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on Economic Geography |
| By: | Ketterer, Tobias; Rodríguez-Pose, Andrés |
| 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, socio-demographic 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: | amenities; economic conditions; Europe; inter-regional migration; location choice; regions; social networks |
| JEL: | O15 R23 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8964&r=geo |
| By: | Francis, Bill (Rensselaer Polytechnic Institute); Hasan, Iftekhar (Fordham University and Bank of Finland); John, Kose (Stern School of Business, New York University); Waisman , Maya (Fordham University – Finance Area) |
| Abstract: | An underlying assumption in the executive compensation literature is that there is a national labor market for CEOs. The urban economics literature, however, documents higher ability among workers in large metropolitans, which results in a real and stable urban wage premium. In this paper, we investigate the link between the spatial clustering of firms in big, central cities (i.e., urban agglomeration) and the level and structure of CEO compensation. Using CEO compensation data for the period 1992–2004, we document a positive relation between the size and centrality of the city in which the firm is headquartered and the total, as well as the equity based portion of CEO pay. Our results are robust to a host of control variables, sensitivity and endogeneity tests, indicating that urban agglomeration may reflect positive externalities, such as knowledge spillovers, business connections and improved access to private information that have a positive effect on CEO pay and incentive driven compensation for good performance. We document gradual human capital gains acquired from big city work experience that are transferable to the rural area, and rewarded for, once the CEO relocates into a smaller, less central community. Our tests provide novel evidence of information spillovers and networking opportunities in big cities that can directly affect how CEOs are compensated. Such sources of information and influence represent something for which firms are willing to pay higher and more incentive driven pay, evidence in favor of a market-based explanation for CEO compensation. |
| Keywords: | agglomeration; CEO; compensation; incentive; geography |
| JEL: | D83 G30 J31 R12 |
| Date: | 2012–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2012_017&r=geo |
| By: | Jordi Jofre-Monseny (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB)); Raquel Marín-López (Universitat de Barcelona & Institut d’Economia de Barcelona (IEB)); Elisabet Viladecans-Marsal (Universitat de Barcelona & Institut d’Economia 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: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:xrp:wpaper:xreap2012-08&r=geo |
| By: | Olivier Brossard; Inès Moussa |
| Abstract: | We suggest three theoretical propositions on the nature, channels and boundaries of knowledge spillovers, and we test them with knowledge production functions estimated on French NUTS 3 regions over 2002–2008. Several novelties are introduced. First, we quantify external R&D to complement the usual internal R&D variable and assess the effect of knowledge nature on knowledge spillovers. Second, we construct several measures of the quantity and quality of regional knowledge diffusion channels and introduce them in our knowledge production functions. Third, we test several spatial panel specifications to assess robustness and evaluate the geographical boundaries of various types of knowledge spillovers. All methods converge to provide evidence for the following: 1) spillovers from internal R&D are larger than spillovers from external R&D; 2) the quantity and quality of regional knowledge transmission channels are important determinants of regional innovation; and 3) industrial and technological diversity produce positive knowledge externalities, not only locally but also in the neighbourhood of French regions. |
| Keywords: | Knowledge spillovers, innovation, R&D, clusters |
| JEL: | R12 R15 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1207&r=geo |
| By: | Anthony Briant (SG-CIV - Secrétariat Général du Comité Interministériel des Villes - Ministère de la ville); Miren Lafourcade (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, 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, ADIS - Analyse des Dynamiques Industrielles et Sociales - Département d'Economie - Université Paris XI - Paris Sud); Benoît Schmutz (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, ADIS - Analyse des Dynamiques Industrielles et Sociales - Département d'Economie - Université Paris XI - Paris Sud, CREST - Centre de Recherche en Économie et Statistique - INSEE - École Nationale de la Statistique et de l'Administration Économique) |
| Abstract: | This paper providesempirical support to the intuitive statement that urban geography matters to the success or failure of place-based public policies, using the French enterprise zone program as a case study. According to the few existing evaluations, this program has only had a small positive average impact on firm and job creation rates. In addition, this impact was shown to be strongly heterogeneous across the treated neighborhoods may account for part of these results. We estimate a series of augmented difference-in-differences models in which we interact the treatment indicator with a series of original indicators of spatial isolation, wich account for severance, peripherality and disconnection to transportation networks within the urban area. Results indicate that isolation does matter to explain spatial differentials in job creation and firm settlement rates across enterprise zones: only accessible neighborhoods were able to draw benefits from tax breaks and social exemptions. moreover, whereas the program mostly worked through a displacement effect on pre-existing firms, we show that urban geography was a clear determinant of the decision to create new firms from scratch. |
| Keywords: | Enterprise Zones ; Spatial Isolation ; Transportation Accessibility ; Urban Severance |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00695225&r=geo |
| By: | Filipe R. Campante (Harvard Kennedy School, Harvard University); Quoc-Anh Do (School of Economics, Singapore Management University) |
| Abstract: | We show that isolated capital cities are robustly associated with greater levels of corruption across US states. In particular, this is the case when we use the variation induced by the exogenous location of a state’s centroid to instrument for the concentration of population around the capital city. We then show that different mechanisms for holding state politicians accountable are also affected by the spatial distribution of population: newspapers provide greater coverage of state politics when their audiences are more concentrated around the capital, and voter turnout in state elections is greater in places that are closer to the capital. Consistent with lower accountability, there is also evidence that there is more money in state-level political campaigns in those states with isolated capitals. We find that the role of media accountability helps explain the connection between isolated capitals and corruption. In addition, we provide some evidence that this pattern is also associated with lower levels of public good spending and outcomes. |
| Keywords: | Corruption; Accountability; Population Concentration; Capital Cities; US State Politics; Media; Turnout; Campaign Contributions; Public Good Provision |
| JEL: | D72 D73 L82 R12 R50 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:siu:wpaper:21-2012&r=geo |
| By: | Nakajima, Kentaro; Saito, Yukiko Umeno; Uesugi, Iichiro |
| Abstract: | Using a unique dataset of more than 140,000 manufacturing firms in Japan containing information on their suppliers and customers, this paper looks at the physical distances between transaction partners to examine the localization of transaction relationships. We find the following. First, based on a counterfactual that controls for the location of firms and their potential partners, transaction relationships in about 90 to 95% of the 150 three-digit manufacturing industries can be labelled as localized at distances of 40km or less. This indicates that physical distance is a key factor in firms' choice of transaction partners. Second, based on a counterfactual that controls for the average distance of transaction relationships in the manufacturing sector as a whole, we find that in about 40?% of industries transaction relationships are localized at short distances of up to 40km. Third, the extent of industrial localization and the extent of the localization of transaction relationships are positively correlated. However, there are a number of exceptions and we provide potential explanations for these. |
| Keywords: | Interfirm transactions, agglomeration, transaction distance |
| JEL: | R11 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:cinwps:17&r=geo |
| By: | Ogorevc, Marko; Verbič, Miroslav |
| Abstract: | The aim of our paper is to disentangle the relationship between ownership and wages using cross-section data for Slovenian medium size and large companies, where we account for spatial dependencies in wage determination. Space here is not considered in geographical context, but as a set of relations between firms originating from the same owner. Using a detailed database on Slovenian ownership, we apply a spatial econometric approach to detect any ownership-based wage spillovers, while accounting for different standard factors, such as size, capital intensity and productivity, and also some ownership-based variables, such as ownership concentration and ratio of cash-flow to control rights. Our results indicate that ownership is an important factor in explaining differences in wage levels. Many large owners divert cash-flow into their own pockets which has a detrimental effect on wages and indicates that this behaviour induced by owners is not sustainable. |
| Keywords: | spatial econometrics; ownership; wage differentials; sustainability |
| JEL: | J31 G32 C21 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:38915&r=geo |
| By: | Badi H. Baltagi; Yusuf Soner Baskaya; Timur Hulagu |
| Abstract: | This paper presents wage curves for formal and informal workers using a rich individual level data for Turkey over the period 2005-2009. The wage curve is an empirical regularity describing a negative relationship between regional unemployment rates and individuals' real wages. While this relationship has been well documented for a number of countries including Turkey, less attention has focused on how this relationship differs for informal versus formal employment. This is of utmost importance for less developed countries where informal employment plays a signifcant role in the economy. Using the Turkish Household Labor Force Survey observed over 26 NUTS-2 regions, we find that real hourly wages of informal workers in Turkey are more sensitive to variations in regional unemployment rates than wages of formal workers. This is true for all workers as well as for different gender and age groups. |
| Keywords: | Formal/Informal Employment, Wage Curve, Regional Labor Markets |
| JEL: | C26 J30 J60 O17 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:tcb:wpaper:1216&r=geo |
| By: | Roberto Antonietti; Giulio Cainelli; Claudio Lupi |
| Abstract: | In this paper we explore the relation between vertical disintegration and the co-localization of knowledge intensive business service (Kibs) in the metropolitan region of Milan, using micro-geographic data and nonparametric methods. Our main results are that: (i) compared to other manufacturing and service industries, Kibs show a natural tendency to cluster; (ii) this tendency increases with the degree of vertical disintegration of Kibs. |
| Keywords: | Co-localization, Kibs, Nonparametric methods, Vertical disintegration |
| JEL: | R12 L80 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpol:1202&r=geo |