nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒12‒06
eighteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Innovation Drivers, Value Chains and the Geography of Multinational Firms in European Regions By Riccardo Crescenzi; Carlo Pietrobelli; Roberta Rabellotti
  2. Economic growth and environmental efficiency: Evidence from U.S. regions By Halkos, George; Tzeremes, Nickolaos
  3. Regional dimension of small innovation business By Volkova N.N.
  4. What Determines Attitudes to Immigration in European Countries? An Analysis at the Regional Level By Yvonni Markaki; Simonetta Longhi
  5. Skew productivity distributions and agglomeration: Evidence from plant-level data By Toshihiro Okubo; Eiichi Tomiura
  6. Empirical analysis of regional economic performance in Russia: Human capital perspective By Kufenko, Vadim
  7. Digital Urban Network Connectivity: Global and Chinese Internet Patterns By Emmanouil Tranos; Karima Kourtit; Peter Nijkamp
  8. On the Spatial Economic Impact of Global Warming By Desmet, Klaus; Rossi-Hansberg, Esteban
  9. Ethnic Inequality By Alesina, Alberto F; Michalopoulos, Stelios; Papaioannou, Elias
  10. Social Networks and Labor Market Inequality between Ethnicities and Races By Ott Toomet; Marco van der Leij; Meredith Rolfe
  11. Gibrat’s law for cities, growth regressions and sample size By González-Val, Rafael; Lanaspa, Luis; Sanz, Fernando
  12. Private Saving Rates and Macroeconomic Uncertainty: Evidence from Spanish Regional Data By Bande, Roberto; Riveiro, Dolores
  13. Agri-environmental policy and urban sprawl patterns: A general equilibrium analysis By Thomas Coisnon; Walid OUESLATI; Julien Salanié
  14. The Decarbonization of China's Agriculture By Huang, Yongfu; He, Jingjing
  15. The Spatial Diffusion of Technology By Comin, Diego; Dmitriev, Mikhail; Rossi-Hansberg, Esteban
  16. The Consumption-Investment-Unemployment Relationship in Spain: an Analysis with Regional Data By Bande, Roberto; Riveiro, Dolores
  17. El nuevo sistema de financiacion de las Comunidades Autonomas de regimen comun. Un analisis critico y datos homogeneos para 2009 y 2010 By Angel de la Fuente
  18. Ideology and fiscal policy: quasi-experimental evidence from the German States By Thushyanthan Baskaran

  1. By: Riccardo Crescenzi; Carlo Pietrobelli; Roberta Rabellotti
    Abstract: This paper investigates the geography of multinational corporations’ investments in the EU regions. The ‘traditional’ sources of location advantages (i.e. agglomeration economies, market access and labour market conditions) are considered together with innovation and socio-institutional drivers of investments, captured by means of regional “social filter” conditions. The introduction of a wider set of attraction factors makes is possible to empirically assess the different role played by such advantages in the location decision of investments at different stages of the value chain and disentangle the differential role of national vs. local and regional factors. The empirical analysis covers the EU-25 regions and suggests that regional-socio economic conditions are crucially important for an understanding of the location investment decisions in the most sophisticated knowledge-intensive stages of the value chain.
    Keywords: Innovation, Multinationals, Systems of Innovation, Value Chains, Regions, European Union
    JEL: F21 F23 O33 R12 R58
    Date: 2012–10
  2. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper proposes a conditional directional distance function model in order to examine the link between regional environmental efficiency and GDP per capita levels. As an illustrative example we apply our model to USA regional data revealing an inverted ‘U’ shape relationship between regional environmental efficiency and per capita income. The results derived from a non-parametric regression indicate a turning point at 49,000 dollars.
    Keywords: Regional environmental efficiency; Directional distance function; Conditional measures; U.S. regions
    JEL: Q50 C14 Q56 R11
    Date: 2012–11
  3. By: Volkova N.N.
    Date: 2012–11–20
  4. By: Yvonni Markaki (Institute for Social and Economic Research, University of Essex); Simonetta Longhi (Institute for Social and Economic Research, University of Essex)
    Abstract: Different disciplines within the social sciences have produced large theoretical and empirical literatures to explain the determinants of anti-immigration attitudes. We bring together these literatures in a unified framework and identify testable hypothesis on what characteristics of the individual and of the local environment are likely to have an impact on anti-immigration attitudes. While most of the previous literature focuses on the explanation of attitudes at the individual level, we focus on the impact on regional characteristics (the local context). Our aim is to explain why people living in different regions differ in terms of their attitudes towards immigration. We isolate the impact of regions from regressions using individual-level data and explain this residual regional heterogeneity in attitudes with aggregate level indicators of regional characteristics. We find that regions with a higher percentage of immigrants born outside the EU and a higher unemployment rate among the immigrant population show a higher probability that natives express negative attitudes to immigration. Regions with a higher unemployment rate among natives however, show less pronounced anti-immigrant attitudes.
    Keywords: Anti-immigration attitudes; Regional characteristics; Europe
    JEL: F22 J15 J61 R19
    Date: 2012–11
  5. By: Toshihiro Okubo (Faculty of Economics, Keio University); Eiichi Tomiura (Department of Economics, Yokohama National University)
    Abstract: This paper empirically examines how the shapes of plant productivity distributions vary across regions based on Japan's manufacturing census. We focus on the skewness to examine the asymmetry by estimating the gamma distribution at the plant level. By linking the estimated shape parameters with economic geography variables, we find that the productivity distribution tends to be significantly left-skewed, especially in cores, regions with diversified industrial compositions, regions with weak market potential, and in agglomerated industries. These findings suggest that agglomeration economies are likely to accommodate heterogeneous plants with wide ranges of productivities.
    Date: 2012–11
  6. By: Kufenko, Vadim
    Abstract: Having shown the important role of the Russian economy in the ex-USSR region by causality tests, we proceed to empirical analysis of growth and performance of the Russian regions. A dynamic panel data approach enabled us to obtain elasticity coefficients on proxies for convergence, physical capital, labour and innovation. After including human capital in the reformulated model we resolve endogeneity and reverse causality by introducing two instrumental variable approaches. Taking advantage of the Unified State Exam data we managed to successfully endogenize human capital by number (and share) of outperforming students and by the education index. The second approach helped to improve causality between instruments and human capital: the dates of first university foundation and distance to Moscow successfully explains human capital variations due to historical and spatial characteristics of a given region. --
    Keywords: growth regressions,regional analysis,human capital,system GMM,instrumental variables
    JEL: C01 E24 O40 O47
    Date: 2012
  7. By: Emmanouil Tranos (VU University Amsterdam); Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam)
    Abstract: The majority of cities in our world is not only connected through conventional physical infrastructure, but increasingly through modern digital infrastructure. This paper aims to test whether digital connectivity leads to other linkage patterns among world cities than traditional infrastructure. Using a generalized spatial interaction model, this paper shows that geography (and distance) still matters for an extensive set of world cities analysed in the present study. With a view to the rapidly rising urbanization in many regions of our world, the attention is next focused on the emerging large cities in China in order to test the relevance of distance frictions - next to a broad set of other important explanatory variables - for digital connectivity in this country. Various interesting results are found regarding digital connectivity within the Chinese urban system, while also here geography appears to play an important role.
    Keywords: Digital Networks; Internet; Connectivity; World Cities; Death of Distance; Centrality; Smallâ€World Networks; Clustering; Gravity Model
    JEL: O18 H54 P25
    Date: 2012–11–16
  8. By: Desmet, Klaus; Rossi-Hansberg, Esteban
    Abstract: We propose a dynamic spatial theory to analyze the geographic impact of climate change. Agricultural and manufacturing firms locate on a hemisphere. Trade across locations is costly, firms innovate, and technology diffuses over space. Energy used in production leads to emissions that contribute to the global stock of carbon in the atmosphere, which affects temperature. The rise in temperature differs across latitudes and sectors. We calibrate the model to analyze how climate change affects the spatial distribution of economic activity, trade, migration, growth, and welfare. We assess quantitatively the impact of migration and trade restrictions, energy taxes, and innovation subsidies.
    Keywords: carbon; climate change; growth; international and regional trade; migration; mobility frictions; regional economics; space
    Date: 2012–11
  9. By: Alesina, Alberto F; Michalopoulos, Stelios; Papaioannou, Elias
    Abstract: This study explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. We construct measures of ethnic inequality combining ethnolinguistic maps on the spatial distribution of groups with satellite images of light density at night. Ethnic inequality is strongly inversely related to per capita income; this pattern holds when we condition on the overall degree of spatial inequality -that is also associated with underdevelopment. We further show that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeply rooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development. We also show that ethnic inequality goes in tandem with lower levels development within countries. Using micro-level data from the Afrobarometer surveys we show that individuals from the same ethnic group are worse off when they reside in districts with a high degree of ethnic inequality.
    Keywords: development; diversity; ethnicity; geography; inequality
    JEL: O10 O40 O43
    Date: 2012–11
  10. By: Ott Toomet (Tartu University); Marco van der Leij (University of Amsterdam); Meredith Rolfe (London School of Economics)
    Abstract: This paper analyzes the relationship between unexplained racial/ethnic wage differentials on the one hand and social network segregation, as measured by inbreeding homophily, on the other hand. Our analysis is based on both U.S. and Estonian surveys, supplemented with Estonian telephone communication data. In case of Estonia we consider the regional variation in economic performance of the Russian minority, and in the U.S. case we consider the regional variation in black-white differentials. Our analysis finds a strong relationship between the size of the differential and network segregation: regions with more segregated social networks exhibit larger unexplained wage gaps.
    Keywords: social networks; wage differential; homophily; segregation; race; minorities
    JEL: J71 J31 Z13
    Date: 2012–11–13
  11. By: González-Val, Rafael; Lanaspa, Luis; Sanz, Fernando
    Abstract: This paper uses un-truncated city population data from six countries (the United States, Spain, Italy, France, England and Japan) to illustrate how parametric growth regressions can lead to biased results when testing for Gibrat’s law in city size distributions. The OLS results show non-monotonic behaviours depending on the sample size. Moreover, it is possible to find a critical sample size from which we reject Gibrat’s law.
    Keywords: Gibrat’s law; city size distribution; urban growth
    JEL: R00 R12 R11
    Date: 2012–11
  12. By: Bande, Roberto; Riveiro, Dolores
    Abstract: The onset of the Great Recession has been followed by increasing saving rates, which may reflect precautionary behaviour of households. In spite of a broad agreement on the theoretical implications of uncertainty on saving rates, empirical work has not yet reached a consensus on which is the most reliable measure of uncertainty. In this paper we empirically test the precautionary saving theory and explore different measures of macroeconomic uncertainty, using Spanish regional data for the period 1980-2007. Our results suggest that part of the large increase in saving rates that took place in the aftermath of the recession is related to a precautionary motive and that increased uncertainty causes greater savings rates. Moreover, our results also suggest that, in the case of the Spanish economy, the unemployment rate is a relevant variable to measure future income uncertainty.
    Keywords: Precautionary savings; uncertainty; regions; Spain
    JEL: R20 E21
    Date: 2012–09
  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 develops a spatial general equilibrium analysis of an agri-environmental policy in a suburban context. We present a static monocentric model of an open city where agricultural bid-rents and agricultural amenities vary endogenously in space. Amenities are valued by households and are thus a factor of urban decentralisation. This leads us to focus on the spatial effects of agri-environmental policies promoting amenities. The model characterises a suburban mixed land-use area where households and farmers share space. We provide theoretical evidence that agri-environmental policies are not adopted uniformly by farmers and that they impact on several city features. We highlight that the funding of an agri-environmental policy through household income taxation can modify urbanisation patterns. We also discuss its distributional aspects.
    Keywords: agricultural amenities; land development; agri-environmental policy; urban sprawl; leapfrog; monocentric model
    Date: 2012–10–10
  14. By: Huang, Yongfu; He, Jingjing
    Abstract: Agriculture is one of the major greenhouse gas (GHG) emission sources in China. This paper aims to identify the key factors that have led to rising GHG emissions in China.s agricultural sector in recent decades. This research allows for spatial dependence
    Keywords: agriculture; emission reductions; spatial dependence; China
    Date: 2012
  15. By: Comin, Diego; Dmitriev, Mikhail; Rossi-Hansberg, Esteban
    Abstract: We study empirically technology diffusion across countries and over time. We find significant evidence that technology diffuses slower to locations that are farther away from adoption leaders. This effect is stronger across rich countries and also when measuring distance along the south-north dimension. A simple theory of human interactions can account for these empirical findings. The theory suggests that the effect of distance should vanish over time, a hypothesis that we confirm in the data, and that distinguishes technology from other flows like goods or investments. We then structurally estimate the model. The parameter governing the frequency of interactions is larger for newer and network-based technologies and for the median technology the frequency of interactions decays by 73% every 1000 Kms. Overall, we document the significant role that geography plays in determining technology diffusion across countries.
    Keywords: Geography; Human Interactions; Technology Diffusion
    JEL: O3 R0
    Date: 2012–11
  16. By: Bande, Roberto; Riveiro, Dolores
    Abstract: In this paper we analyse the consequences of changes in the consumption patterns on unemployment through an intermediate channel via investment. Specifically, after presenting our theoretical framework, we build a dynamic econometric multiequational model, in which we estimate a consumption function, an investment function and an unemployment rate equation, using a panel of 17 Spanish regions. This model is characterised by its dynamics and the cross equation relationships. After estimating the model, we run a number of dynamic simulations in order to verify our starting hypothesis, namely that temporary and persistent shocks to consumption have long lasting effects on unemployment, both directly and indirectly, through investment. Our results are especially relevant in the current recessive context of the Spanish economy, which is characterised by severe falls in consumption and unprecedented increases in unemployment
    Keywords: Consumption; investment; unemployment; panel data
    JEL: E24 E22 E21
    Date: 2012–10
  17. By: Angel de la Fuente
    Abstract: En el presente trabajo se describe en detalle el funcionamiento del nuevo modelo de financiacion regional aprobado en 2009, se analizan sus propiedades dinamicas y se ofrece una valoracion critica del mismo. Tambien se cuantifican los resultados financieros a competencias homogeneas del nuevo sistema en sus dos primeros anos de aplicacion, 2009 y 2010
    Keywords: financiacion autonomica
    JEL: H71 H77
    Date: 2012–11
  18. By: Thushyanthan Baskaran
    Abstract: Is government ideology important for fiscal policy? I study this question with data from all German States over the period 1975-2005. To identify the effect of ideology, I rely on a fuzzy regression discontinuity design. I find that left-wing state governments spend more than state governments with right-wing and mixed ideology. Deficits of left-wing governments are larger than those of right-wing governments but smaller than those of governments with mixed ideology. These results are robust to sensitivity tests.
    Keywords: Government ideology, Fiscal policy, Fiscal federalism
    JEL: D72 D78 E62 H72
    Date: 2012–10–31

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