised by better labour market performances.
    Date: 2011–12–01
  10. By: Liviano Solís, Daniel; Arauzo Carod, Josep Maria
    Abstract: This paper tries to resolve some of the main shortcomings in the empirical literature of location decisions for new plants, i.e. spatial effects and overdispersion. Spatial effects are omnipresent, being a source of overdispersion in the data as well as a factor shaping the functional relationship between the variables that explain a firm’s location decisions. Using Count Data models, empirical researchers have dealt with overdispersion and excess zeros by developments of the Poisson regression model. This study aims to take this a step further, by adopting Bayesian methods and models in order to tackle the excess of zeros, spatial and non-spatial overdispersion and spatial dependence simultaneously. Data for Catalonia is used and location determinants are analysed to that end. The results show that spatial effects are determinant. Additionally, overdispersion is descomposed into an unstructured iid effect and a spatially structured effect. Keywords: Bayesian Analysis, Spatial Models, Firm Location. JEL Classification: C11, C21, R30.
    Keywords: Localització industrial, Anàlisi espacial (Estadística), Estadística bayesiana, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2011
  11. By: Aldashev, Alisher; Dietz, Barbara
    Abstract: In this paper we analyze the determinants of interregional migration in Kazakhstan using quarterly panel data on region to region migration in 2008–2010. To the best of our knowledge this is the first study on interregional population flows in Central Asia. We find that migration is determined by economic factors, first of all income: People are more likely to leave regions where incomes are low and more likely to move to regions with a higher income level. Furthermore, mobility is larger between more populated regions. Distance has a strong negative impact on migration, indicating high migration related costs and risks. Assuming that high migration costs are caused by poor infrastructure, investments in public and social infrastructure should facilitate regional income convergence in Kazakhstan and improve living standards in depressed regions.
    Keywords: Interregional migration; Kazakhstan; Gravity model
    JEL: P36 J61 R23
    Date: 2011–10
  12. By: Stoetzer, Matthias-Wolfgang; Pfeil, Silko; Kaps, Katharina; Sauer, Thomas
    Abstract: In this paper, we analyze the relationships between different types of innovation and collaboration, given the varying geographical distance of the latter. The study is based on the data of the research project 'KompNet 2011 - Factors determining the success of regional innovation networks', which examines the innovation activities of small and medium-sized enterprises (SME) in and closely around Jena (Thuringia). The aim of this paper is to explore to what extent spatial reach of collaboration linkages determines innovation orientation and innovative behavior. That means: Innovation performance could be positively related to (a) to a high intensity of local collaboration, (b) the intensity of international collaboration or (c) neither regional nor (inter)national collaborations. In a first step we summarize the relevant literature which comprises aspects of our central subject under investigation. We additionally discuss the necessity of keeping in mind several control variables for theoretical and empirical reasons. In the following we present descriptive analyses relating to the regional reach of collaboration in general, the impact of collaboration on innovation and the links between the regional reach of cooperation and different forms of innovation, i.e. product, process, marketing and organizational innovation. In a final step we discuss the results of several regression models. We observe that there is no significant influence of the geographical variables on the innovative performance of SME. Therefore our findings suggest that innovative firms rely on collaboration partners at a variety of spatial distances. The results also show a significant and positive influence of the intensity of competition on the innovativeness of firms in all models. Furthermore product- and process innovations are created by firms with intensive cooperative activities to scientific institutions, while a wide variety of cooperation partners and a strong focus on quality leadership turns out to be important for the development of marketing- and organizational innovations. --
    Keywords: cooperation,geographical reach,innovation,intensity of competition,marketing innovation,organizational innovation,process innovation,product innovation,quality leadership,regional dispersion,SME,spatial distance
    JEL: D85 L10 O31 R12
    Date: 2011
  13. By: Stephen Hammer; Lamia Kamal-Chaoui; Alexis Robert; Marissa Plouin
    Abstract: This report examines the current state of knowledge about green growth in cities and outlines the key research questions and protocols that will guide the OECD Green Cities programme. It builds the case for an urban green growth agenda by examining the economic and environmental conditions that have pushed the green growth agenda to the forefront of policy debate and assessing the critical role of cities in advancing green growth. Section 1 lays the context for the paper, examining why green growth is important and how it can be defined in an urban context. Section 2 focuses on policies and tools that enable the transition to green growth in cities. It concludes with a proposal for a policy framework for an urban green growth agenda that is based on a set of hypotheses of desirable economic scenarios. Section 3 examines the main challenges to advancing an urban green growth agenda. It explores the roles that multi-level governance, measuring and monitoring tools and finance must play in delivering green growth in cities. The report concludes with suggestions for future research, including recommendations on how national policymakers responsible for regional and urban policies can advance an urban green growth agenda.
    Keywords: sustainable development, government policy, planning, global warming, regional, regional economics, urban sustainability, territorial, cities, urban, green growth, climate
    JEL: O1 O3 Q1 Q2 Q3 Q4 Q5 R1 R4 R5
    Date: 2011–12–06
  14. By: Berliant, Marcus; Tabuchi, Takatoshi
    Abstract: We consider information aggregation in national and local elections when voters are mobile and might sort themselves into local districts. Using a standard model of private information for voters in elections in combination with a New Economic Geography model, agglomeration occurs for economic reasons whereas voter stratification occurs due to political preferences. We compare a national election, where full information equivalence is attained, with local elections in a three district model. A stable equilibrium accounting for both the economic and political sectors is shown to exist. Restricting to an example, we show that full information equivalence holds in only one of the three districts when transportation cost is low. The important comparative static is that full information equivalence is a casualty of free trade. When trade is more costly, people tend to agglomerate for economic reasons, resulting in full information equivalence in the political sector. Under free trade, people sort themselves into districts, most of which are polarized, resulting in no full information equivalence in these districts. We examine the implications of the model using data on corruption in the legislature of the state of Alabama and in the Japanese Diet.
    Keywords: information aggregation in elections; informative voting; new economic geography; local politics
    JEL: D82 D72 R12
    Date: 2011–12–03
  15. By: Rafael González-Val (Universitat de Barcelona & IEB); Jose Olmo (Centro Universitario de la Defensa & City University London)
    Abstract: This article analyzes empirically the main existing theories on income and population city growth: increasing returns to scale, locational fundamentals and random growth. To do this we implement a threshold nonlinearity test that extends standard linear growth regression models to a dataset on urban, climatological and macroeconomic variables on 1,175 U.S. cities. Our analysis reveals the existence of increasing returns when per-capita income levels are beyond $19; 264. Despite this, income growth is mostly explained by social and locational fundamentals. Population growth also exhibits two distinct equilibria determined by a threshold value of 116,300 inhabitants beyond which city population grows at a higher rate. Income and population growth do not go hand in hand, implying an optimal level of population beyond which income growth stagnates or deteriorates.
    Keywords: Threshold nonlinearity test, locational fundamentals, multiple equilibria, random growth
    JEL: C12 C13 C33 O1 R0 R11
    Date: 2011
  16. By: Alexander Cotte Poveda
    Abstract: This paper analyses some determinants of urban violence in seven major Colombian cities. The empirical research is intended to explore variations in violence across these Colombian cities and the influence of these variations on Colombia´s economic development. In this study, several econometric data panel models and various estimate types are applied to control heterogeneity across the cities and to address endogeneity problems among the explanatory variables. The results show that education, poverty, inequality and the labour market are strong predictors of homicide rates in the seven Colombian cities. The results also demonstrate that city-level homicide rates depend on the city's level of development and the tendency of urban violence to persist over time. The findings thus demonstrate that factors such as inequality, poverty, education and the labour market influence urban violence, thereby generating negative effects on Colombia´s economic and social development.
    Date: 2011–11–28
  17. By: Manning, Alan; Petrongolo, Barbara
    Abstract: This paper uses data on very small UK geographies to investigate the effective size of local labor markets. Our approach treats geographic space as continuous, as opposed to a collection of non-overlapping administrative units, thus avoiding problems of mismeasurement of local labor markets encountered in previous work. We develop a theory of job search across space that allows us to estimate a matching process with a very large number of areas. Estimates of this model show that the cost of distance is relatively high - the utility of being offered a job decays at exponential rate around 0.3 with distance (in km) to the job - so that labor markets are indeed quite `local'. Also, workers are discouraged from applying to jobs in areas where they expect relatively strong competition from other jobseekers. The estimated model replicates fairly accurately actual commuting patterns across neighbourhoods, although it tends to underpredict the proportion of individuals who live and work in the same ward. Finally, we find that, despite the fact that labor markets are relatively `local', local development policies are fairly ineffective in raising the local unemployment outflow, because labor markets overlap, and the associated ripple effects in applications largely dilute the impact of local stimulus across space.
    Keywords: job search; local labor markets; location-based policies; ripple effects
    JEL: J61 J63 J64 R12
    Date: 2011–12
  18. By: Adelheid Holl; Rafael Pardo; Ruth Rama
    Abstract: In this paper we study the spatial pattern of Just-in-Time (JIT) adoption for a sample of medium-sized and large Spanish manufacturing firms. The recent literature has shown that location plays a significant role in the adoption of advanced technologies. We argue that the particular role location characteristics play for technology adoption depends on the type of technology. JIT differs from other advanced manufacturing technologies because it relates directly to the spatial coordination of a firms’ internal production organisation with its external productive environment and depends on the quality of the transport system. Our results confirm the distinctive role of location for JIT adoption even after controlling for industry and plant-specific differences. We find that JIT adoption is greater in smaller cities but with higher accessibility indicating that urban congestion in larger urban areas likely reduces the benefits that firms may obtain from JIT implementation.
    Date: 2011–03
  19. By: Almeida, Rita; Fernandes, Ana M.
    Abstract: This paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during a period characterized by high growth rates and rising regional income inequality (1992-2004). The findings are clear-cut. Locations with greater concentration of a particular sector did not experience faster growth in total factor productivity during this period. Rather, local sector diversity was associated with higher long-run growth in total factor productivity. However, there is no evidence that the diversity effect was driven by the local interaction with a set of suppliers and/or clients. The authors interpret this as evidence that agglomeration economies are driven by other factors, such as the sharing of access to specialized inputs not provided solely by a single sector, such as skills or financing.
    Keywords: Labor Policies,Economic Theory&Research,Economic Growth,Political Economy,Achieving Shared Growth
    Date: 2011–12–01
  20. By: Agnese Sacchi; Simone Salotti
    Abstract: In this paper we investigate the interactions among fiscal decentralization, income inequality and regional disparities, using a sample of 23 OECD countries over the period 1971-2000. We first explore the effects of fiscal decentralization on overall income inequality. We then test whether regional economic disparities influence the fiscal decentralization process. We use novel and robust measures of fiscal decentralization based on differences in the degree of both expenditure and tax autonomy. We also conduct several robustness checks to tackle the potential endogeneity and reverse causality issues. Our results highlight the importance both of the nature of fiscal decentralization – expenditure versus taxation – and of the extent to which responsibility and decision powers are really left to subcentral governaments. While a higher degree of tax decentralization is associated with higher overall income inequality within a country, high regional disparities seem to be correlated with lower expenditure decentralization.
    Keywords: tax decentralization, expenditure decentralization,regional economic disparities
    JEL: H70 H77 D31 R12
    Date: 2011–12
  21. By: Emanuela Marrocu; Raffaele Paci; Stefano Usai
    Abstract: The purpose of this paper is to analyse the effect of various proximity dimensions on the innovative capacity of 276 regions in Europe within a knowledge production function model, where R&D and human capital are included as the main internal inputs. We combine the standard geographical proximity with the institutional, technological, social and organizational ones to assess whether these externalities are substitutes or complements in channelling knowledge spillovers. Results show that all proximities have a significant complementary role in generating an important flow of knowledge across regions, with the technological closeness playing the most relevant role.
    Keywords: knowledge production; spillovers, proximity; human capital; weight matrix
    JEL: O31 R12 C31 O52 O18
    Date: 2011
  22. 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
  23. By: Luis Moreno
    Abstract: Europeanization implies that policies are to be shaped by considerations which go beyond the formal sovereignty of EU’s member states. Claims for autonomy within the EU have been put forward not only by ‘stateless’ nations within plural and compound states, but also by regions demanding self-government. More often than not, meso-governments do not need par force the rationalising intervention of state central bureaucracies and elites. Autonomous regions enjoy additional economic and political security offered by the European Union and are gradually accommodated in a post-sovereignty era of progressive trans-nationalization. The paper elaborates on the idea of multi-level citizenship as a ‘civility compound’ of collective attachments which favours regional territorial autonomy. Multiple identities expressed by Europeans are inserted in a variable continuum of territorial belongings and affinities grounded in values of human rights and solidarity. Both civil and political rights are being increasingly accomplished at the regional level of EU’s member states. The exercise of civil and political rights has ‘spilt over’ into social citizenship. Attention is paid to the aspirations of regions and sub-state layers of governance to carry out welfare expansion based upon arguments of optimality, accountability, legitimacy, partnership and recalibration.
    Date: 2011–03
  24. By: Yan, Isabel K.; Chan, Kenneth S.; Dang, Vinh Q.T.; Lai, Jennifer T.
    Abstract: We examine cross-region capital mobility in China and track how the degree of mobility has changed over time. The effects of fiscal and redistributive activities of different levels of government in China on private capital mobility are taken into account. Our results indicate that there was a significant improvement in capital mobility over time in China, particularly for private capital in the more developed regions. The central and provincial governments, via their taxation, spending, and transfers, loosen the relationship between private saving and investment and appear to promote capital mobility, particularly for less developed regions. There are considerable differences between more and less developed regions in terms of the degree of capital market integration and the improvement in capital mobility over time. The results have important policy implications on global re-balancing as well as regional development gap and risk-sharing within China.
    Keywords: Feldstein-Horioka; Chinese cross-region capital mobility; saving-investment relationship; Chinese capital market integration
    JEL: C23 C22 F21
    Date: 2011–08
  25. By: FUKAO Kyoji; Victoria KRAVTSOVA; NAKAJIMA Kentaro
    Abstract: In this paper, geographical spillover potential is modeled and empirically examined using factory-level data from Japan's Census of Manufactures. First, the efficiency of each factory is estimated using a non-parametric data envelopment analysis (DEA) model for each industry. Second, the geographical distances to the most efficient factory in the prefecture and Japan overall are estimated. Third, the determinants of the factories' performance are identified and estimated. We find that clustering occurs in each industry, and efficient factories concentrate in certain regions. The percentage of efficient firms out of the total number of firms is particularly high in the Chubu and Tohoku regions. The estimation results also suggest that proximity to the most efficient factories plays a statistically significant role in determining the efficiency of factories in Japan in most industries. However, this is not the case in high-tech industries.
    Date: 2011–12
  26. By: Wenying Fu; Javier Revilla Diez; Daniel Schiller
    Abstract: Governance constitutes elementary supportive infrastructure for regional innovation systems. This paper extends the evolutionary lens of governance into initial industrialization phase and examines the impact of their evolution into regional innovation systems on fostering innovation activities. Drawing on the empirical substances in Shenzhen and Dongguan, China, a path-dependent nature of institutional design on supporting innovation has been discovered. The paper shows that the dirigiste globalized production system in Shenzhen in 1980s has gradually evolved to a higher level of interactive regional innovation system than the grassroots globalized production system in Dongguan, where innovation is still passively managed by global players. Finally, policy implication is discussed for the construction of regional innovation systems under different governance modalities in the initial industrialization phase.
    Keywords: ego-networks, geographical proximity, innovation performance, knowledge networks, technological relatedness
    JEL: B15 R11 R12
    Date: 2011–11
  27. By: Ranganathan, Rupa; Foster, Vivien
    Abstract: Infrastructure improvements boosted growth in the Southern African Development Community (SADC) by 1.2 percentage points per capita per year during 1995-2005, mainly from access to mobile telephony. Road network improvements made small growth contributions, while power sector inadequacy had a negative impact. Infrastructure improvements that matched those of Mauritius, the regional leader, could boost regional growth performance by 3 percentage points. SADC's 15 member countries include small, isolated economies with island states, a mix of low- and middle-income countries, and larger countries with potentially large economies. The economic geography reinforces the importance of regional infrastructure development to create a larger market and greater economic opportunities. The region's infrastructure indicators are high for Africa. The regional road network is well-developed, and surface transport is comparatively cheap, but subject to delays and long-haul fees. An extensive railway system competes directly with road transport. With integration and improvements, SADC's ports could form an effective transshipment network. Air transport, dominated by South Africa, is the best in Africa. Electricity in southern Africa is well developed; the region leads Africa in generation capacity and low rates, but access is limited. ICT services are the most accessible among the regions, though expensive. Landlocked countries still need to be connected, and greater competition is needed to reduce costs. Completing and maintaining SADC's infrastructure will require $2.1 billion annually for a decade. For small countries, and large countries with small revenues, the burden may be insurmountable without external assistance.
    Keywords: Transport Economics Policy&Planning,Airports and Air Services,Infrastructure Economics,Transport and Trade Logistics,Roads&Highways
    Date: 2011–12–01
  28. By: Lu, Zheng; Deng, Xiang
    Abstract: China’s Western Development Strategy (WDS) has been carried out since 1999 with remarkable achievements, whereby Western China also experienced a rapid and stable development during the past decade. This paper analyzes policy actions and effects of WDS. The findings indicate that Western China’s economic development has experienced a dramatic reversion after implementation of WDS, which to a certain extent, proves that WDS has played a significant role in promoting western regions’ development. This paper also reveals some key constraints on Western China’s economic development and then offers a set of policy ideas for the next stage of Western development.
    Keywords: Western Development Strategy; Regional Policy; Policy effects; Western China
    JEL: E62 R58 R11
    Date: 2011–12–01
  29. By: Koen Frenken; Elena Cefis; Erik Stam
    Abstract: We review the literature on clusters and their effects on industrial dynamics as well on various lifecycle dynamics underlying the process of cluster formation and cluster dynamics. The review shows that there is little evidence that clusters enhance firm growth and survival. In the absence of localization economies, the emergence of clusters is best understood as an evolutionary process of capability transmission between parents firms and their spinoffs. We discuss various future research avenues and call for theorising based on firm heterogeneity as well as empirical research based on common methodological standards.
    Keywords: entry, exit, cluster, localization economies, lifecycle, firm heterogeneity
    JEL: L10 L20 R10
    Date: 2011–10
  30. By: Jorge De la Roca (CEMFI and IMDEA Social Sciences Institute)
    Abstract: This paper investigates the sorting of more productive workers into denser cities using administrative data for Spain that follow individuals continuously throughout their working lives. Migrants who move to denser cities are positively selected in terms of education, occupational skills, and individual productivity as proxied by premigration position in the local earnings distribution. However, not everyone is able to benefit equally from denser cities and this leads to a second round of sorting. Returnees are not only exante less productive than permanent migrants, but are also those who, following the first move, have least boosted up their earnings in denser cities.
    Keywords: selection; urban migration; return migration; skill sorting
    JEL: J61 R10 R23
    Date: 2011–11–24
  31. By: FUJITA Masahisa
    Abstract: In this paper, I explain Thünen's pioneering work on industrial agglomeration. In my opinion, Thünen's thinking on industrial agglomeration was not only amazingly advanced for his time, but in many respects remains novel even today. It is shown that if we unify Thünen's well-known theory on agricultural land use with this pioneering work on industrial agglomeration by using modern tools, then we essentially come up with a prototype of New Economic Geography model.
    Date: 2011–11
  32. By: Richard Harris
    Abstract: Because segregation is the spatial outcome of spatial processes is makes sense to measure it in spatially intelligent ways. To that end, this paper applies innovative methods of geocomputation with particular emphasis on local indices of ethnic segregation to examine the claim that London’s schools are “sleepwalking towards Johannesburg.” It does so by looking at the flows of pupils from primary to secondary schools, using them to analyse the spatial patterns that form in the distribution of ethnic groups between schools, and to determine the geographies of competition between schools. Those geographies are codified in the form of a spatial weights matrix to compare any school with its average competitor, giving a local index of segregation. The paper finds that although there is ‘segregation’ in the sense that the distribution of the ethnic groups differs from randomness, from a nearest school assignment and with some substantial differences between locally competing schools, the evidence, focusing on the Black African and Bangladeshi groups, is not that ethnic segregation is increasing but fluctuating with demographic changes over the period 2003 to 2008/9
    Keywords: ethnic segregation, London, secondary schools
    JEL: I28
    Date: 2011–11
  33. By: Stephan Brunow; Hanna Brenzel
    Abstract: After the crisis years of 2008 and 2009 EU countries followed different employment paths. Employment and wage levels, for instance, are quite unevenly distributed across Europe. Some of the EU countries expect labour shortages due to demographic change in the future. If this is the case, wages will rise when the shortages occur. From literature on migration it is well known that regions with relatively higher income levels and a lower risk of unemployment are typical destination countries for immigration. Thus, European regions might be expected to become rather mixed in cultural terms in the future. Despite the filling of the labour market and the redistribution of the resource of labour, the ultimate question raised in the discussion is whether there are additional gains or losses due to immigration. This work therefore focuses on the impact of migrants on regional GDP per capita for European regions. Does the proportion of foreigners in the labour force increase or lower regional income? Does the composition of non-natives with respect to their countries of origin matter? Both questions are addressed in this study while controlling for endogeneity. We provide evidence that immigration raises regional income and a tendency towards (roughly classified) dominant foreign-born groups reduces the costs of interaction and integration. Thus, in general immigration has a positive effect on regional performance and the costs of immigration in destination regions are balanced out. Depending on the labour market status of migrants, the regions of origin of migrants within the EU face a rise or decline in income as a result of the outflow.
    Keywords: Regional Income, Cultural Diversity, Effects of Immigration
    Date: 2011–12–01
  34. By: Fabrice Defever; Benedikt Heid; Mario Larch
    Abstract: In this paper, we provide evidence that expanding firms tend to serve new markets which are geographically close and culturally related to their prior export destinations. We quantify the impact of this spatial pattern using a Chinese firm-level data set. To ensure an exogenous set of potential new destinations (25 EU countries, US and Canada) and an exogenous timing of entry, we focus on firms that benefited from the abrupt end of the textile quota restrictions in 2005. Controlling for firmproduct and destination specific effects and ac- counting for possible multiple new export destinations we show that the probability to export to a country increases by 15 to 38 percent for each prior export destination with a geographical or cultural link with this country.
    Keywords: export destination choice, spatial correlation, firm-level customs data, MFA/ATC quotaremoval
    JEL: F12 F13 C25
    Date: 2011–12
  35. By: John Hartwick (Queen's University)
    Abstract: Kolstad.s (1994) model of intertemporal, competitive supply to a linear market from two distinct exhaustible resource deposits admits two di¤erent interior solutions . one with the low cost deposit "earning" the higher resource rent and the other with the low cost deposit "earning" the lower resource rent. This latter outcome turns on the initial size of the low cost deposit being significantly larger than the high cost deposit. We infer then that size can trump quality in the determination of the resource rent for a deposit, when geography is explicit.
    Keywords: exhaustible resource extraction, deposit quality, linear market
    JEL: D49 Q31 D21
    Date: 2011–09
  36. By: Baltzer, Markus; Stolper, Oscar; Walter, Andreas
    Abstract: We analyze the effect of geographic proximity on individual investors' portfolio choice. Using a unique data set which covers the common stockholdings of private households at regional banks in Germany, we document strong and consistent overinvestment in geographically close companies. Our results conclusively reject the presence of an informational advantage ('home-field advantage') of local over non-local investors. Instead, households' preference for local equity turns out to be familiarity-driven. We conclude that individual investors' local bias is induced by ambiguity aversion in the portfolio selection process rather than a trading strategy based on superior information about local companies. --
    Keywords: local bias,portfolio diversification,household finance,investor behaviour,ambiguity aversion
    JEL: G01 G11 G14
    Date: 2011
  37. By: Ángel Cuevas; Enrique M. Quilis; Antoni Espasa
    Abstract: In this paper we propose a methodology to estimate and forecast the GDP of the different regions of a country, providing quarterly profiles for the annual official observed data. Thus the paper offers a new instrument for short-term monitoring that allow the analysts to quantify the degree of synchronicity among regional business cycles. Technically, we combine time series models with benchmarking methods for forecast short-term quarterly indicators and to estimate quarterly regional GDPs ensuring their temporal and transversal consistency with the National Accounts data. The methodology addresses the issue of non-additivity taking into account linked volume indexes used by the National Accounts and provides an efficient combination of structural as well as short-term information. The methodology is illustrated by an application to the Spanish economy, providing real-time quarterly GDP estimates and forecasts at the regional level (i.e., with a minimum compilation delay with respect to the national quarterly GDP).
    Keywords: Forecasting, Spanish economy, Regional analysis, Benchmarking, Chain-linking
    JEL: C53 C43 C82 R11
    Date: 2011–12
  38. By: Matteo Bobba (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Jérémie Gignoux (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - INRA, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This paper considers a conditional cash transfer program targeting poor households in small rural villages and studies the effects of the geographic proximity between villages on individual enrollment decisions. Exploiting variations in the treatment status across contiguous villages generated by the randomized evaluation design, the paper finds that the additional effect stemming from the local density of neighboring recipients amounts to roughly one third of the direct effect of program receipt. Importantly, these spatial externalities are concentrated among children from beneficiary households. This suggests that the intervention has enhanced educational aspirations by triggering social interactions among the targeted population.
    Keywords: Spatial externalities ; Social interactions ; Peer effects ; Conditional cash transfers
    Date: 2011–11
  39. By: Miguel, Francisco Javier de; Llop Llop, Maria; Manresa, Antonio, 1954-
    Abstract: In this paper we simulate and analyse the economic impact that sectorial productivity gains have on two regional Spanish economies (Catalonia and Extremadura). In particular we study the quantitative effect that each sector’s productivity gain has on household welfare (real disposable income and equivalent variation), on the consumption price indices and factor relative prices, on real production (GDP) and on the government’s net income (net taxation revenues of social transfers to households). The analytical approach consists of a computable general equilibrium model, in which we assume perfect competition and cleared markets, including factor markets. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow us to identify those sectors with the greatest impact on consumer welfare as the key sectors in the regional economies. Keywords: Productivity gains, key sectors, computable general equilibrium
    Keywords: Productivitat (Economia), Catalunya -- Condicions econòmiques, Extremadura -- Condicions econòmiques, Sectors econòmics, 334 - Formes d'organització i cooperació en l'economia,
    Date: 2011
  40. By: Carlsson, Magnus (Linnaeus University); Rooth, Dan-Olof (Linnaeus University)
    Abstract: The standard correspondence testing experiment does not identify whether employer prejudice drives discriminatory behavior when hiring. This article proposes a new methodology using geographic variation to explore the link between employer attitudes toward ethnic minorities and the ethnic difference in callbacks for a job interview. Using already existing Swedish data we find that a randomly selected employer is more likely to discriminate against a minority job applicant in regions where the average employer has more negative attitudes.
    Keywords: field experiments on hiring, employer discrimination, negative attitudes, regional variation
    JEL: J64 J71
    Date: 2011–11

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