nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒12‒15
fifteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Specialization and Regional Economic Development By Thomas Kemeny; Michael Storper
  2. Co-agglomeration of Knowledge-Intensive Business Services and Multinational Enterprises By Wouter Jacobs; Hans R.A. Koster; Frank van Oort
  3. Developing and implementing a smart specialisation strategy at regional level: some open questions By Donato Iacobucci
  4. Descripción y análisis de la huella urbanística del boom inmobiliario en Asturias mediante sistemas de información geográfica, 1996-2006 By Víctor González Marroquín; Fernando Rubiera Morollón
  5. Agglomeration vs. Organizational Reproduction: The Molds Cluster in Portugal By Carla Costa; Rui Baptista
  6. Local politics and economic geography By Berliant, Marcus; Tabuchi, Takatoshi
  7. PRECIO DEL SUELO Y REGALÍAS EN COLOMBIA: Un análisis espacial para los municipios productores de petróleo By Hernán Enríquez Sierra; Carlos Barreto Nieto; Carolina Correa Caro; Jacobo Campo Robledo
  8. Original innovation, learnt innovation and cities: Evidence from UK SMEs By Neil Lee; Andrés Rodríguez-Pose
  9. Policy options for the development of peripheral regions and countries of Europe By Karl Aiginger; Matthias Firgo; Peter Huber
  10. I distretti produttivi in Sicilia: l’esperienza degli anni 2007-2010 By Schilirò, Daniele; Timpanaro, Giuseppe
  11. Diferencias entre paro registrado y paro EPA en España: Una evaluación a partir de microdatos de Galicia By Melchor Fernández Fernández; Manuel Flores Mallo
  12. Does local economic development really work? Assessing LED across Mexican municipalities By Andrés Rodríguez-Pose; Eduardo I. Palavicini-Corona
  13. Argentina’s Economic and Financial Map: A Geo-referenced System of Financial Services Market, Demand and Supply Indicators at the Local Level. By Emilio Blanco; Andrés Denes; Gastón Repetto
  14. The role of direct taxes in fiscal decentralization By Luca Gandullia
  15. Neighborhood Quality and Labor Market Outcomes: Evidence from Quasi-Random Neighborhood Assignment of Immigrants By Anna Piil Damm

  1. By: Thomas Kemeny; Michael Storper
    Abstract: Debates about urban growth and change often center on specialization.However, arguments linking specialization to metropolitan economic development contain diverse, and sometimes conflicting, claims. Is it better to be highly specialized or diversified? Does specialization refer to the absolute scale of an activity in a region, its share within the regional economy, or its share in the nation's economy? Does specialization have static effects, or is its impact chiefly evolutionary? This paper starts by investigating these different theoretical claims. We then turn to an empirical inquiry into the roles of relative and absolute specialization. By analyzing local agglomerations over time, we find that growing absolute specialization is positively linked to wages, while changes in relative concentration are not significantly associated with wage dynamics. This supports notions of specialization based on the absolute size of an agglomeration, and casts doubt on notions of specialization based on shares of an activity in the regional economy.
    Keywords: Specialization, diversification, agglomeration economies, urban wages
    JEL: R11 R12 O21
    Date: 2012–12
  2. By: Wouter Jacobs; Hans R.A. Koster; Frank van Oort
    Abstract: It has been argued that the relationship between knowledge intensive business services (KIBS) and multi-national enterprises (MNEs) within the regional economy is advantageous for urban and regional dynamics. It is likely that KIBS aim to locate proximate to (internationally operating) MNEs because of agglomeration externalities. The impact of MNEs on the birth of KIBS has rarely been examined, and the research on the new formation of KIBS has mainly adopted a case study approach, thus limiting the opportunity for generalisation. We have taken a more quantitative approach using a continuous space framework to test whether proximity is important for the co-location of KIBS and MNEs in the metropolitan area of Amsterdam in the Netherlands. Our results, controlled for other location factors, indicate that KIBS are co-agglomerated with MNEs and that the presence of a MNE significantly influences the birth of KIBS nearby, but the effect on such start-ups is considerably smaller than the positive effect of the presence of already established KIBS. We discuss the implications for urban and regional development strategies and policy initiatives.
    Keywords: knowledge intensive business services, multi-national enterprises, start-ups, point pattern methodology, Amsterdam.
    JEL: F23 L84 L25 R12
    Date: 2012–12
  3. By: Donato Iacobucci (Dept. of Information Engineering Università Politecnica delle Marche, Italy)
    Abstract: The smart specialisation strategy (S3) requires the identification in each region of one or more thematic areas where R&D and innovation policy should be focused on to create and sustain a competitive advantage. Not necessarily the chosen areas will belong to the core, general purpose technology that are generally identified as high-tech sectors (ICT, biotech, etc.). For most of the (peripheral) regions the application of the S3 will involve the identification of production domains in which general purpose technology can be applied and adapted. The aim of this paper is to discuss the theoretical underpinning of the S3, focusing the analysis on three concepts: embeddedness, relatedness and connectivity. The analysis is carried out by reviewing the available documents about the definition and implementation of the smart specialisation strategy and the early proposals developed by some European regions. S3 is an important advancement in the design of regional innovation policy. A better clarification of its theoretical basis and implementation problems can improve its effectiveness.
    Keywords: smart specialisation; regional innovation policy; low and medium tech-industries
    JEL: L52 O25 R11
    Date: 2012–12
  4. By: Víctor González Marroquín; Fernando Rubiera Morollón (Universidad de Oviedo, REGIOlab)
    Abstract: From 2000 to 2007 were years in which Spain is growing in a bubble around the construction sector driven by the "boom" in real estate and high growth rate of public infrastructures. The macroeconomic consequences of this unbalanced growth of the construction are well known but the consequences for urban planning have been less studied. Although Asturias is one of the Spanish regions with the lower real estate bubble is clear that this region has participated with the national trend. The characteristics of this region make it particularly interesting for analysis due to the development of a polycentric conurbation in central area and coexistence of different types of urban development in a small space. This paper proposes a methodology based on the description and analysis of information contained in the referenced digital cartography. Through the classification and interpretation of the pixels of the ortho- photos for Asturias we can identify how is the urban expansion distinguishing between industrial and urban uses of the new urban land. Applying statistical analysis with models that include spatial dependence of the information we can identify the causes of urban growth and describe the different patterns that were followed. We identify the sources affected by processes of real estate bubble and the urban morphology that is consolidated as a result, among other things, of an reduce coordination between the municipalities of the asturian central area.
    Keywords: urbanization,polycentric metropolitan areas,urban economics,Asturias
    JEL: R11 R14 R50 R52
    Date: 2012–10
  5. By: Carla Costa; Rui Baptista
    Abstract: The mechanisms driving regional clustering are examined by exploring two theories: agglomeration economies and organizational reproduction. While organizational reproduction through spinoffs dominates clusters' early stages of growth, in clusters populated by small, vertically disintegrated firms accessing networks of external capabilities, agglomeration economies should emerge as a positive force. We examine just such a cluster: the molds industry in Portugal. Our empirical approach is twofold: first, we examine the early evolution (1946–1986) of the industry; second, we use detailed data on firms and founders for the period 1987–2009 to test the predictions of the two theories. We find that while organizational reproduction has played a major role in clustering, agglomeration economies recently have gained influence.
    Keywords: Clusters, Spinoffs, Agglomeration Economies, Networks, External Capabilities
    Date: 2012–11
  6. By: Berliant, Marcus; Tabuchi, Takatoshi
    Abstract: We consider information aggregation in national and local elections when voters are mobile and might sort themselves into local districts. Using a standard model of private information for voters in elections in combination with a New Economic Geography model, agglomeration occurs for economic reasons whereas voter stratification occurs due to political preferences. We compare a national election, where full information equivalence is attained, with local elections in a three-district model. We show that full information equivalence holds at a stable equilibrium in only one of the three districts when transportation cost is low. The important comparative static is that full information equivalence is a casualty of free trade. When trade is more costly, people tend to agglomerate for economic reasons, resulting in full information equivalence in the political sector. Under free trade, people sort themselves into districts, most of which are polarized, resulting in no full information equivalence in these districts. We examine the implications of the model using data on corruption in the legislature of the state of Alabama and in the Japanese Diet.
    Keywords: information aggregation in elections; informative voting; new economic geography; local politics
    JEL: D82 D72 R12
    Date: 2012–12–04
  7. By: Hernán Enríquez Sierra; Carlos Barreto Nieto; Carolina Correa Caro; Jacobo Campo Robledo
    Abstract: Resumen Las regiones que basan su actividad económica en la extracción de recursos mineros se caracterizan por la generación de rentas excedentes que generan efectos físicos e institucionales sobre el territorio. En este documento se analiza cómo las rentas relacionadas con los recursos de regalías tienen una incidencia sobre el valor del suelo de los municipios petroleros. Por medio de una aproximación hedónica se estiman los valores del suelo utilizando una especificación econométrica con errores correlacionados espacialmente. Se encuentra evidencia que sostiene que luego de controlar por variables de localización, ingresos y atributos locales, en aquellos municipios donde se reciben regalías, el precio del suelo es significativamente más alto. Se puede concluir siguiendo Roback (1982) que el efecto de las regalías que no se refleja en las condiciones de productividad local pero afecta el equilibrio espacial debido a un posible mayor consumo de amenidades. ________ Abstract Regions that base their economic activity on the extraction of mineral resources are characterized by generate over rents that have physical and institutional effects on the territory. This paper analyses how rents related with royalties have an impact on land values of petroleum producer municipalities. Through a hedonic approach land values are estimated using an econometric specification with spatial correlated errors. It is argued that after controlling by location, income and amenities variables, in those municipalities where royalties are perceived, land values are significantly higher. It can be concluded following Roback (1982) that the effect of royalties that is not reflected on local productivity conditions affects the spatial equilibrium due to a higher consumption of amenities.
    Date: 2012–11–11
  8. By: Neil Lee; Andrés Rodríguez-Pose
    Abstract: One of the key benefits of cities is that they allow the exchange of knowledge and information between economic actors. This may have two effects: it may create the conditions for entirely new innovations to emerge, and it may allow firms to learn innovations from those nearby. Yet few studies have considered the impact of an urban location on whether innovations are original or learnt. This paper tests these hypotheses using large-scale survey evidence for over 1,600 UK SMEs. We show that while urban firms tend to be both product and process innovators, urban firms are disproportionately likely to introduce process innovations which are only new to the firm, rather than entirely original. Instead, the urban advantage in product innovation appears to come from a combination of the effects. The results highlight a need for a nuanced view of the link between cities and innovation.
    Keywords: Innovation, Cities, SMEs, Learning, United Kingdom
    JEL: O31 O33 O38
    Date: 2012–11
  9. By: Karl Aiginger; Matthias Firgo; Peter Huber
    Abstract: Given the recent economic problems of southern EU countries that are rooted in lacking competitiveness, this task will summarise existing knowledge on the factors impeding on or facilitating the economic development of peripheral/low income regions in the EU, and discuss policy options to improve economic performance of Southern european countries while at the same time maintaining (or improving) sustainability. In the light of recent developments a central focus will be put on Greece, Italy, Portugal and Spain, and on the question of how national, community wide policies and spillovers from the centre can contribute to the double objective of improving competitiveness and sustainability in these countries. A substantial part of the empirical evidence for the policy conclusion comes from anylyzing the catching up experience of regions within countries, since this situation resembles the chances and problems of countires catching up within a Monetary Union (without the possibility to improve competitiveness and correct policy failures by devaluations). The results of this task will be reported in a separate deliverable (in the form of a policy brief) and will serve the researchers involved in all tasks of this work package as a starting point for further analysis.
    Keywords: Competitiveness; economic growth path; European economic policy; labour markets; peripheral areas; rural areas
    JEL: R11 E60
    Date: 2012–12
  10. By: Schilirò, Daniele; Timpanaro, Giuseppe
    Abstract: Sicily is a region which shows a large gap in terms of income per capita with the Centre-North and with the average income per capita of the European Union. The island, however, have an entrepreneurial tradition that has been consolidated in agriculture and craft activities and that has paid off even in the limited manufacturing activity. The Sicilian economy has seen the emergence in recent years of several innovative companies who can be leaders in the markets, although there are many unsolved problems that constrain the economy and its development. This paper aims to examine and evaluate the experience of the 23 productive districts recognized by the Sicilian Region in 2007, distinguishing them in two broad sectors: industry-handicraft and agro-food. The evaluation is carried out at the conclusion of the “Development Agreements” of the districts over the period 2007-2010. An assessment that may be of interest just when the Region is preparing to approve the new “Development Agreements” for next three years.
    Keywords: Productive districts; regional development; Sicily
    JEL: R58 R11
    Date: 2012–12
  11. By: Melchor Fernández Fernández; Manuel Flores Mallo (Universidade de Santiago de Compostela - IDEGA)
    Abstract: The two official statistics that periodically measure the evolution of unemployment in Spain, that is, the Labour Force Survey (LFS) and the registered unemployment series of the Ministry of Employment and Social Security, show both a similar trend of rapid employment destruction since the beginning of the recent economic crisis. But, they show striking level differences as well, which cause confusion, in particular among the public opinion. For instance, at the end of 2011 the unemployed individuals according to the LFS exceeded by 851.241 the registered unemployed at the public employment service (SPE). Possible explanations to this apparent paradox are: the methodological differences, the different groups at which both statistics are targeted, and the limitations of the administrative source to measure the evolution of unemployment in downturns, where a low probability of finding a job disincentives the job search through the SPE offices. This latter explanation, however, does not apply to all regions. The aim of the present study is to test the validity of the LFS estimates in a specific regionthe Galician labor market by exploiting the microdata from a unique survey of job seekers in 2008 that was specifically designed to measure their real labor market status.
    Keywords: Unemployment, measurement, regional analysis
    JEL: C81 J64 R10
    Date: 2012–06
  12. By: Andrés Rodríguez-Pose; Eduardo I. Palavicini-Corona
    Abstract: Local economic development (LED) strategies are increasingly being recommended as an alternative or a complement to traditional development strategies. However, beyond a limited number of areas where ‘best practices’ have been identified, there has been little systematic monitoring of whether LED really works. This paper uses a purpose-built database of 898 municipalities in Mexico in order to assess, using a quantitative approach, whether the implementation of seven different components of LED – development plan, sustainability, entrepreneurship, capacity building, participation mechanisms, development links, and autonomy – has delivered greater human development across Mexican local governments. The results of the analysis indicate that municipalities engaging in LED during the last two decades have witnessed significant improvements in human development, relative to those which have overlooked LED strategies. The increase in human development has been greatest for those local authorities which have pursued capacity building, the establishment of additional development links and which have drafted a development plan. Greater independence from federal or state initiative has, by contrast, been detrimental for changes in human development at the local level.
    Keywords: local economic development (LED), human development, capacity building, participation, local authorities, local autonomy, Mexico
    JEL: H76 O11
    Date: 2012–11
  13. By: Emilio Blanco (Central Bank of Argentina); Andrés Denes (Central Bank of Argentina); Gastón Repetto (Central Bank of Argentina)
    Abstract: Economist usually think and work taking into account the temporal dimension of economic and financial processes. Time plays a key role in the economic decision making process and is a fundamental input for statistical models useful to analyze and predict social behavior. Thus time invades our practice. By contrast the role of territory in economic analysis is far more neglected. Territory is usually subsumed in other dimensions which are related, but are different. As a generator and promoter of public policies, the Central Bank of Argentina undergoes periodic efforts to measure, study and analyze the access and use of financial services by households and businesses in Argentina. The information gathered for this purposes, although descriptive, presents limitations on the spatial analysis that can be derived from it. Hence, we have systematized the information available to the Central Bank in the last ten years to move beyond that limitation. The result is a set of economic and financial variables and aggregate indicators of financial services market, demand and supply for 3431 Argentine localities. Furthermore, this paper, albeit being preliminary, proposes a system of geo-referenced local indicators which can be used as input for the formulation of economic and financial policies.
    Keywords: financial inclusion, financial policies, financial services, geo-referenced local indicators, spatial analysis
    JEL: C81 G21 R12 R38
    Date: 2012–11
  14. By: Luca Gandullia (University of Genoa, Italy)
    Abstract: The aim of the paper is to review the economic theory of tax assignment across levels of government and the international experience in the use of direct taxes – personal income taxes and taxes on profits and on business value added – for fiscal decentralization. We highlight that as for other options of local taxation there are merits but also drawbacks in the use of direct taxes as a source of financing for sub-central governments and so the final choice about their use or not is a matter of judgment and depends on the political priority to be attached to different objectives, such as efficiency, equity, accountability, tax competition, administrative feasibility and revenue adequacy.
    Keywords: direct taxes, fiscal decentralization, tax assignment
    JEL: H24 H25 H71 H73
    Date: 2012–09
  15. By: Anna Piil Damm (Aarhus University)
    Abstract: Using survey information about characteristics of personal contacts linked with administrative register information on employment status one year later, I show that unemployed survey respondents with many employed acquaintances have a higher job finding rate. Settlement in a socially deprived neighborhood may, therefore, hamper individual labor market outcomes because of lack of employed contacts. I investigate this hypothesis by exploiting a unique natural experiment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municipalities quasirandomly, which successfully addresses the methodological problem of endogenous neighborhood selection. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Furthermore, their labor market outcomes are not affected by the overall employment rate of men living in the neighborhood, but positively affected by the employment rate of non-Western immigrant men and co-national men living in the neighborhood. This is strong evidence that immigrants find jobs in part through their employed immigrant and co-ethnic contacts in the neighborhood of residence and that a high quality of contacts increases the individual’s employment chances and annual earnings.
    Keywords: Residential job search networks, referral, contacts, neighborhood quality, labor market outcomes.
    JEL: J60 J31 R30
    Date: 2012–11

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