nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒05‒02
twenty papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. The estimation of urban premium wage using propensity score analysis: some considerations from the spatial perspective By Dusan Paredes; Marcelo Lufin; Patricio Aroca
  2. Do large agglomerations lead to economic growth? evidence from urban India By Tripathi, Sabyasachi
  3. Public investment and regional growth and convergence: Evidence from Greece By Andrés Rodríguez-Pose; Yannis Psycharis; Vassilis Tselios
  4. Do local amenities affect the appeal of regions in Europe for migrants? By Andrés Rodríguez-Pose; Tobias D. Ketterer
  5. Geography and high-tech employment growth in U.S. counties By Fallah, Belal; Partridge, Mark
  6. Integrating regional economic development analysis and land use economics By Partridge, Mark D.; Rickman , Dan S.
  7. Country Road Take Me Home: Migration Patterns in the Appalachia America and Place-Based Policy By Partridge, Mark; Betz, Mike
  8. Spatial division of labor in Chile 1992-2002 By Miguel Atienza; Marcelo Lufin; Mauricio Sarrias
  9. What underlies localization and urbanization economies? Evidence from the location of new firms By Jordi Jofre-Monseny; Raquel Marín-López; Elisabet Viladecans-Marsal
  10. Spillover ed eterogeneità spaziali nei livelli d’efficienza delle amministrazioni locali: un’applicazione ai comuni dell’Emilia Romagna By Carlo Andrea Bollino; Gianfranco Di Vaio; Paolo Polinori
  11. The Two Faces of R&D and Human Capital: Evidence from Western European Regions By Johanna Vogel
  12. Large Mining Enterprises and Regional Development: Between the Enclave and Cluster By Andres Vallone; Miguel Atienza
  13. Public Sector Wage Bargaining, Unemployment, and Inequality By Gabriele Cardullo
  14. Regional Effects of Federal Tax Shocks By Bernd Hayo; Matthias Uhl
  15. Alternative theories for explaining the spatial wage inequality: a multilevel competition among human capital, NEG and amenities By Dusan Paredes
  16. Discursos sobre la Región de Antofagasta en el contexto de la migración regional By Luis Miguel Rodrigo
  17. Transportation policy networks in cross-border regions. First results from a social network analysis in Luxembourg and the Greater Region By DÖRRY Sabine; DECOVILLE Antoine
  18. Paternalistic goods to improve income distribution: a political economy approach By Rosella Levaggi; Francesco Menoncin
  19. Rural Household Income in China: Spatial-Temporal Disparity and Its Interpretation By Li, Yuheng
  20. Local Job Accessibility Measurement: When the Model Makes the Results. Methodological Contribution and Empirical Benchmarking on the Paris Region By Matthieu Bunel; Elisabeth Tovar

  1. By: Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Marcelo Lufin (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Patricio Aroca (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: This paper estimates the Urban Wage Premium for the Chilean case, but proposing three contributions to the literature. First, the geographical space is reconfigured using functional regions instead administrative regions. This process is carried out using techniques from the spatial econometric literature. Second, we exploit the use of micro data. We estimate the wage equation using a survey at individual level that avoids problems associated with regional aggregated specifications. Finally, we set the comparability among observations using matching comparison. Thus, we isolate the urban effect from other alternative sources. Our results suggest a Urban Wage Premium between 4 and 21%.
    Keywords: Size and Spatial Distributions of Regional Economic Activity
    JEL: R12
    Date: 2012–04
  2. By: Tripathi, Sabyasachi
    Abstract: The cities and towns of India constitute the world’s second largest urban system besides contributing over 50 per cent of the country’s Gross Domestic Product (GDP). This phenomenon has been neglected by the existing studies and writings on urban India. By considering 59 large cities in India and employing new economic geography models, this paper investigates the relevant state and city-specific determinants of urban agglomeration. In addition, the spatial interactions between cities and the effect of urban agglomeration on India’s urban economic growth are estimated. The empirical results show that agglomeration economies are policy-induced as well as market-determined and offer evidence of the strong positive effect of agglomeration on urban economic growth and support for the non-linearity of the Core-Periphery (CP) model in India’s urban system.
    Keywords: Urban Agglomeration; Urban Economic Growth; New Economic Geography; India
    JEL: O18 R12 R11
    Date: 2012–03–04
  3. By: Andrés Rodríguez-Pose (IMDEA Social Sciences); Yannis Psycharis (Panteion University); Vassilis Tselios (University of Groningen)
    Abstract: This paper estimates the impact of public investment on regional economic growth and convergence at the NUTS III level in Greece. Using a new database of public expenditure per region for the period 1978-2007, it proposes a model which captures not just the impact of public investment in Greek prefectures, but also the spillover effects related to the existence of externalities from neighbouring regions. The results point to a positive long-run impact of public investment per capita on regional economic growth – but not on convergence – which also generates considerable spillover effects. However, the returns vary according to different types of public investment, with education and infrastructure spillovers having the highest impact. In general, public investment externalities seem to be more relevant for regional growth than direct public investment in each region. Finally, the impact of different types of public investment in Greece is mediated by politics and political factors, but the effect of politics disappears once we control for political-period-specific spatial-invariant variables.
    Keywords: public investment; economic growth; spillover effects; convergence; spatial econometrics; regional economics; regional policy; Greece
    JEL: R11 R12 R53 R58
    Date: 2012–04–25
  4. By: Andrés Rodríguez-Pose (IMDEA Social Sciences); Tobias D. Ketterer (University of Nottingham)
    Abstract: This paper delves into the factors which determine the attractiveness of regions in Europe for migrants. Contrary to the literature on the US which has increasingly focused on the role of amenities, existing research in Europe tends to highlight the predominance of economic conditions as the main drivers of migration. Differentiating between economic, sociodemographic and amenity-related territorial features, we examine the appeal of various regional characteristics for migrants by analyzing net migration data for 133 European regions between 1990 and 2006. Our results show that, in addition to economic, human capital-related and demographic aspects, network effects and – in contrast to existing literature – different types of regional amenities exert an important influence on the relative attractiveness of sub-national territories across the European Union (EU). Our findings therefore indicate that locational choices in Europe may be much more similar to place-based preferences in the US than originally thought.
    Keywords: location choice; inter-regional migration; economic conditions; amenities; social networks; regions; Europe
    Date: 2012–04–25
  5. By: Fallah, Belal; Partridge, Mark
    Abstract: This paper investigates the role of geography in high-tech employment growth across U.S. counties. The geographic dimensions examined include industry cluster effects, urbanization effects, proximity to a research university, and proximity in the urban hierarchy. Growth is assessed for overall high-tech employment and for employment in various high-tech sub-sectors. Econometric analyses are conducted separately for samples of metropolitan and nonmetropolitan counties. Among our primary findings, we do not find evidence of positive localization or within-industry cluster growth effects, generally finding negative growth effects. We instead find evidence of positive urbanization effects and growth penalties for greater distances from larger urban areas. Universities also appear to play their primary role in creating human capital rather than knowledge spillovers for nearby firms. Quantile regression analysis confirms the absence of within-industry cluster effects and importance of human capital for counties with fast growth in high-tech industries.
    Keywords: High-tech industries; employment growth; regional growth
    JEL: O18
    Date: 2012
  6. By: Partridge, Mark D.; Rickman , Dan S.
    Abstract: Two largely separate literatures exist on regional economic development and land use economics. In this chapter, we argue that a full understanding of each of the two areas requires greater knowledge of their interrelationship. We review key studies of the two literatures, particularly those related to the close interconnectedness of regional economic development and land use. We contend that a critical shortcoming in the literatures is that key features that affect both land use and economic activity are typically not systematically considered. We then posit that the spatial equilibrium framework is especially suited for understanding the various feedback mechanisms that affect both. Also particularly promising are the increased availability of GIS and micro data, as well as recent methodological advances in empirical estimation and modeling.
    Keywords: Regional Economic Development; Land Use Economics
    JEL: O18 R14
    Date: 2012
  7. By: Partridge, Mark; Betz, Mike
    Abstract: This research fills a void in the regional development literature by assessing how labor force migration affects regional adjustment in peripheral regions and whether it differs than the rest of the country. We do this by comparing patterns for the lagging Appalachian region to the U.S. as a whole for the 1990s and post-2000 periods. We appraise whether successful job creation helps the original residents seeking employment, or primarily goes to outsiders, rendering place-based development policy ineffective. In a novel addition, we also appraise whether local job creation is associated with attracting relatively wealthier net-migrants. Because different relative migration elasticities imply different responses for other labor market outcomes, we also assess whether employment growth supports original residents in terms of lifting median household incomes and employment/population rates and reducing unemployment rates and poverty rates. We find that migration post-2000 has become less responsive to employment growth differentials, which allows successful economic development to lift the employment prospects of original residents, which also produces a stronger response in reducing local poverty rates.
    Keywords: Migration; appalachia; regional economic development
    JEL: O18 R23
    Date: 2012
  8. By: Miguel Atienza (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Marcelo Lufin (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Mauricio Sarrias (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: The article describes functional specialization of the Chilean municipalities ("comunas"), controlling for their industrial mix between 1992 and 2002 with information from the Population and Housing Censuses. The analysis of global and local spatial auto-correlation of indices of functional specialization shows the existence of a pattern of spatial division of labor characterized by the strong specialization of the Metropolitan Region in occupations of higher cognitive-cultural skills. In contrast, the other "comunas" are specialized in routine physical functions that require medium or low levels of qualification. This pattern raises doubts about the validity of the current development strategy of the country.
    Keywords: Division of labor, industrial mix, occupational mix, regional inequality
    JEL: L23 O15 O18 R11
    Date: 2012–03
  9. By: Jordi Jofre-Monseny (Universitat de Barcelona & IEB); Raquel Marín-López (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries (three-digit level). First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. In a second step, we regress these estimates on industry characteristics that are related to the potential importance of three agglomeration theories, namely, labor market pooling, input sharing and knowledge spillovers. Localization effects are low and urbanization effects are high in knowledge-intensive industries, suggesting that firms (partly) locate in large cities to reap the benefits of inter-industry knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry-specific, suggesting that industries (partly) locate in specialized economic environments to share a common pool of specialized workers.
    Keywords: Agglomeration economies, manufacturing industries, localization economies, urbanization economies, specialization
    JEL: L25 L60 R12 R30
    Date: 2012
  10. By: Carlo Andrea Bollino; Gianfranco Di Vaio; Paolo Polinori
    Abstract: The aim of this work is to identify the existence of spatial spillover and spatial heterogeneity in local government efficiency, by using data from a newly constructed database about 341 municipalities from the Italian region Emilia-Romagna. The methodology is based on a two-step procedure. In the first step, cost efficiency scores are estimated by means of non-parametric Data Envelopment Analysis (DEA). In the second step, an Exploratory Spatial Data Analysis (ESDA), which is based on Moran’s I statistic, is applied to the efficiency scores computed in the previous step. Results show that municipalities are cost inefficient, on average, and that positive spatial externalities, in the form of positive spatial autocorrelation, influence the efficiency performance of local government. In particular, municipalities with a high degree of cost efficiency are surrounded by municipalities with a similar level of efficiency and vice versa. At the same time, results also show the existence of relevant spatial heterogeneity. Particular attention has been paid to the heterogeneity coming from outlying observations. Spatial spillovers provide evidence favoring theories of yardstick competition or phenomena like monitoring, benchmarking and knowledge transfer across space. At the same time, the presence of relevant spatial heterogeneity should be further investigated.
    Keywords: Data Envelopment Analysis, ESDA – Exploratory Spatial Data Analysis, local government efficiency, outliers
    JEL: C21 C61 R38
    Date: 2012–02–01
  11. By: Johanna Vogel
    Abstract: This paper investigates two channels through which research and development (R&D) and human capital may affect regional total factor productivity growth in the manufacturing sector, using panel data on 159 EU-15 regions from 1992 to 2005. Based on the endogenous growth model of Griffith, Redding and Van Reenen (2003), we allow R&D and human capital to influence productivity growth both directly, reflecting own innovation, and indirectly, reflecting imitation of frontier technology. Further, the model allows for conditional convergence to a long-run level of TFP relative to the frontier. We also develop an extension that captures geographically localised technology spillovers. Our preferred system-GMM estimates provide evidence of a positive and significant direct effect of human capital, and a positive and significant indirect effect of R&D on productivity growth. This may be interpreted as lending support to the recent focus of EU regional policy on raising educational attainment and R&D expenditures, although their channels of influence appear to differ. Our results also suggest that TFP convergence has taken place over our sample period and that geographic distance to the technology frontier matters.
    Keywords: Total factor productivity, Convergence, Human capital, Research and development, European regions
    JEL: O30 O47 I25 C23
    Date: 2012
  12. By: Andres Vallone (IDEAR - Department of Economics, Universidad Católica del Norte - Chile); Miguel Atienza (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: Over the last century, Chile has experienced a demographic and economic transformation that has shaped its economic geography. This article examines the evolution of the chilean urban system between 1885 and 2002. We estimate changes in the Zipf coefficient and the stability of the hierarchy of urban centers based on information from the Population and Housing Censuses. The results show a marked trend towards the formation of an increasingly asymmetrical system of cities that does not satisfy Zipf's law in the last two decades. At the same time, the hierarchy of cities has tended to be more stable, with a clear dominance of large cities that existed at the end of the nineteenth century and an increasing reduction in the variability among low-ranking cities.
    Keywords: Zipf law, urban economics, development
    JEL: R11 R12 O10
    Date: 2012–03
  13. By: Gabriele Cardullo (DIEM, Faculty of Economics, University of Genoa, Italy)
    Abstract: In many countries, the government pays almost identical nominal wages to workers living in regions with notable economic disparities. In most cases this is the result of highly centralized pay systems. By developing a two-region general equilibrium model with unions and search frictions in the labour market, I study the differences in terms of unemployment, real wages, and inequality between a regional wage bargaining process and a national one in the public sector. Adopting the former lowers public sector real salaries but it also decreases unemployment and jacks up private sector real earnings. Simulations conducted on the basis of Italian data show that, compared to a national negotiation process, a regional one also increases inequality both within and between regions.
    Keywords: public sector wages; unemployment; economic integration; local labour markets
    JEL: H53 J38 J64 R12 R13
    Date: 2012–02
  14. By: Bernd Hayo (University of Marburg); Matthias Uhl (University of Marburg)
    Abstract: This paper studies regional output asymmetries following U.S. federal tax shocks. We estimate a vector autoregressive model for each U.S. state, utilizing the exogenous tax shock series recently proposed by Romer and Romer (2010) and find considerable variations: estimated output multipliers lie between –0.2 in Utah and –3.3 in Hawaii. Statistically, the difference between state and national output effect is significant in about half the U.S. states. Analyzing the determinants of differences in the magnitude of regional tax multipliers suggests that industry composition of output and sociodemographic characteristics help explain the observed asymmetry across U.S. states in the transmission of federal tax policy.
    Keywords: Fiscal Policy Tax Policy Narrative Approach U.S. States Regional Effects Asymmetries in Fiscal Policy Transmission
    JEL: E32 E62 H20 R10 R11
    Date: 2012
  15. By: Dusan Paredes (IDEAR - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: This paper presents an empirical framework for analyzing the spatial wage inequality in a Latin American country: Chile. This country is mainly characterized by two stylized facts: the high spatial concentration around metropolitan areas and the key role of natural resources. We consider both elements with a competition between NEG versus amenity framework. Both theories are combined with human capital through a Multilevel Analysis. The results show the low performance of NEG for Chile and how the natural resources are a winner causal mechanism for the case. Additionally, the spatial wage variability is extremely small when it is compared with the wage variation at individual level.
    Keywords: Spatial wage inequality, spatial concentration, natural resources, NEG, amenity framework, wage variation at individual level
    Date: 2012–04
  16. By: Luis Miguel Rodrigo (ORDHUM - Department of Economics, Universidad Católica del Norte - Chile)
    Abstract: This work aims to fill the existing gap on the social representation of regions and how it affects the process of internal migration. The case of the Region of Antofagasta, a mining region in Northern Chile, is analyzed. It is widespread the idea that this region has a negative image in the rest of the country which reduces the region appeal as a work, residence and tourism place. We did not have, however, empirical information about this image. We use the sociological discourse analysis with information obtained from six discussion groups of university undergraduates from the regions of Coquimbo, Metropolitan and Valdivia in order to (re)construct the social discourses that form the social representation of the Region of Antofagasta and mining northern Chile from the framework of work migration.
    Keywords: Social representation, mining cities, regional migration, discussion groups, sociological discourse analysis
    JEL: R23 Z13
    Date: 2012–03
  17. By: DÖRRY Sabine; DECOVILLE Antoine
    Abstract: Despite continuing processes of economic and political integration in the European Union (EU), borders have been proven to be persistent. Politically backed and financially supported by the EU, cross-border regions are subject to economic and cultural coalescence. However, the established top-down crossborder policy network structures do not necessarily lead to the results originally aimed at. Policy networks are supposed to make the proclaimed economic, socio-cultural, and spatial EU integration process work on a local level. By empirically analysing cross-border policy networks in one specific though highly central policy domain – the public transportation – we reveal contradictions/inconsistencies and impediments caused by the „border effect? and the complex nature of a specific cross-border policy network in the field of public transportation. With the technique of the social network analysis we trace and discuss such a kind of network. Our empirical findings lead us to critically examine what Hooghe and Marks (2003) describe as „type-II-governance? in crossborder regions.
    Keywords: Cross-border metropolitan regions; public transportation; Luxembourg and the Greater Region; social network analysis; multi-level governance
    JEL: F15 F16 R50 R58
    Date: 2012–04
  18. By: Rosella Levaggi (Economics Department, University of Brescia, Italy); Francesco Menoncin (Economics Department, University of Brescia, Italy)
    Abstract: In this article we show that when the provision of paternalistic goods is entwined with income distribution, the political decision process may prevent welfare maximisation. We model the decision process from a political economy perspective by assuming that the quantity of a paternalistic good to be produced, its regional distribution, and the equalisation grant are the result of a utilitarian bargaining process between a (relatively) rich Region and a poor one. Two cases are considered: a unitary and a federal State. The solution for a unitary State shows that First Best can be achieved only if the two Regions have the same bargaining power. In this case the level of income distribution is negatively correlated with the power of the rich Region. For a federal State we show that the result of the bargaining process always implies underprovision of the paternalistic good. Our model may explain the observed cross-national differences in the redistributive power of public policies.
    Keywords: Paternalistic Goods, Income Distribution
    JEL: I18 H77
    Date: 2012–04
  19. By: Li, Yuheng (China Economic Research Center)
    Abstract: This paper investigates the spatial-temporal disparity evident in rural household incomes at the provincial level in China in the period 1978-2007. The research is introduced through a framework comprising the transitional processes of decentralization, marketization, urbanization, and globalization. The research uses Moran’s I index and the spatial regression model. Research results show a clear spatial-temporal disparity in rural household incomes in China in the post-reform era, whereby the eastern provinces possess higher rural household incomes in comparison to the lower rural household incomes of the inland provinces. This disparity is attributed to the joint influence of processes of marketization, urbanization, and globalization upon household incomes derived from the non-agricultural industries. Decentralization proves to be non-significant in explaining the disparity in rural household incomes across China, as a result of the agricultural income generated from the limited household land allocated to each rural household.
    Keywords: Rural household income; spatial-temporal; Moran’s; transitional process; China
    JEL: N95 O11 R11 R58
    Date: 2012–04–18
  20. By: Matthieu Bunel; Elisabeth Tovar
    Abstract: This paper focuses on local job accessibility measurement. We propose an original model that uses national exhaustive micro data and allows for i) a full estimation of job availability according to an extensive set of individual characteristics, ii) a full appraisal of job competition on the labour market and iii) a full control of frontier effects. By matching several exhaustive micro data sources on the Paris region municipalities, we compare the results produced by this benchmark model to a representative set of alternative models, we show that the model may indeed make the results as far as local job accessibility is concerned. Significant empirical differences do stem from the use of different Local Job Accessibility measures. Moreover, these differences are spatially differentiated across the Paris region municipalities. In particular, we show that failing to use a model where job availability is fully estimated according to individual characteristics may lead to the over-estimation of the job accessibility levels of notably under-privileged municipalities.
    Keywords: job accessibility measurement, Paris Region, benchmarking, geo-referenced microdata
    JEL: R11 J61
    Date: 2012

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