nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒07‒23
nineteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Delineation of City Regions Based on Commuting Interrelations: The Example of Large Cities in Germany By Albrecht Kauffmann
  2. Detecting Spatial Clustering Using a Firm-Level Cluster Index By Tobias Scholl; Thomas Brenner
  3. The Territorial Dynamics Of Innovation In China And India By Crescenzi, Riccardo; Rodríguez-Pose, Andrés; Storper, Michael
  4. Local taxes in Buenos Aires City: A CGE approach By Chisari, Omar Osvaldo; Mastronardi, Leonardo Javier; Romero, Carlos Adrián
  5. Spatial Knowledge Spillovers in Europe: A Meta-Analysis By Karlsson, Charlie; Warda, Peter; Gråsjö, Urban
  6. Regional economic growth and environmental efficiency in greenhouse emissions: A conditional directional distance function approach By Halkos, George; Tzeremes, Nickolaos
  7. Network effects of public transport infrastructure: evidence on Italian regions By Valter Di Giacinto; Giacinto Micucci; Pasqualino Montanaro
  8. Economic restructuring, crises and the regions: the political economy of regional inequalities in Greece. By [no author]
  10. Agglomeration,Trade and Selection By Ottaviano, Gianmarco
  11. The Role of Infrastructure Capital in China’s Regional Economic Growth By Shi, Yingying
  13. Zoning on the Urban Fringe: Results from a New Approach to Modeling Land and Housing Markets By Magliocca, Nicholas; McConnell, Virginia; Walls, Margaret; Safirova, Elena
  14. Service provision and social cohesion in rural areas: interaction between commuting, mobility and the residential preferences in Latvia By Zobena, Aija; Lace, I.; Benga, Elita
  15. Regionale Verteilung raumwirksamer finanzieller Staatshilfen im Kontext regionalwirtschaftlicher Entwicklung By Plankl, Reiner
  16. Science and technology parks and cooperation for innovation: Empirical evidence from Spain By Vásquez-Urriago, Ángela Rocío; Barge-Gil, Andrés; Modrego, Aurelia
  17. Designing a WebGIS for spatial planning By Crescenzio Gallo; Franco Malatacca
  18. The Long Persistence of Regional Entrepreneurship Culture: Germany 1925–2005 By Michael Fritsch; Michael Wyrwich
  19. Geography and economic growth in Vietnam By Ngo, Thu Hien Laura; Santos, Paulo

  1. By: Albrecht Kauffmann
    Abstract: The comparison of cities with regard to their economic or demographic development may yield misleading results, if solely the cities in their administrative borders are the object of consideration. Frequently, historical borders of cities neither conform to the contemporary settlement structures, nor do they consider the mutual dependencies between cities and parts of their hinterland. Therefore, it is often claimed to use city regions as objects of comparison or for the sake of urban planning. Commonly, the delineation of functional regions is based on commuting flows from the municipalities in the hinterland of the core cities directed to the cores. A municipality is regarded as belonging to a certain city region if the share of out-commuters from this municipality to the respective core in the total mass of those employees who reside in that municipality is the largest one, and if this share exceeds a certain threshold value. However, commuting flows in the opposite direction are not considered. The method presented here delineates city regions on the base of bidirectional commuting flows. Hereby, various modifications regarding the characteristics of the employment base, the possibility of overlaps of regions, the formation of polycentric city regions, and of the minimum threshold value of mutual connectivity are applied to the sample of 81 German cities with more than 100 000 inhabitants. Finally, the effects of different kinds of regionalisation on the coefficients of regional specialisation of these cities and city regions are demonstrated.
    Keywords: city regions, functional urban regions, commuting, regional specialisation
    JEL: R12 R23 R58
    Date: 2012–07
  2. By: Tobias Scholl (Schumpeter Center for Clusters, Entrepreneurship and Innovation, Frankfurt University); Thomas Brenner (Working Group on Economic Geography and Location Research, Philipps University Marburg)
    Abstract: We present a new statistical method that detects industrial clusters at a firm level. The proposed method does not divide space into subunits whereby it is not affected by the Modifiable Areal Unit Problem (MAUP). Our metric differs both in its calculation and interpretation from existing distanceâ€based metrics and shows four central properties that enable its meaningful usage for cluster analysis. The method fulfills all five criteria for a test of localization proposed by Duranton and Overman (2005).
    Keywords: Spatial concentration, localization, clusters, MAUP, distance-based measures
    JEL: C40 C60 R12
    Date: 2012–07
  3. By: Crescenzi, Riccardo; Rodríguez-Pose, Andrés; Storper, Michael
    Abstract: This paper analyses the geography of innovation in China and India. Using a tailor-made panel database for regions in these two countries, we show that both countries exhibit increasingly strong polarisation of innovative capacity in a limited number of urban areas. But the factors behind this polarisation and the strong contrasts in innovative capacity between the provinces and states within both countries are quite different. In China, the concentration of innovation is fundamentally driven by agglomeration forces, linked to population, industrial specialisation and infrastructure endowment. Innovative areas in China, rather than generate knowledge spillovers, seem to produce strong backwash effects. In India, by contrast, innovation is much more dependent on a combination of good local socioeconomic structures and investment in science and technology. Indian innovation hubs also generate positive knowledge spillovers to other regions.
    Keywords: China; Geography; India; Innovation; R&D; Regions; Socioeconomic conditions
    JEL: O32 O33 R11 R12
    Date: 2012–07
  4. By: Chisari, Omar Osvaldo; Mastronardi, Leonardo Javier; Romero, Carlos Adrián
    Abstract: The aim of this paper is to analyze the spillover effects of national and local tax policies using a static bi-regional general equilibrium model for the Buenos Aires City (BAC) and the rest of Argentina. The BAC represents 7% of the population of the country, but 29% of its GDP. We analyze the reciprocal impact of fiscal policies on welfare of private agents and the spillover effects on the performance of the public sector of both regions. As expected, the model shows that national fiscal policies do have relevant effects on the activity level of the city and on the welfare of its inhabitants. However, more unexpectedly, it also shows that fiscal decisions at the level of the city have a significant impact on the rest of the country. The results show that: (i) an increase in BAC local taxes produce a decline in the welfare of households and in the activity levels, in both regions; (ii) an increase in national value added tax decreases the regional GDP in both regions, but in different proportions, and increases the regional unemployment rate. The results differ depending on the type of tax (sales or property). Production elasticities and the rule of indexation of wages are key factors that affect the quantitative and qualitative results.
    Keywords: Fiscal Federalism; Computable general equilibrium; Regional spillover effects
    JEL: H77 C68 D58
    Date: 2012–04–30
  5. By: Karlsson, Charlie (Jönköping International Business School); Warda, Peter (Jönköping International Business School); Gråsjö, Urban (University West)
    Abstract: In this paper we quantitatively review the empirical literature on spatial knowl¬edge spillovers in Europe by means of meta-analysis to determine the extent to which such spillovers have been empirically documented as well as the spatial reach of these spillovers. In addition, we will apply meta-regression analysis to analyze the determinants of observed heterogeneity across and between publications. To our knowledge this is the first study of its kind. Our results show that if total local R&D expenditure in a European region increases by 1%, then the number of patents in that region, on average, increases by about 0.5%. Spatial knowledge spillovers induce a positive effect on local knowledge production, however, this effect proves to be small around 0.07%. Spatial weighting regime seems to matter. If R&D expenditures in other regions are weighted by distance in kilometers or minutes (instead of a binary contiguity matrix) then the spillover effect on average will be larger. Also, public R&D expenditure is found to have a lower impact on local patent production compared to the private R&D expenditure.
    Keywords: Knowledge spillovers; knowledge externalities; meta-analysis; Europe
    JEL: O32 O33 R19
    Date: 2012–07–09
  6. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: By using conditional directional distance functions this paper investigates the effect of regional economic growth on regions’ environmental efficiency in greenhouse gas emissions. A sample of ninety eight regions (NUTS 2 level) from Germany, France and the U.K. has been used and regional environmental inefficiencies have been obtained using both the unconditional and conditional output directional distance functions. The results reveal that German regions have the highest environmental efficiency levels. In addition it appears that the effect of regional economic growth on regions’ environmental efficiency levels varies between regions and countries due to different national administrative arrangements on the implementation of environmental policies.
    Keywords: Regional environmental efficiency; directional distance function; stochastic kernel; nonparametric regression
    JEL: Q50 Q56 R15 R11 C60
    Date: 2012–07–11
  7. By: Valter Di Giacinto (Bank of Italy); Giacinto Micucci (Bank of Italy); Pasqualino Montanaro (Bank of Italy JEL classification: C32, E61, H54, R42, R53)
    Abstract: This paper contributes to the empirical literature on the magnitude of the network effects of public infrastructures, introducing a novel approach. After estimating the dynamics common to time series for the regional public capital stock, coordinated policy shocks are identified within a properly specified structural VEC model. The findings confirm previous evidence that transport infrastructures exert positive macroeconomic effects in the long run. At the same time, it is shown that this effect is attributable mostly to the impact of coordinated public policy shocks, as the literature on network externalities predicts.
    Keywords: public capital, transport infrastructure, public policy coordination, network externalities, VEC model.
    Date: 2012–07
  8. By: [no author]
    Abstract: In the debate concerning a country’s structural weaknesses there is an obvious neglect of space issues, an important component of which is regional imbalances. Yet, the persistence of such imbalances within countries has dictated the continuous investigation of their causes and of the required policy reforms for their reduction. Structural changes, economic integration on a global or regional scale and economic crises have been considered major factors for increasing or decreasing domestic regional concentration and disparities, while economic policy can mitigate (or strengthen) their effect. This paper attempts to examine and critically evaluate the above issues for the case of Greece, where regional inequalities, measured by per capita GDP, have widened over time consolidating the country’s polarized structure and where restrictive macroeconomic measures as well as regional policy implemented through the Community Support Frameworks appear to have been inadequate in most cases or even to have intensified the above picture. A discussion of future prospects under Greece’s current difficult situation is attempted in the conclusions.
    Date: 2012–08
  9. By: Hernandez-Villafuerte, Karla Vanessa
    Keywords: Research Methods/ Statistical Methods,
    Date: 2012
  10. By: Ottaviano, Gianmarco
    Abstract: This paper studies how firm heterogeneity in terms of productivity affects the balance between agglomeration and dispersion forces in the presence of pecuniary externalities through a selection model of monopolistic competition with endogenous markups. It shows that firm heterogeneity matters. However, whether it shifts the balance from agglomeration to dispersion or the other way round depends on its specific features along the two defining dimensions of diversity: `richness' and `evenness'. Accordingly, the role of firm heterogeneity in selection models of agglomeration can not be fully understood without paying due attention to various moments of the underlying firm productivity distribution.
    Keywords: agglomeration; economic geography; heterogeneity; selection; trade
    JEL: F12 R11 R12
    Date: 2012–07
  11. By: Shi, Yingying
    Abstract: This paper investigates the role of infrastructure capital in China’s regional economic development during 1990 to 2009 in a neoclassical economic growth model. Four types of infrastructure capital are discussed; electricity, road, rail, and land-line telephone. The results support a positive role of infrastructure in improving economic wellbeing in China. It shows that infrastructure has contributed to the convergence among China’s provinces. However, declining growth momentum from rapid increase of road infrastructure, in particular for the Western region, suggests that road development in the region has been growing too fast. The results counter the conventional wisdom of “road leads to prosperity” widely accepted among national and local governments in China. Thus, the seemingly productive infrastructure capital, when invested beyond a proper level or speed, will become unproductive. The results resonate with the theoretical literature on the inverse U shaped growth impact of infrastructure capital and the dominant “crowding out” of private capital if there is too much infrastructure. They also address the puzzle in the current literature debates as to the direction and magnitude of the growth impact of infrastructure capital.
    Keywords: infrastructure, economic growth, regional inequality, China, International Development, Production Economics, Public Economics, H54, O18, R11,
    Date: 2012–06–20
  12. By: Mueller, Marc; Ferrari, Emanuele
    Abstract: Agricultural polices in the EU are increasingly targeting not only the agricultural sector but also other economic branches. The indirect effects of these policies, as the rural development ones, might be as important as the direct ones, mainly on factor markets as labour. In addition, in order to better scale the adopted agricultural measures, policy makers are devoting more attention to the regionalized impacts of these policies. For these reasons, a pure partial-equilibrium agricultural model is not enough to account the effects of the EU agricultural policies. The development of regionalized Computable General Equilibrium models and the linkages with already developed regionalized agricultural partial equilibrium models is a fundamental step for agricultural economists. The greatest challenge to build a regional general equilibrium model for all EU27 NUTS2 regions is the database construction. This work show the main steps needed to construct such a database, called IOTNUTS2.
    Keywords: regional input-output tables, non-survey method, location quotient, European Union, Agricultural and Food Policy, D57, R10, O52,
    Date: 2012
  13. By: Magliocca, Nicholas; McConnell, Virginia (Resources for the Future); Walls, Margaret (Resources for the Future); Safirova, Elena
    Abstract: This paper uses an economic agent-based model of land use in a hypothetical urban fringe community to examine the effects of large-lot zoning on land conversion, land prices, and the spatial configuration and density of new development. The model incorporates the actions of heterogeneous housing consumers, developers, and farmer/landowners who make economic decisions in land and housing markets. The model allows for population growth and simulates the evolution of land use patterns and prices over a 20-year time period. Zoning regulations in the form of minimum lot size restrictions imposed in an outlying area are shown to have effects that vary with the stringency of the regulations: 2-acre minimum lot sizes have little effect on the spatial patterns of development, but they do increase land and housing prices and result in higher incomes in the region; 5-acre minimum lot sizes push development toward the city center, leaving agricultural land in the zoned region undeveloped until quite late in the simulation period. While house prices are higher with 5-acre zoning, land prices in the zoned region fall, highlighting the countervailing influences of lot size restrictions on land prices. The new modeling approach allows for the tracking of the transitional dynamics of development, both over space and time as the urban area grows.
    Keywords: land use, agent-based model, zoning, urban sprawl
    JEL: R11 R12 R14 R38
    Date: 2012–05–25
  14. By: Zobena, Aija; Lace, I.; Benga, Elita
    Abstract: The main issue addressed in this study is interaction of development policy of agricultural and rural areas with the regional and cohesion policies. This paper is based on an empirical study of everyday commuting models and spatial practices of different social groups of rural people in Latvia. This article analyzes data from a survey “Place, capabilities, migration” conducted in 2011 with a total of 1009 respondents in Latvia. The theoretical basis of research is rooted in the mobility studies and sociological and geographical conceptualization of space and place. The main focus is on analysis of relationship between commuting, mobility and the placeattachment. What are the main reasons of rural population mobility and everyday commuting? What services and where rural people use? What should be done to make rural places more attractive for people as places of work and residence?
    Keywords: rural and local development, social cohesion, commuting, mobility, Agricultural and Food Policy, Community/Rural/Urban Development, R58,
    Date: 2012–06
  15. By: Plankl, Reiner
    Abstract: Zusammenfassung: Der Arbeitsbericht beschreibt unter Bezug auf die wirtschaftliche Entwicklung die regionale Verteilung regionalwirtschaftlich relevanter raumwirksamer finanzieller Staatshilfen in der Förderperiode 1995 bis 2008. Betrachtungseinheiten sind die Bundesländer sowie die ländlichen und nicht ländlichen siedlungsstrukturellen Kreistypen in den alten und neuen Bundesländern. Es werden zehn Förderbereiche beschrieben, dabei wird auf die Maßnahmen zur Entwicklung ländlicher Räume besonders eingegangen. Neben der Beschreibung regionaler Unterschiede im Fördermitteleinsatz werden regionale Unterschiede weiterer potenzieller Erklärungsgrößen für ein regionalwirtschaftliches Wachstum beschrieben. Es zeigen sich auf allen Untersuchungsebenen ausgeprägte regionale Unterschiede in der Förderintensität und der relativen Bedeutung der einzelnen Förderbereiche sowie bei weiteren harten und weichen Standortfaktoren. -------------------------------------------------------------------------- ------------------------------------------------------------- Summary: With particular regard to economic development, the working paper describes the regional distribution of economically-relevant, spatially-effective government financial support in the promotional period 1995 to 2008. The units of consideration are the federal states, rural and non rural settlement structural types of counties in the former and new federal states. Ten promotional areas are described and measures on rural development are considered in particular detail. In addition to the description of regional differences in subsidy use, regional differences in further potential indicators for regional economic growth are described. On all study levels clear regional differences in the intensity of support and the relative significance of the individual support areas as well as with further hard and soft site factors.
    Keywords: finanzielle Staatshilfen, Förderintensität, regionale Verteilungsunterschiede, regionalwirtschaftliches Wachstum, Erklärungsgrößen, Deutschland, financial assistance, intensity of support, financial allocation, regional economic growth, indicators, Germany, Agricultural Finance, Community/Rural/Urban Development, Financial Economics, H22, O11, O18, Q14, R11, R51,
    Date: 2012–05
  16. By: Vásquez-Urriago, Ángela Rocío; Barge-Gil, Andrés; Modrego, Aurelia
    Abstract: Science and Technology Parks (STPs) are one of the most important regional innovation policy initiatives. Previous studies show that location in a Park promotes cooperation for innovation but have not investigated if they help to achieve better results from cooperation. We extend previous literature by analyzing how STPs influence the results of cooperation of Park firms and how this influence is channelled. We rely on a much larger sample of firms and STPs than previous studies and account for selection bias and endogeneity when these problems arise. Results show that location in a STP increases the likelihood of cooperation for innovation and the intangible results from cooperation with the main innovation partner, mainly due to the higher diversity of the relationship.
    Keywords: Science and technology parks; cooperation; innovation; effect; agglomerations
    JEL: R10 O30 L50
    Date: 2012–07–09
  17. By: Crescenzio Gallo; Franco Malatacca
    Abstract: The best tools to manage the exchange of information and services between heterogeneous subjects through new technological tools with particular reference to information systems are certainly the Web-based information systems. Leveraging the infrastructure of the Web, these systems may be able to handle multimedia data, to perform distributed and cooperative applications based on service, in addition to customizing applications and related data. This paper provides an overview on Web Information Systems with particular reference to GIS, presenting a description of the usage scenarios and a comparison between two significant platform for publishing spatial data.
    Keywords: information systems, GIS, web, spatial data.
    Date: 2012–05
  18. By: Michael Fritsch; Michael Wyrwich
    Abstract: We investigate the persistence of levels of self-employment and new business formation in different time periods and under different framework conditions. The analysis shows that high levels of regional self-employment and new business formation tend to be persistent for periods as long as 80 years and that such an entrepreneurial culture can even survive abrupt and drastic changes in the politic-economic environment. We thus conclude that regional entrepreneurship cultures do exist and that they have long-lasting effects.
    Keywords: entrepreneurship, self-employment, new business formation, persistence, culture
    JEL: L26 R11 O11
    Date: 2012–07
  19. By: Ngo, Thu Hien Laura; Santos, Paulo
    Abstract: Using panel data from Vietnam, this paper estimates the determinants of consumption growth for the period 2002-04, using a microgrowth model. While controlling for individual heterogeneity, particular attention is devoted to the question of whether geography, broadly defined to include natural and man-made characteristics at the level of the commune, can be responsible for lower growth rates and, consequently, poverty persistence. We find very limited support for this hypothesis. Neither public nor private investment at commune levels seem to have, per se, a signicant effect on growth. However, local poverty rate does have an important, nonlinear, relation with growth rate of consumption at individual level, suggesting the importance of local externalities in this process. The policy implications of this finding are discussed.
    Keywords: International Development,
    Date: 2012

This nep-geo issue is ©2012 by Vassilis Monastiriotis. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.