nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒11‒03
twelve papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Does New Economic Geography Faithfully Describe Reality? By TABUCHI Takatoshi
  2. Deep determinants or interactions: explaining spatial patterns in human rights By Gerrit Faber; Michiel Gerritse
  3. Optimal Agglomerations in Dynamic Economics By William A. Brock; Anastasios Xepapadeas; Athanasios N. Yannacopoulos
  4. Foreign Trade and FDI in the Austrian Regions – A new methodology to estimate regional trade and an analysis of the crisis effects By Roman Römisch
  5. Foreign Trade in the Austrian Regions By Roman Römisch
  6. Региональные институты модернизации (Regional'nye instituty modernizatsii) By Polterovich, Victor
  7. Driving Up Wages: The Effects of Road Construction in Great Britain By Rosa Sanchis-Guarner
  8. SPATIAL RETAIL PRICING STRATEGIES FOR BEER IN GERMANY By Empen, Janine; Glauben, Thomas; Loy, Jens-Peter
  9. Performance Evaluation of Urban Local Governments: A Case for Indian Cities By Simanti Bandyopadhyay
  10. Migration, Cultural Diversity and Innovation: A European Perspective By Cristina Cattaneo
  11. Una classifica robusta della sostenibilità delle regioni italiane By Tommaso Luzzati; Gianluca Gucciardi

  1. By: TABUCHI Takatoshi
    Abstract: This paper shows that new economic geography models are capable of simulating the real-world tendency for urban agglomeration to the primate city. It is often observed that while regional populations were dispersed in early times, they have been increasingly concentrated into one capital region over recent years. The present paper thus demonstrates that multi-region, new economic geography models are able to simulate the real-world population distribution trends witnessed over the past few centuries.
    Date: 2012–10
  2. By: Gerrit Faber; Michiel Gerritse
    Abstract: The respect for human rights follows strong spatial patterns among countries. However, to understand and predict the spatial effects of policies and interventions, it is imperative to know whether these spatial patterns stem from countries' interactions and spillovers, or from common deep determinants, such as history and physical geography. This paper makes an effort to disentangle the two. The lion's share of spatial patterns is accounted for by time-invariant factors, while the evidence of contemporaneous spillovers is very marginal. This limits the scope of regional effects when individual countries change their human rights situations.
    Keywords: interaction and spillovers, human rights, spatial econometrics, institutions
    JEL: C23 F53 K33 O19
    Date: 2012–10
  3. By: William A. Brock (Department of Economics, University of Wisconsin, USA); Anastasios Xepapadeas (Department of International and European Economic Studies, Greece); Athanasios N. Yannacopoulos (Department of Statistics Athens University of Economics and Business, Greece)
    Abstract: We study rational expectations equilibrium problems and social optimum problems in infinite horizon spatial economies in the con- text of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in infinite dimensional Hilbert spaces. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics.
    Keywords: Agglomeration, Spatial Spillovers, Spillover Induced Instability, Rational Expectations Equilibrium, Social Optimum, Monotone Operators
    JEL: C61 R11
    Date: 2012–09
  4. By: Roman Römisch
    Abstract: Foreign trade and foreign direct investments (FDI) are key elements for economic development and growth of both a country and its regions. This paper focuses on foreign trade and FDI in Austrian regions (Bundesländer). Unfortunately, data on regional trade in Austria is only available on a very limited basis. The aim of this study is to develop new methodologies for the estimation of exports and imports of Austrian regions and analyse the data generated by this methodology. The basic idea is to disaggregate national foreign trade data to the regional level by using national input-output, regional employment and other supplemental data. This allows estimating Austrian regional foreign trade for the years 1999 to 2009. The study shows a large variation in trade among regions. Lower Austria, Upper Austria, Styria and Vorarlberg are the regions with the highest export share. The importance of regional trade increases between 1999 and 2008; the crisis in 2009 had a strong negative impact. Furthermore, the competitiveness of regions differs considerably. Only three regions, Upper Austria, Styria and Vorarlberg, show trade surplus.
    Keywords: Austria, regions, Bundesländer, foreign trade, economic crisis
    JEL: C82 F10 F14 F16 R1 R12 R15
    Date: 2012–10
  5. By: Roman Römisch
    Abstract: This policy brief introduces a method to estimate foreign trade of the nine Austrian NUTS-2 regions. The basic idea of the method is to disaggregate national foreign trade data to the regional level using national input-output, regional employment and other supplemental data. This allows for the estimation of foreign trade of the Austrian regions for the years 1999 to 2009. The results indicate highly differentiated patterns of trade competitiveness across the Austrian regions. While Upper Austria and Vorarlberg perform well on European and global markets, other regions, foremost Burgenland, are in a much more difficult position. The regions’ reactions to the 2009 economic crisis were equally differentiated. Although the decline of foreign trade led to an employment loss in all Austrian regions, Vorarlberg and Tyrol proved to be much more resilient than others.
    Keywords: Austria, regions, Bundesländer, foreign trade, economic crisis
    JEL: C82 F10 F14 F16 R1 R12 R15
    Date: 2012–10
  6. By: Polterovich, Victor
    Abstract: It is shown that, at the stage of catching-up development, regional economic development agencies (REDA) might become the most important elements of the growth control system. Basic tasks of REDA are considered including their role as 1) organizers of interaction among government, business associations and the society; 2) centers of institutional experimentation; 3) information and consulting centers; 4) centers of regional forecasting and planning; 5) coordinators of development institutions in a region. Problems of the choice of rational structures of REDA’s governing and financing are discussed.
    Keywords: development agency; indicative planning; business association
    JEL: R58 O18 O38
    Date: 2011
  7. By: Rosa Sanchis-Guarner
    Abstract: This paper estimates the effects of road construction on individual labour market outcomes using micro-data from Great Britain between 2002 and 2008. To capture these effects, I use a measure of accessibility to employment through the road network at a very detailed geographical level. I test the effect of accessibility changes on weekly wages and hours worked. In order to tackle potential sources of bias, I use an instrumental variable which exploits the variation in employment accessibility stemming only from changes in minimum travel times between locations. I argue that, conditional on controls, small scale spatial variation in the accessibility impact of road construction can be considered to be exogenous because road schemes are aimed to improve connectivity and reduce congestion for wider and more distant areas. I further use home and work location specific individual fixed-effects to control for endogenous sorting of workers and I also restrict the sample to workers who are located very close to the projects. I find a positive impact of accessibility from work location on weekly wages and total hours worked but no effect of accessibility from home neither on wages nor hours, conditional on commuting time. These effects are not due to selection into employment as a result of road construction. I also find evidence of accessibility from home reducing commuting travel time. Increased spatial competition or agglomeration externalities are potential explanations for the findings.
    Keywords: Job accessibility, labour markets, roads, spatial sorting
    JEL: J31 R12
    Date: 2012–10
  8. By: Empen, Janine; Glauben, Thomas; Loy, Jens-Peter
    Abstract: The market for beer in Germany is special for many reasons, e.g. the purity law, the large number of breweries, or consumers who are highly loyal to local brands. To what extent brand loyalty affects spatial pricing strategies, is the main question of this article. We employ weekly retail scanner data for Germany from 2000 to 2001. We find that discounts are higher and offered more often the closer the brands are sold to the brewery they originate from. In addition, average prices are also lower on home markets. According to Anderson and Kumar (2007) this strategy is chosen because promotions generate new loyal customers who repay in periods of regular prices. Thus, loyalty of consumers may be endogenous. Alternatively, retailers use local beer brands as loss leaders, which can also explain the observed regional pricing strategies.
    Keywords: Spatial Pricing, Regional Brands, Brand Loyalty, Beer, Germany, Räumliche Preissetzung, Regionale Marken, Markentreue, Bier, Deutschland, Agricultural Finance, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Marketing,
    Date: 2012
  9. By: Simanti Bandyopadhyay (Indian Council For Research On International Economic Relations)
    Abstract: The paper assesses the performances of the urban local bodies in the state of Karnataka in India.We use non parametric Data Envelopment Analysis as a tool to measure technical efficiencies of the ULBs. If we compare the services in a particular size class of city with the norms we find that in the smallest size class it is water supply which has the minimum shortfall from norms, in the medium size cities it is road density which is closest to the norms and in the largest city size class it is the solid waste management which performs the best with zero shortfall from norms. On an average for all the services there is a shortage of 57 per cent of the ONM expenditure norms, the shortage being the highest (64 per cent) in the biggest size class of cities. If we compare across size classes we find that bigger cities have on an average higher proportions of ONM expenditures while both salary and establishment components show higher proportions in smaller cities. This is indicative to the fact that bigger cities are incurring more productive expenses than the smaller ones. We find that the overall average collection efficiency of property taxes is only 62 per cent which is the lowest in the smallest size class and the highest in the medium size class with little variation across cities. We find that only 27.5 per cent of the ONM expenditure requirements can be fulfilled by the own revenues once the potential for the latter is fully realised. This proportion is higher in bigger cities with moderately high variation across cities. As far as the ONM cost coverage is concerned we find that on an average the ULBs in Karnataka can finance 50 per cent of the ONM costs on basic services through their own revenues with a very high variation in the proportions across cites. We find that the ULBs on an average can reduce 27 per cent of their expenditures on ONM, labor and establishment to provide the same levels of services provided currently by them. We also find that there can be additional savings particularly on establishment and labor expenditures to operate at the maximum efficiency levels. We find that the extent of problem of unproductive spending and under-provision of services is more pronounced in smaller cities.
    Date: 2012–10–20
  10. By: Cristina Cattaneo (Fondazione Eni Enrico Mattei (FEEM))
    Abstract: The paper investigates the determinants of cosmopolitan cities. The hypothesis tested empirically is whether gradual improvements in distant communication boost the generation of ethnically heterogeneous cities. Consequently to easier communication, movers increasingly rely on an enlarged community for identity transmission, rather than on localized peer effects of segregated environment. The empirical estimation provides support to the prediction of the model. A better access to the airports as well as improvements in internet communications are found to increase city ethnic diversity.
    Keywords: Multicutural Cities, Ethnic Diversity, Productivity
    JEL: R11 F22
    Date: 2012–09
  11. By: Tommaso Luzzati; Gianluca Gucciardi
    Abstract: The current economic crisis can be seen as arising from a failure to address sustainability, which is not only about Naturre, but also about the society and the economy. This paper updates and further develops a previous piece of research (Floridi et al. 2011) aimed at evaluating the relative sustainability of the Italian Regions. Given a core set of indicators, selected by referring to the EU Sustainable Development Strategy, we built many composite indexes involving several rankings which allowed us to draw up a meta-ranking, that is a range of possible ranks for Italian Regions.
    Keywords: Composite indicators, rankings, sustainability measures, robustness.
    JEL: Q01 Q56
    Date: 2012–09–01
  12. By: Weber, Anja Michaela
    Keywords: Agri-Environmental Schemes, Transaction Costs, CAP, Hesse, Agricultural and Food Policy, Environmental Economics and Policy,
    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.