nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒02‒08
ten papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Flexible Employment and Cross-Regional Adjustment By Ioannis Kaplanis; Vassilis Monastiriotis
  2. External Benefits of Brownfield Redevelopment: An Applied Urban General Equilbirum Analysis By Niels Vermeer; Wouter Vermeulen
  3. Un Indicatore per la Lombardia e per le Province di Milano e Pavia (Nuova versione) By Donatella Baiardi; Carluccio Bianchi
  4. Strategic tax and public service competition among local governments By Lauridsen, Jørgen; Nannerup, Niels; Skak, Morten
  5. Foreign direct investment in provinces: A spatial regression approach to FDI in Vietnam By Esiyok, Bulent; Ugur, Mehmet
  6. Geographical Analysis of US Green Sector Industry Concentration By Register, D. Lane; Lambert, Dayton M.; English, Burton C.; Jensen, Kimberly L.; Menard, R. Jamey; Wilcox, Michael D.
  7. Regionale Wachstumseffekte der GRW-Förderung? - Eine räumlich-ökonometrische Analyse auf Basis deutscher Arbeitsmarktregionen By Björn Alecke; Timo Mitze; Gerhard Untiedt
  8. How Specialized is âtooâ Specialized? Outmigration and Industry Diversification in Nonmetropolitan Counties across America By Jackson, Ashley; Whitacre, Brian
  9. Does economic convergence with the European Union mean more FDI flows to an economy? Analysis on 5 Central and Eastern Europe countries By Alexe, Ileana; Tatomir, Cristina F.
  10. Analysis of Spatial Variation in Flood Risk Perception By Atreya, Ajita; Susana, Ferreira

  1. By: Ioannis Kaplanis; Vassilis Monastiriotis
    Abstract: Employment flexibility is commonly associated to greater labour mobility and thus faster cross-regional adjustments. The literature however offers very little hard evidence on this and quite limited theoretical guidance. This paper examines empirically the relationship between employment flexibility and cross-regional adjustment (migration) at the regional and local levels in the UK. Employment flexibility is associated to higher labour mobility (but only at a rather localised scale) and at the same time seems to reduce the responsiveness of migration to unemployment. This suggest that rising flexibility may be linked to higher persistence in spatial disparities, as intra-regional adjustments are strengthened while extraregional adjustments weakened.
    Keywords: Employment flexibility, regional migration, labour market adjustment
    JEL: R11 R23 J08 J61
    Date: 2012–01
  2. By: Niels Vermeer; Wouter Vermeulen
    Abstract: Does brownfield redevelopment warrant government support? We explore several external benefits in an urban general equilibrium framework. Preferences are modelled such that demand for housing units in the city is downward sloping, which yields a more general setup than the extreme open and closed city cases. We shed light on the relative importance of general equilibrium effects of nonmarginal redevelopment projects and we isolate the external benefits of the removal of a local nuisance, the exploitation of agglomeration economies and the preservation of open space at the urban fringe. A numerical application indicates that local nuisance and agglomeration effects may push social returns significantly beyond the value of redeveloped land that accrues to its owner. However, depending on the price elasticity of urban housing demand and the strength of agglomeration economies, the amount of preserved greenfield land may be small and it only generates additional benefits to the extent that direct land use policies fail to internalize its value as open space.
    Keywords: brownfield redevelopment, land use externalities, urban general equilibrium,benefit-cost analysis
    JEL: R13 R21 R52
    Date: 2012–01
  3. By: Donatella Baiardi (Department of Economics and Quantitative Methods, University of Pavia); Carluccio Bianchi (Department of Economics and Quantitative Methods, University of Pavia)
    Abstract: This paper aims to construct a high-frequency coincident indicator of economic activity for Lombardy and for the provinces of Milan and Pavia, by using the dynamic factor model approach introduced by Stock e Watson (1998a e 1998b). The principal component analysis is first used to summarize the information contained in a large dataset in a limited number of common factors capable of capturing the main features of local business fluctuations. The EM (Expectation Maximization) algorithm then allows to compute the desired territorial indicators by taking into account the official annual data on regional GDP or provincial valueadded growth.
    Keywords: Coincident Economic Activity Indicators, Italian Regions, Diffusion Indexes
    JEL: E32 C32 C82
    Date: 2012–01
  4. By: Lauridsen, Jørgen (Department of Business and Economics); Nannerup, Niels (Department of Business and Economics); Skak, Morten (Department of Business and Economics)
    Abstract: Tax and public service competition between local governments concerning localisation of new residents is analysed in a setting of economic spillovers which means that also a neighbouring region will benefit from localisation via demand of residents in a border region, (a so-called host region). We identify two basic Nash-equilibrium outcomes of the analysed tax-game. In one of these outcomes local tax rates will be different across the regions – a fact that appears important for (future) empirical studies of local tax competition. Due to the lack of adequate theoretical modelling, studies in this field have often demonstrated spatial dependence of local policy variables without identifying the source of interaction between decision-makers. Our theoretical findings prove to be robust to a range of important expansions of the basic simple framework.
    Keywords: Local tax competition; household locational choice; spillover effects; Nash-equilibria
    JEL: H21 H31 H71
    Date: 2011–12–01
  5. By: Esiyok, Bulent; Ugur, Mehmet
    Abstract: Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years, with unequal distribution between provinces and regions. We aim to contribute to the literature on locational determinants of FDI by accounting for spatial interdependence between 62 Vietnamese provinces from 2006-2009. For this purpose, we estimate a spatial lag model using maximum likelihood estimation method. We report existence of spatial dependence between provinces as well as spatial spill-over effects. The results are robust to different specifications for weight matrices and inclusion of different explanatory variables and/or proxies. We also report that conventional determinants of FDI such as market size, domestic investment, openness to trade, labour cost, education and governance, etc. are significant and remain robust to inclusion of spatial interdependence. The sign of the spatial dependence suggests that the distribution of FDI between provinces is subject to conglomeration effects.
    Keywords: Foreign direct investment; spatial dependence; conglomeration; Vietnam
    JEL: R12 F21 C31
    Date: 2011–12–20
  6. By: Register, D. Lane; Lambert, Dayton M.; English, Burton C.; Jensen, Kimberly L.; Menard, R. Jamey; Wilcox, Michael D.
    Abstract: This paper analyzes the geographic distribution of âgreen energyâ sector clustering in the lower 48 United States using recent developments in industry concentration analysis. Evidence suggests that the ten green energy subsectors and the aggregate of the firms comprising the green energy sector are regionally concentrated. Positive changes in industry concentration from 2002 to 2006 tended to be greatest in non-metropolitan counties, suggesting comparative advantage with respect to site location for the composite of firms making up these sectors.
    Keywords: Agglomeration, Location Quotient, Renewable Energy, Community/Rural/Urban Development, Industrial Organization, Research and Development/Tech Change/Emerging Technologies,
    Date: 2012
  7. By: Björn Alecke; Timo Mitze; Gerhard Untiedt
    Abstract: Die Gemeinschaftsaufgabe „Verbesserung der regionalen Wirtschaftsstruktur“ (GRW) ist das zentrale wirtschaftspolitische Instrument zur Förderung entwicklungsschwacher Regionen in Deutschland seit Ende der 1960er Jahre. Seit der deutschen Wiedervereinigung kommt es zudem flächendeckend in den neuen Bundesländern zur Förderung der privaten Investitionstätigkeit und wirtschaftsnahen Infrastruktur zum Einsatz. In dieser Untersuchung wird der Einfluss der GRW-Förderung auf das Produktivitätswachstum der 225 deutschen Arbeitsmarktregionen im Zeitraum von 1994 bis 2006 empirisch untersucht. Ausgangspunkt ist eine neoklassisch motivierte Konvergenzgleichung. Die Schätzergebnisse zeigen für verschiedene Modellspezifikationen einen signifikant positiven Einfluss der Förderung auf das Produktivitätswachstum der geförderten Arbeitsmarktregionen. Es wird gezeigt, dass sich die Konvergenzgeschwindigkeit für Regionen deutlich unterhalb ihres steady state nahezu verdoppelt. Um die Robustheit der Ergebnisse zu überprüfen, wird das klassische ökonometrische Modell schließlich um „räumliche“ Komponenten erweitert. Sowohl für das Spatial Durbin- und auch das Spatial Durbin Error-Modell ergeben sich negative Spillovereffekte der GRW-Förderung. Dieser indirekte Effekt bleibt stabil, wenn räumliche Lags weiterer erklärender Variablen in die Schätzgleichung aufgenommen werden. Er kann u.a. damit erklärt werden, dass die geförderte Region im Standortvergleich attraktiver wird und somit – wie politisch gewollt – Investitionen aus anderen Regionen „abzieht“. Im Resultat führen die negativen räumlichen Spillover-Effekte zu einer Verlangsamung der Konvergenzgeschwindigkeit, allerdings bleibt der Gesamteffekt der GRW-Förderung weiterhin positiv.
    Keywords: GRW-Förderung; Arbeitsmarktregionen; Konvergenz; Spatial-Durbin-Modell; Spatial Durbin Error-Modell; Spillover-Effekt
    Date: 2011–03
  8. By: Jackson, Ashley; Whitacre, Brian
    Abstract: Outmigration and industrial composition have separately been the focal points of a significant amount of research related to nonmetropolitan counties; however, few (if any) studies have explicitly looked at the relationship between the two topics. The primary objective of this research is to identify what industry specialization level is âtooâ specialized with regards to outmigration â that is, to determine the level where specialization begins to have a damaging effect on population change. County-level data from a variety of sources is used to explore the impact of both earnings-based and employment-based definitions of specialization on net migration in nonmetropolitan counties from 2000 â 2009. Two distinct techniques (ordinary least squares and average treatment effects) are then used to assess both the impact and causality of being âtoo specialized.â The results suggest that a variety of specialization thresholds exist across various industries, including some surprising positive influences of industry composition on migration rates.
    Keywords: Outmigration, Nonmetropolitan, Industrial Specialization, Industrial Diversification, Community/Rural/Urban Development,
    Date: 2012
  9. By: Alexe, Ileana; Tatomir, Cristina F.
    Abstract: In this paper we analyze the relationship between economic convergence with the European Union (EU) and foreign direct investment flows to 5 EU countries (Bulgaria, Czech Republic, Poland, Romania and Hungary) in the period 2001 – 2010, in order to determine if the process of economic convergence with the EU level influences FDI inflows in these economies. We use an economic convergence index, made up of real and structural convergence indexes, to assess the level of economic convergence. The study does not provide us with a clear response to our question. We report a tight relationship between convergence index and FDI inflows in Bulgaria, but quite divergent evolutions of the two variables in the case of Hungary.
    Keywords: convergence index; foreign direct investments; European Union
    JEL: F15 F23 F43
    Date: 2011–10
  10. By: Atreya, Ajita; Susana, Ferreira
    Abstract: We use hedonic property models to estimate the spatial variation in flood risk in the city of Albany, GA. In addition to knowing whether a property is in the floodplain, we have a unique dataset with actual inundation maps from tropical storm Alberto that hit Albany in 1994. In the absence of information on the structural damages caused by a flood, having information on the actual inundated area can be useful to tease out information effect of a new flood from potential reconstruction cost. We find that the discount in actually inundated properties is larger which supports our hypothesis that homeowners respond better to what they have visualized (âseeing is believingâ) and also the potential reconstruction cost in addition to information effect is capitalized in property prices.
    Keywords: Flood Risk, Inundation, Spatial, Discount, Environmental Economics and Policy, Land Economics/Use, Q, R,
    Date: 2012

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