nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒06‒13
twenty papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Trust and innovation activity in European regions: A geographic instrumental variables approach By Schild, Christopher-Johannes
  2. Spatial Fixed Effects and Spatial Dependence By Luc Anselin; Daniel Arribas-Bel
  3. Knowledge flows, knowledge externalities and regional economic development By Karlsson, Charlie; Gråsjö, Urban
  4. Does fiscal coopération increase local tax rates in urban areas? By Sylvie Charlot; Sonia Paty; Virginie Piguet
  5. Tendencias de la industria regional en Colombia By Helmuth Arias Gómez
  6. Technical and Structural Efficiency in Mexican Manufacturing: A Regional Approach By Juan Carlos Chávez; Felipe J. Fonseca
  7. The sclerosis of regional electricity intensities in Italy: an aggregate and sectoral analysis By Andrea Vaona
  8. Self-Organizing Maps and the US Urban Spatial Structure By Daniel Arribas-Bel; Charles R. Schmidt
  9. Urban Regions in Europe – Preconditions and Strategies for Growth and Development in the Global Economy By Gråsjö, Urban; Karlsson, Charlie
  10. Exploratory spatial data analysis using Stata By Maurizio Pisati
  11. Finite Sample Properties of Moran's I Test for Spatial Autocorrelation in Probit and Tobit Models - Empirical Evidence By P. Amaral; L. Anselin
  12. Local governments’ fiscal policy as a factor of urban development – evidence from Poland By Waśniewski, Krzysztof
  13. Social determinants of intra-regional dispersion of FDI in India By Kayam, Saime Suna; Ecer, Sencer; Gupta , R
  14. Spatial competition in the French supermarket industry By Stéphane Turolla
  15. Estimating the Local Economic Impacts of University Activity Using a Bill of Goods Approach By Zoë O. Ambargis; Thomas McComb; Carol A. Robbins
  16. Export decisions of services firms between agglomeration effects and market-entry costs By Henk Kox
  17. Improving the Multi-Dimensional Comparison of Simulation Results: A Spatial Visualization Approach By Daniel Arribas-Bel; Julia Koschinsky; Pedro Amaral
  18. Estimating the Price of Rents in Regional Price Parties By Troy Martin; Bettina Aten; Eric Figueroa
  19. From SpaceStat to CyberGIS: Twenty Years of Spatial Data Analysis Software By Luc Anselin
  20. Análisis económico de la carretera Pucallpa - Cruzeiro do Sul. By Manuel Glave; Alvaro Hopkins; Alfonso Malky; Leonardo Fleck

  1. By: Schild, Christopher-Johannes
    Abstract: For a cross-section of 123 European regions, a positive causal effect of generalised trust on innovation activity is identified using a set of geographic instrumental variables from climate and soil data. The geographic instrumental variables are defined and discussed. The popular explanation for spatial clustering of innovation by 'interregional knowledge spillovers' is empirically tested. It is found that spatial clustering of innovation activity can be better explained by a positive in uence of trust on innovation combined with the fact that neighboring regions typically show similar levels of trust. --
    Keywords: Social Capital,Trust,Innovation,Regional Economics,Europe
    JEL: O31 R11 R12 Z13
    Date: 2012
  2. By: Luc Anselin (GeoDa Center for Geospatial Analysis and Computation; Arizona State University); Daniel Arribas-Bel
    Abstract: We investigate the common conjecture in applied econometric work that the inclusion of spatial fixed effects in a regression specification re- moves spatial dependence. We demonstrate analytically and by means of a series of simulation experiments how evidence of the removal of spatial autocorrelation by spatial fixed effects may be spurious when the true DGP takes the form of a spatial lag or spatial error dependence. In addition, we also show that only in the special case where the dependence is group-wise, with all observations in the same group as neighbors of each other, do spatial fixed effects correctly remove spatial correlation.
    Keywords: spatial autocorrelation, spatial econometrics, spatial externalities, spatial fixed effects, spatial interaction, spatial weights
    Date: 2011
  3. By: Karlsson, Charlie (Jönköping International Business School); Gråsjö, Urban (University West)
    Abstract: New knowledge generated by an economic agent in a region will tend over time to flow to other economic agents in the same region but also to economic agents in other regions. It is quite common in the literature to use the concept of knowledge spillovers for such knowledge flows, irrespective of whether they are intended or non-intended. The potential for intra-re-gional knowledge spillover effects depends on the volume and character of the generation on new knowledge in each region as well as of the general characteristics of the individual re-gional economic milieu, i.e., those location attributes, which are regionally trapped and which include how well integrated it is with other regions. The larger this potential, the higher the probability that firms dependent upon knowledge spillovers will locate there and the higher probability that entrepreneurs will take advantage of this potential to launch innovations and to create new knowledge-based firms. To the extent that firms and entrepreneurs can enjoy these knowledge spillovers, they represent an externality or more specifically a knowledge externality in the regional economy. Great importance is in the literature attributed to knowledge spillovers and knowledge exter-nalities as drivers of regional economic development. Some authors, for example, claim that regional variations in localised knowledge spillovers are one of the main reasons behind re-gional variations in innovation performance. Against this background, the purpose of this chapter is, based upon a general characterization of knowledge flows, to analyse the character of knowledge externalities and, in particular, their sources, their economic nature, their recipients, their mechanisms and channels, their geographic reach, and their economic conse-quences generally and for regional economic development in particular.
    Keywords: Knowledge flows; Knowledge externalities; Knowledge spillovers; Regional growth
    JEL: O18 R11 R12
    Date: 2012–06–01
  4. By: Sylvie Charlot (GAEL - Economie Appliquée de Grenoble - INRA : UR1215 - Université Pierre Mendès-France - Grenoble II); Sonia Paty (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Virginie Piguet (CESAER - Centre d'Economie et Sociologie Appliquées à l'Agriculture et aux Espaces Ruraux - INRA : UMR1041)
    Abstract: The main purpose of this paper is to assess the effects of fiscal cooperation on local taxation in a decentralized country, using the French experience in urban municipalities. We estimate a model of tax setting for local business tax using spatial and dynamic econometric techniques, for the period 1993-2003 and an unbalanced data set. As predicted by the theory, we find that reducing the number of municipalities is likely to limit tax competition and, as a consequence, increase local business tax rates.
    Keywords: fiscal cooperation; tax competition; vertical externalities; local business tax
    Date: 2012–06–01
  5. By: Helmuth Arias Gómez
    Date: 2011–09–12
  6. By: Juan Carlos Chávez; Felipe J. Fonseca
    Abstract: This paper applies a stochastic frontier approach to analyze the evolution of technical efficiency in manufacturing as a source of regional growth, taking as a unit of analysis the Mexican states in the period 1988-2008. The main findings of our analysis are threefold. First, technical efficiency was increasing over the analyzed period and acted as a mechanism to reduce the labor productivity gap across states. Second, Mexican regions can increase manufacturing production about one third, on average, using the same amount of inputs which implies ample potential for regional growth. Third, there exists a considerable difference in the level of technological development, measured in terms of structural efficiency, of the north and the central regions with respect to the south that partially explains the labor productivity gap among regions.
    Keywords: Manufacturing, mexican regions, stochastic frontier, structural efficiency, technical efficiency.
    JEL: D24 L60 O18
    Date: 2012–05
  7. By: Andrea Vaona (Department of Economics (University of Verona))
    Abstract: The convergence of regional electricity intensities in Italy is studied over the period from 1997 to 2007. We stress the importance of the statistical significance of the results, which point to an impressive sclerosis of the geographic distribution of the variable under scrutiny. A shift-share analysis points to the importance of region specific effects. Policy implications are discussed.
    Keywords: Sigma- and gamma-convergence Shift-share analysis Italian regions
    JEL: Q4 R1
    Date: 2012–05
  8. By: Daniel Arribas-Bel; Charles R. Schmidt (GeoDa Center for Geospatial Analysis and Computation; Arizona State University)
    Abstract: This article considers urban spatial structure in US cities using a multi- dimensional approach. We select six key variables (commuting costs, den- sity, employment dispersion/concentration, land-use mix, polycentricity and size) from the urban literature and define measures to quantify them. We then apply these measures to 359 metropolitan areas from the 2000 US Census. The adopted methodological strategy combines two novel techniques for the social sciences to explore the existence of relevant pat- terns in such multi-dimensional datasets. Geodesic self-organizing maps (SOM) are used to visualize the whole set of information in a meaningful way, while the recently developed clustering algorithm of the max-p is applied to draw boundaries within the SOM and analyze which cities fall into each of them. JEL C45, R0, R12, R14. Keywords Urban spatial structure, self-organizing maps, US metropolitan areas
    Date: 2011
  9. By: Gråsjö, Urban (University West); Karlsson, Charlie (Jönköping International Business School)
    Abstract: Nowadays it is well-established fact that urban regions and large ones in particular are crucial for promoting creativity, innovation and subsequent economic growth in the economy. There-fore, it is important to focus policies in Europe on how to improve the existing conditions of urban regions so they can function as engines of economic growth. The purpose of this paper is to discuss policies needed to meet the current urban challenges and to make urban regions in Europe more competitive. A problem with current spatial policies at the EU-level as well as at the national level in most countries is that the policies mainly ignore functional urban re-gions and instead focus on administrative regions. A reason for this is that there is often no political body with authority over the whole functional urban region. In this paper, we present ideas for a new type of spatial policies in Europe focusing on innovation and growth. For in-stance, there is a need to take measures to increase the density of population and companies in functional urban regions and to improve transport infrastructure to increase the geographical extension of functional regions. There is also a need to develop more urban regions into real innovation nodes by developing more elite universities with a proper R&D funding and a ca-pacity to compete with the best universities in the US. Another focus must be on increased investments in higher education as well as policies aiming at increasing the attractiveness of urban regions in terms of housing infrastructure and supply of amenities.
    Keywords: Urban regions; Urban policy; Growth; Innovation; Europe
    JEL: O18 R11 R58
    Date: 2012–06–01
  10. By: Maurizio Pisati (University of Milano–Bicocca)
    Abstract: In this talk, I will present the basic principles of exploratory spatial data analysis and their application using Stata. After a brief discussion of the specific features of spatial data, I will show some freely-available user-written Stata commands (spmap, spgrid, spkde, spatwmat, spatgsa, spatcorr, spatlsa) that help to carry out some exploratory analyses of real-world spatial data.
    Date: 2012–06–04
  11. By: P. Amaral; L. Anselin
    Abstract: In this paper, we investigate the finite sample properties of Moran’s I test statistic for spatial autocorrelation in limited dependent variable models suggested by Kelejian and Prucha (2001). We analyze the socio- economic determinants of the availability of dialysis equipment in 5,507 Brazilian municipalities in 2009 by means of a probit and tobit specifica- tion. We assess the extent to which evidence of spatial autocorrelation can be remedied by the inclusion of spatial fixed effects. We find spa- tial autocorrelation in both model specifications. For the probit model, a spatial fixed effects approach removes evidence of spatial autocorrelation. However, this is not the case for the tobit specification. We further fill a void in the theoretical literature by investigating the finite sample prop- erties of these test statistics in a series of Monte Carlo simulations, using data sets ranging from 49 to 15,625 observations. We find that the tests are unbiased and have considerable power for even medium-sized sample sizes. Under the null hypothesis of no spatial autocorrelation, their em- pirical distribution cannot be distinguished from the asymptotic normal distribution, empirically confirming the theoretical results of Kelejian and Prucha (2001), although the sample size required to achieve this result is larger in the tobit case than in the probit case.
    Date: 2011
  12. By: Waśniewski, Krzysztof
    Abstract: The paper explores the issue of urban development in the context of fiscal crisis. A model of municipal governance is introduced, explaining how social agents’ individual strategies shape the accumulation of debt by local governments. Empirical investigation, in a sample of big Polish cities, is presented as an illustration of the model. The conclusion is twofold. Firstly, the extent of municipal debt should definitely be considered as an indicator of quality in municipal governance, and, that real accumulation of municipal debt is justifiable only on the short run, and when the given city grows significantly in demographic terms. Secondly, the old institutionalism is a good theoretical framework for studying municipal, fiscal policy, as it emphasises the importance of habits and subjective consistency in individual strategies.
    Keywords: local governments; fiscal policy; urban development
    JEL: H7 H3
    Date: 2012–01–10
  13. By: Kayam, Saime Suna; Ecer, Sencer; Gupta , R
    Abstract: The foreign direct investment (FDI) strategy has imbued India’s once stagnant industrial sector with capital and job opportunity. However, as India’s GDP grows ever larger, there is a concern that the growth within the country is not evenly distributed and may in fact exacerbate current economic disparities. This paper seeks to look at potential avenues poorer states can take to attract FDI if they choose to as a method to stay competitive within the country. Our hypothesis is that measures such as power rating (as a proxy for infrastructure), literacy, and minimum wage would be highly significant related to inward FDI.
    Keywords: foreign direct investment; regional diversification; socioeconomic factors
    JEL: R58 C23 F21
    Date: 2011
  14. By: Stéphane Turolla
    Abstract: This paper challenges the conventional wisdom on the competitive grocery retail sector in France. To that end, I develop a structural model of spatial competition that accounts for (i) market geography on consumers' preferences, and (ii) differences in their shopping list. The demand estimates are used to recover stores' price-cost margin under alternative pricing strategies. I select the best pricing model by applying non-nested tests and show that retailers noticeably distort their offer in highly concentrated markets. Finally, I perform counterfactual experiments to quantify the expected gain of an additional store on consumer welfare and retail prices.
    Keywords: spatial competition, structural model, discrete choice model, differentiated products, supermarket industry
    JEL: C35 L13 L81
    Date: 2012
  15. By: Zoë O. Ambargis; Thomas McComb; Carol A. Robbins (Bureau of Economic Analysis)
    Abstract: Economic impact analyses for universities often produce impacts so large that they are viewed with suspicion. Using data collected from universities on actual expenditures as well as the local share of these expenditures to calibrate and regionalize custom economic impact multipliers will produce better results. We compare these economic impacts to those obtained using an “off-the-shelf” multiplier for universities from BEA’s Regional Input-Output Modeling System (RIMS II). We find that results are sensitive to initial assumptions about the study region and the scope of university economic activity. Finally, we use these results and our knowledge of the model to provide recommendations to improve the usefulness and reliability of multiplier-based estimates of the economic impact of universities.
    Date: 2011–06
  16. By: Henk Kox
    Abstract: <p>The paper tests the role of agglomeration effects on the export decision of services firms. Recent theories on trade with heterogeneous firms predict that export participation goes along with sunk market-entry costs. </p><p>Only the more productive firms will be able to overcome these sunk costs. This leads to a process of - ex ante - self selection. These predictions are tested for the services industry, with due account for the possible role of agglomeration effects in large-city areas.</p><p>Standard empirical tests of the new trade models consistently find productivity-based ex ante self selection by exporters, and this effect is mostly explained by unobserved sunk entry costs that exporters have to absorb in new foreign markets. Recent research by urban economists (e.g. Combes et al., 2012) suggests, however, that operating in large-city areas also goes along with positive productivity sorting. Ignoring this leads to upwardly biased estimates of the effect of foreign market entry costs. A large set of micro data for establishments in Dutch services is used to investigate this hypothesis.</p><p>I find evidence that positive productivity self-selection is based on the combined effects of agglomeration and anticipated market-entry cost for export starters. This effect is strongest in markets with more or less homogeneous products. I also find evidence that the productivity self-selection effect (of exporters compared to non-traders) is stronger in non-urban areas and smaller agglomerations.</p>
    JEL: R12 D4 F12 L8
    Date: 2012–06
  17. By: Daniel Arribas-Bel; Julia Koschinsky (GeoDa Center for Geospatial Analysis and Computation; Arizona State University); Pedro Amaral
    Abstract: Results from simulation experiments are important in applied spatial econometrics to, for instance, assess the performance of spatial estimators and tests for finite samples. However, the traditional tabular and graphi- cal formats for displaying simulation results in the literature have several disadvantages. These include loss of results, lack of intuitive synthesis, and difficulty in comparing results across multiple dimensions. We pro- pose to address these challenges through a spatial visualization approach. This approach visualizes model precision and bias as well as the size and power of tests in map format. The advantage of this spatial approach is that these maps can display all results succinctly, enable an intuitive interpretation, and compare results efficiently across multiple dimensions of a simulation experiment. Due to the respective strengths of tables, graphs and maps, we propose this spatial approach as a supplement to traditional tabular and graphical display formats. To allow readers to generate maps such as the ones presented in this article, a package (written in Python) has been made available by the authors as free/libre software. The package includes an example as well as a short tutorial for researchers without programming experience and can be downloaded at:
    Date: 2011
  18. By: Troy Martin; Bettina Aten; Eric Figueroa (Bureau of Economic Analysis)
    Abstract: In May of 2011, BEA published prototype estimates of 5-year regional price parities for states and metropolitan areas for 16 expenditure classes, including rents, for the 2005-2009 period. In previous research (see: Aten & Reinsdorf [2010], Aten & Heston [2009]), differences in interarea price comparisons were evaluated using various methods of constructing the multilateral indexes. In this paper we explore some of these results with respect to different treatments of shelter costs (rents), using data from both the Consumer Price Index and the American Community Survey.
    Date: 2011–10
  19. By: Luc Anselin (GeoDa Center for Geospatial Analysis and Computation; Arizona State University)
    Abstract: This essay assesses the evolution of the way in which spatial data analytical methods have been incorporated into software tools over the past two decades. It is part retrospective and prospective, going beyond a historical review to outline some ideas about important factors that drove the software development, such as methodological advances, the open source movement and the advent of the internet and cyberinfrastructure. The review highlights activities carried out by the author and his collaborators and uses SpaceStat, GeoDa, PySAL and recent spatial analytical web services developed at the ASU GeoDa Center as illustrative examples. It outlines a vision for a spatial econometrics workbench as an example of the incorporation of spatial analytical functionality in a cyberGIS.
    Date: 2011
  20. By: Manuel Glave (Grupo de Análisis para el Desarrollo (GRADE)); Alvaro Hopkins; Alfonso Malky; Leonardo Fleck
    Abstract: Tres ejes transversales, que buscan conectar al país con el Brasil, cruzan la Amazonía peruana. Estos ejes, que forman parte de la Integración de la Infraestructura Regional Suramericana (IIRSA), se han ido construyendo sin investigaciones previas que informen adecuadamente acerca de su eficiencia económica. Tales han sido los casos de la carretera Tarapoto-Yurimaguas (Interoceánica Norte) y los diferentes tramos en la Interoceánica Sur (IOS). El presente estudio se ocupa del tercer y último eje pendiente de culminación, una interconexión vial entre la ciudad de Pucallpa, capital del departamento de Ucayali, con el Brasil. El análisis se basa en la estimación de tres tipos de tráfico (normal, generado e inducido) y considerados niveles de tráfico desviado, uno nulo y otro equivalente al mínimo necesario para hacer el proyecto viable. Se supone que este tráfico desviado proviene exclusivamente del tramo de la IOS Río Branco-Lima y norte del Perú.
    Keywords: Tráfico por carretera, Análisis económico, Road traffic, Economic analysis, Peru, Brasil
    JEL: R11
    Date: 2012

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