nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒11‒17
sixteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Human capital mobility and convergence : a spatial dynamic panel model of the German regions By Kubis, Alexander; Schneider, Lutz
  2. Profiles of local growth and industrial change : facts and an explanation By Dauth, Wolfgang; Südekum, Jens
  3. Coping with Regional Inequality in Sweden: Structural Change, Migrations and Policy, 1860-2000 By Enflo, Kerstin; Rosés, Joan
  4. Cost Competitiveness Comparisons and Convergence in China By Kang, Lili; Peng, Fei
  5. Returns to Regional Migration: Causal Effect or Selection on Wage Growth? By Fabian Kratz; Josef Brüderl
  6. Supernova stars in knowledge-based regions By Kourtit, K.; Nijkamp, P.; Vught, F. van; Vulto, P.
  7. Regional hot spots of exceptional longevity in Germany By Rembrandt D. Scholz; Sebastian Klüsener
  8. Violence and economic development in Colombian cities: a dynamic panel data analysis By Alexander Cotte Poveda
  9. The rise of the East and the Far East : German labor markets and trade integration By Dauth, Wolfgang; Findeisen, Sebastian; Suedekum, Jens
  10. Do reservation wages react to regional unemployment? By Blien, Uwe; Messmann, Susanne; Trappmann, Mark
  11. Redefinition of the Greek electoral districts through the application of a region-building algorithm By Photis, Yorgos N.
  12. How to Tame Two Leviathans? Revisiting the Effect of Direct Democracy on Local Public Expenditure By Sergio Galletta; Mario Jametti
  13. Urban sprawl occurrence under spatially varying agricultural bid-rent and amenities By Thomas Coisnon; Walid OUESLATI; Julien Salanié
  14. Housing markets during the rural-urban transition : evidence from early 20th century Spain By Juan Carmona Pidal; Markus Lampe; Joan R. Rosés
  15. Inequidad regional en Colombia By Darwin Cortés; Juan Fernando Vargas
  16. Exctractive Industries and Local Development in the Peruvian Highlands By Elisa Ticci; Javier Escobal

  1. By: Kubis, Alexander (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Schneider, Lutz
    Abstract: "Since the fall of the iron curtain in 1989, the migration deficit of the Eastern part of Germany has accumulated to 1.8 million people, which is over 10 percent of its initial population. Depending on their human capital endowment, these migrants might either - in the case of low-skilled migration - accelerate or - in high-skilled case - impede convergence. Due to the availability of detailed data on regional human capital, migration and productivity growth, we are able to test how geographic mobility affects convergence via the human capital selectivity of migration. With regard to the endogeneity of the migration flows and human capital, we apply a dynamic panel data model within the framework of ß-convergence and account for spatial dependence. The regressions indicate a positive, robust, but modest effect of a migration surplus on regional productivity growth. After controlling for human capital, the effect of migration decreases; this decrease indicates that skill selectivity is one way that migration impacts growth." (Author's abstract, IAB-Doku) ((en))
    Keywords: Binnenwanderung, Qualifikationsniveau, regionale Disparität, Konvergenz, Zuwanderung, Abwanderung, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland
    JEL: R23 R11 C23
    Date: 2012–09–24
  2. By: Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Südekum, Jens
    Abstract: "In this paper we take a detailed look at the sectoral anatomy of regional growth in German regions over the period 1978-2008. In the aggregate, the German economy is characterized by a secular decline of the manufacturing sector and a rise of the modern service economy. This trend of structural change (Petty's law) by no means occurs uniformly across space, however. Some regions exhibit this trend even at an accelerated pace, while other regions develop their local economic structures against the trend and expand their manufacturing bases. We first develop a novel empirical approach that allows us to categorize all German regions into one out of three groups with 'pro-trend', 'anti-trend' or 'featureless' regional growth. Afterwards we show that the differential exposure to international trade is an important cause of the divergent patterns of local industrial change." (Author's abstract, IAB-Doku) ((en))
    Keywords: Wirtschaftsstrukturwandel, regionale Verteilung, Welthandel, lokale Ökonomie, Beschäftigungsentwicklung, Wirtschaftsentwicklung, Wirtschaftssektoren
    JEL: R11 F16
    Date: 2012–09–17
  3. By: Enflo, Kerstin (Department of Economic History, Lund University); Rosés, Joan (Departamento de Historia Económica e Instituciones and Instituto Figuerola, Universidad Carlos III de Madrid)
    Abstract: In many countries, regional income inequality has followed an inverted U-shaped curve, growing during industrialisation and market integration and declining thereafter. By contrast, Sweden’s regional inequality dropped from 1860 to 1980 and did not show this U-shaped pattern. Accordingly, today’s regional income inequality in Sweden is lower than in other European countries. We note that the prime mover behind the long-run reduction in regional income differentials was structural change, whereas neo-classical and technological forces played a relatively less important role. However, this process of regional income convergence can be divided into two major periods. During the first period (1860-1940), the unrestricted action of market forces, particularly the expansion of markets and high rates of internal and international migrations, led to the compression of regional income differentials. In the subsequent period (1940-2000), the intended intervention of successive governments appears to have also been important for the evolution of regional income inequality. Regional convergence was intense from 1940 to 1980. In this period, governments aided the convergence in productivity among industries and the reallocation of the workforce from the declining to the thriving regions and economic sectors. During the next period (1980-2000), when regional incomes diverged, governments subsidised firms and people in the declining areas.
    Keywords: Convergence; regional policy; neo-classical growth model; labour reallocation
    JEL: N93 N94 R11 R12
    Date: 2012–10–25
  4. By: Kang, Lili; Peng, Fei
    Abstract: This paper examines provincial disparities and convergence of sectors in China from a labour cost perspective. We find that the provinces in the Northeast and Coastal regions have strong advantages in the manufacturing sector, while the Primary sector, Construction and Real estate sectors have better cost competitiveness in the Interior and West regions. The decrease of relative unit labour cost (RULC) is mainly due to the faster growth rates of relative labour productivity (RLP) than the growth rate of relative nominal labour costs (RNLC) in most cases. A decomposition analysis shows that there are much more cost competitiveness gains, as well as relative decrease of nominal labour costs and labour productivity improvement during the period 1978-1995 than the years afterwards. We find the fast convergence of RULC is consistent with the fast converging RLP among provinces with static wages, suggesting the importance of institutional factors such as rigid wage setting in Chinese labour markets.
    Keywords: Unit Labour Cost; Regional Development Planning; China
    JEL: R58 J30
    Date: 2012–11–05
  5. By: Fabian Kratz; Josef Brüderl
    Abstract: Human capital theory predicts pecuniary returns to regional migration, but also positive self-selection of migrants. Therefore, when estimating the causal effect of migration one has to take care of potential self-selection. Several authors recommend using fixed effects models thereby controlling for time constant unobserved heterogeneity. However, if selection operates not only on wage level but also on wage growth conventional fixed effects models are also biased. In this paper we want to investigate, whether migrants are self-selected on wage growth and if this biases conventional fixed effects estimates of the returns to migration. We use data from the SOEP 1984-2010. First we analyze the time pattern of the wage differential between migrants and stayers to see whether they are on different wage trajectories. Second we introduce a fixed effects model with individual slopes to investigate whether conventional results are biased.
    Keywords: regional migration, causal- and selection-effects, selection on wage growth
    JEL: C33 J61 R23
    Date: 2012
  6. By: Kourtit, K.; Nijkamp, P.; Vught, F. van; Vulto, P.
    Date: 2012
  7. By: Rembrandt D. Scholz (Max Planck Institute for Demographic Research, Rostock, Germany); Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: In their contributions to the debate on exceptional longevity, several scholars have noted the existence of spatial hot spots, or areas with a high concentration of individuals who have survived to very high ages (e.g. Sardinia in Italy or Okinawa in Japan). However, most of these studies were based on a small number of cases. This study investigates the spatial pattern of exceptional longevity in Germany by place of birth and place of death. We used a large dataset of exceptional longevity that covered all recorded individuals who reached the age of 105 in Germany in the period 1991 to 2002 (N: 1,339). Our research results show that, even in Germany, with its troubled 20th-century past, most of the semi-supercentenarians reached the age of exceptional longevity in the same region in which they were born. The discovery of this highly localised pattern supports the view that an investigation of regional variation in exceptional longevity can produce meaningful results. In our analysis of spatial variation, we were able to detect hot spots of exceptional longevity in Berlin and in north-western Germany. These findings are remarkable, as life expectancy in Germany is currently characterised by a south-north gradient, with the areas of highest life expectancy at birth being located in the south. The observed pattern of exceptional longevity instead reflects the life expectancy at birth pattern in Germany in the early 20th century and to some degree also the current life expectancy at age 80 pattern. Our findings might be interpreted as support to the argument that early and late life conditions might play an important role in explaining spatial variation of exceptional longevity in Germany.
    Keywords: Germany, longevity, spatial analysis, spatial distance
    JEL: J1 Z0
    Date: 2012–11
  8. By: Alexander Cotte Poveda
    Abstract: This paper studies the socio-economic determinants of violence in the seven most important cities in Colombia. Derived from theories rooted in classic works, including Becker's paradigm, criminal inertia, social disorganisation, urbanism and strain, we formulate several hypotheses on the socio-economic determinants of violence. To test these hypotheses, a dynamic panel data analysis is employed. The analysis shows that cities’ deprivation and high population density are strong predictors of homicide rates. Comparing the results among Colombian cities, we find support indicating that city-level homicide rates are influenced by the city's level of development. Moreover, we find evidence that economic growth, inequality, poverty and human capital influence violence in the cities studied, which could generate negative effects on the economic and social development of Colombia.
    Date: 2012–11–05
  9. By: Dauth, Wolfgang (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Findeisen, Sebastian; Suedekum, Jens
    Abstract: "We analyze the effects of the unprecedented rise in trade between Germany and 'the East' - China and Eastern Europe - in the period 1988-2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and use trade flows of other high-income countries as instruments for regional import and export exposure. We find that the rise of 'the East' in the world economy caused substantial job losses in German regions specialized in import-competing industries, both in manufacturing and beyond. Regions specialized in export-oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 493,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. We also conduct our analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships." (Author's abstract, IAB-Doku) ((en))
    Keywords: Außenhandel, Außenhandelsentwicklung, regionaler Arbeitsmarkt, Außenhandel - Auswirkungen, Beschäftigungseffekte, Industrie, Import, Außenhandelsstruktur, Export, regionale Disparität, produzierendes Gewerbe, Außenhandelsverflechtung, Arbeitsmarktentwicklung, Osteuropa, China, Bundesrepublik Deutschland
    JEL: F16 J31 R11
    Date: 2012–07–09
  10. By: Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Messmann, Susanne; Trappmann, Mark (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Reservation wages indicate the wage threshold for which individual workers are inclined to supply their working capacity. In important theoretical approaches it is assumed that this threshold depends on the unemployment rate. If this is true, the variation of reservation wages might be an important force behind the regional 'wage curve', which has been estimated in many empirical studies. Up to now, the connection of regional unemployment with reservation wages has not been tested, since research possibilities depend on survey data which were not available. With the 'Labour Market and Social Security' study (PASS), a new large panel survey in Germany, information on regional reservation wages is available. The empirical analysis with this data opens up the 'black box' of the wage generation process and delivers insights about its determining factors. The analysis is based on job matching and efficiency wage theory which are used to derive a relationship between unemployment and reservation wages." (Author's abstract, IAB-Doku) ((en))
    Keywords: Einkommenserwartung, Arbeitslosigkeit, regionale Verteilung, IAB-Haushaltspanel, Lohnkurve, Lohnfindung, regionaler Arbeitsmarkt, Effizienzlohntheorie
    JEL: J64 J31 R23
    Date: 2012–09–20
  11. By: Photis, Yorgos N.
    Abstract: The main purpose of this paper is the formulation of a methodological approach for the definition of homogenous spatial clusters, taking into account both geographical and descriptive characteristics. The proposed methodology, is substantiated by SPiRAL (SPatial Integration and Redistricting ALgorithm), a constrained-based spatial clustering algorithm, whose successive steps focus on the analysis of the characteristics of the areas being integrated, the designation of the spatial clusters and the validity of a joining criterion. We applied the methodological approach and used SPiRAL to solve a realistic electoral redistricting problem. Namely, the redefinition of the electoral districts of the Prefecture of Lakonia in Greece. The results demonstrate an improved layout of the study area’s electoral map as far as the problem’s criteria and constraints are concerned (adjacency, population and size), justifying in this respect the perspectives and potential of our approach in the analysis and confrontation of similar problems.
    Keywords: Spatial clustering; GIS; constraint-based algorithm; electoral districts; Greece
    JEL: R53 O2 D72
    Date: 2012–10
  12. By: Sergio Galletta (Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera); Mario Jametti (Istituto di economia politica (IdEP), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera)
    Abstract: We explore how the vertical structure of direct democracy in a federal context affects expenditure decisions of sub-central governments. In so doing we revisit previous research on the effect of direct democratic institution on public policies. Particularly, the effect of upper-level (state) existence of direct democratic control on local expenditure. Empirically we exploit the fact that both states (cantons) and local governments (municipalities) enjoy a high autonomy in setting their degree of direct democracy. This allows us to take into account vertical differences between institutions, i.e. we can distinguish the effect of state direct democracy on local expenditures for municipalities with and without own direct democratic instruments. Considering 119 municipalities belonging to 22 Swiss cantons for the period 1993-2007 we highlight that municipalities without fiscal referenda belonging to cantons with fiscal referenda present higher expenditure, while the effect is much reduced and statistically significantly different for municipalities that also avail of referenda.
    Keywords: Direct Democracy, Local Public Expenditure, Vertical Interaction
    JEL: H72 H77 D72 D78
    Date: 2012
  13. By: Thomas Coisnon (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - INRA : UMR49); Walid OUESLATI (UMR GRANEM - UMR MA 49 – Université d'Angers et Agrocampus Ouest - Université d'Angers); Julien Salanié (Granem - Groupe de Recherche ANgevin en Economie et Management - Agrocampus Ouest - INRA : UMR49)
    Abstract: This paper presents a spatially explicit model to examine the importance of agricultural amenities as a determinant of the urban and suburban spatial structure. By introducing endogenous agricultural amenities into the classical monocentric model, we provide an intuitive explanation of leapfrog development. We show how urban development patterns highly depend on the intensity of surrounding farms and their ability to produce amenities. We also show that, even in absence of a particular landscape feature or any exogenous source of amenities, fragmented urban sprawl is a natural development pattern for a city surrounded by a spatially varying agricultural environment. Finally, we show how land tax policies could curb urban sprawl under certain conditions on households' preferences and farming.
    Keywords: Etalement urbain; rente; agriculture; aménités; modèle monocentrique
    Date: 2012–09–28
  14. By: Juan Carmona Pidal; Markus Lampe; Joan R. Rosés
    Abstract: This paper discusses how Spain’s urban housing markets reacted to the farreaching changes that affected the demand for dwellings during the first phase of the rural-urban transition process. To this end, we construct a new hedonic index of real housing prices and assemble a cross-regional panel dataset of price fundamentals. The results of our econometric analysis suggest that urban housing markets did not face supply constraints and responded swiftly to the growing demand for accommodation. In light of this new evidence, we conclude that housing markets were not a burden for Spanish economic development and that Spain’s urban infrastructure and institutional framework and were suitable for the housing needs at the time
    Keywords: Hedonic prices, Demand and Supply of Housing, Regulation in Housing Markets
    JEL: N93 N94 R30
    Date: 2012–10
  15. By: Darwin Cortés; Juan Fernando Vargas
    Abstract: Resumen: Este documento hace un diagnostico multidimensional de las brechas regionales que existen en Colombia a nivel departamental y de su persistencia en el tiempo. Así mismo se estudian las causas de la inequidad regional. La evidencia presentada sugiere que las diferencias institucionales de largo plazo explican las desigualdades regionales actuales. Para el diagnóstico se utiliza un conjunto amplio de variables socioeconómicas incluyendo variables de ingreso y actividad económica, variables de capital humano, medidas de pobreza y desigualdad, variables de comportamiento político, variables de aislamiento geográfico, y variables de esfuerzo o dependencia fiscal. El documento también revisa algunas experiencias internacionales exitosas en la disminución de brechas regionales y plantea algunas sugerencias de política pública para el caso colombiano.
    Date: 2012–11–05
  16. By: Elisa Ticci (Department of Economic Policy, Finance and Development, University of Siena); Javier Escobal (Grupo de Análisis para el Desarrollo (GRADE), Lima, Peru)
    Abstract: During the last decade, the mining sector in Peru has been experiencing sustained growth. Using Census, administrative, nationally and regionally representative data we compare districts in the Peruvian Highlands with a recent mining history with suitable counterfactuals. We find that the new mining activities attract migration inflows, and have some positive effects over educational indicators. The study also shows that districts which lower level of corporate social expenditure have on average smaller impacts. However, the local potential welfare effect of the mining boom is largely untapped and the role of corporate social responsibility for its full materialization is still limited.
    Keywords: extractive industry, local development, Latin America, Peru, propensity score matching
    JEL: L72 O12 N56 R12
    Date: 2012

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