nep-geo New Economics Papers
on Economic Geography
Issue of 2012‒12‒22
eighteen papers chosen by
Vassilis Monastiriotis
London School of Economics

  1. Interregional Trade and Transport Connectivity. An Analysis of Spatial Dependence By Luisa Alamá-Sabater; Laura Márquez-Ramos; Celestino Suárez-Burguet; J. Miguel Navarro-Azorín
  2. Diagnóstico y perspectivas del sector terciario en las regiones mexicanas By Rosa María García Almada
  3. Economía y desarrollo en Chihuahua, México. Una propuesta de análisis regional By Jorge Arturo Meza Moreno
  4. Productivity As If Space Mattered: An Application to Factor Markets Across China By Wenya Cheng; John Morrow; Kitjawat Tacharoen
  5. The determinants of inward foreign direct investment in business services across european regions By Davide CASTELLANI; Valentina MELICIANI; Loredana Mirra
  6. Rethinking the form and function of cities in post-Soviet countries By Coulibaly, Souleymane
  7. Learning by working in big cities By de la Roca, Jorge; Puga, Diego
  8. Cluster Policy as a Development Strategy. Case Studies from the Middle East and North Africa By Maximilian Benner
  9. The changing spatial economic structure of the state of Michigan, through 1970-2008 By Jeroen Bakker
  10. The Costs of Agglomeration: Land Prices in French Cities By Combes, Pierre-Philippe; Duranton, Gilles; Gobillon, Laurent
  11. Inequidad Regional en Colombia By Darwin Cortés; Juan F. Vargas
  12. Price Dispersion, Search Costs and Spatial Competition: Evidence from the Austrian Retail Gasoline Market By Bernd Jost
  13. A regional labour market model for analyzing the impact of a recession By Laura Barbieri; Maurizio Baussola; Chiara Mussida
  14. Political competition and the (in)effectiveness of redistribution in a federation By Ikuho Kochi & Raúl Alberto Ponce Rodríguez
  15. Regional Unemployment, Gender and Time Allocation of the Unemployed By Gimenez-Nadal, Jose Ignacio; Molina, José Alberto
  16. An Analysis of the Employment Effects of the Washington High Technology Business and Occupation (B&O) Tax Credit By Timothy J. Bartik; Kevin Hollenbeck
  17. Urban Heat Island adaptation through Urban Planning and Design: the struggle of the city of Los Angeles By Hidde van Oostroom
  18. The Impact of the U.S. Housing Bubble and Crisis on the Process of Urban Sprawl in the Phoenix Metropolitan Area By Robert Kitzmann

  1. By: Luisa Alamá-Sabater (Economics Department, Universitat Jaume I, Castellón, Spain); Laura Márquez-Ramos (Economics Department, Universitat Jaume I, Castellón, Spain); Celestino Suárez-Burguet (Economics Department, Universitat Jaume I, Castellón, Spain); J. Miguel Navarro-Azorín (Economics Department, Universidad de Cartagena, Spain)
    Abstract: This paper aims to analyze whether transport connectivity affects interregional trade flows from a spatial dependence approach. In order to do so, we consider two neighboring criteria into a spatial autoregressive model. First, we use the geographical criteria of first-order contiguity and, second, we incorporate transport connectivity. The results provide evidence about the role of the location of logistics platforms for satisfying existing demand for transport structure in Spain. Disaggregated interregional trade data and measures of regional logistics performance are not frequently available and then, this paper justifies the need to advance in these two aspects also in other countries.
    Keywords: Interregional trade, transport connectivity, spatial dependence, Spanish regions
    JEL: R12 R23 R48
    Date: 2012
  2. By: Rosa María García Almada (Universidad Autónoma de Ciudad Juárez)
    Abstract: The present paper is intended to expose the potential of economic development in the Mexican regions, based on the analysis of the concentration of product per worker in the different economic activities which together make up the tertiary sector, and taking into account the distribution of FDI, both sectoral and spatial level. This study proposes a nontraditional methodology for measuring and assessing the structural composition of the Mexican regions through regional analysis tools, such as concentration indicators of aggregate and sectoral economic activity. A preliminary conclusion is that the intensification of regional inequalities, both in aggregate economic levels and distribution of personal incomes, is due to the high concentration of productive activity in strategic sectors, but with little positive impacts on other regions that lack a dynamic economic structure.
    Keywords: foreing direct investment, economic regional inequality, tertiary economics sector, México.
    JEL: R11 R12
    Date: 2011–05–01
  3. By: Jorge Arturo Meza Moreno (ITESM)
    Abstract: This essay reviews the links between growth and potential development of a region, in this case focusing on the state of Chihuahua, Mexico. This regional economic study develops a framework that combines growth and competitive dynamics with the potential development model that evaluates de endogenous capacity for development of regions. As a result of the basic findings in this study it is proposed an analytical tool for regional economics named “potential development and territorial situation” (DEPOSITE), which intents to relate the main models used on the present work.
    Keywords: Regional development, economic growth, Chihuahua, potential development, territorial analysis
    JEL: O18 R11 R12 R15
    Date: 2012–03–01
  4. By: Wenya Cheng; John Morrow; Kitjawat Tacharoen
    Abstract: Optimal production decisions depend on local market characteristics. This paper develops a model to explain firm labor demand and firm density across regions. Firms vary in their technology to combine imperfectly substitutable worker types, and locate across regions with distinct distributions of workers and wages. Firm technologies which best match regional labor markets explain both productivity differences and firm density. Estimating structural model parameters is simple and relies on a two stage OLS procedure. The first stage estimates local market conditions using firm employment and regional data, while the second incorporates regional costs into production function estimation. The method is applied to Chinese manufacturing, population census and geographic data to estimate local market costs and production technologies. In line with the model, we find that labor markets which provide cost advantages explain substantial differences in firm productivity. Furthermore, regions which have lower optimal hiring costs attract more firms per capita.
    Keywords: Structural estimation, productivity, firm location, China
    JEL: D22 D24 J24 J30 O15 R11
    Date: 2012–12
  5. By: Davide CASTELLANI; Valentina MELICIANI; Loredana Mirra
    Abstract: The paper accounts for the determinants of inward foreign direct investment in business services across the EU-27 regions. Together with the traditional variables considered in the literature (market size, market quality, agglomeration economies, labour cost, technology, human capital), we focus on the role of forward linkages with manufacturing sectors and other service sectors as attractors of business services FDI at the regional level. This hypothesis is based on the evidence that the growth of business services is mostly due to increasing intermediate demand by other services industries and by manufacturing industries and on the importance of geographical proximity for forward linkages in services. To our knowledge, there are no studies investigating the role of forward linkages for the location of FDI. This paper aims therefore to fill this gap and add to the FDI literature by providing a picture of the specificities of the determinants of FDI in business services at the regional level. The empirical analysis draws upon the database fDi Markets, from which we selected projects having as a destination NUTS 2 European regions in the sectors of Business services over the period 2003-2008. Data on FDI have been matched with data drawn from the Eurostat Regio database. Forward linkages have been constructed using the OECD Input/Output database. By estimating a negative binomial model, we find that regions specialised in those (manufacturing) sectors that are high potential users of business services attract more FDI than other regions. This confirms the role of forward linkages for the localisation of business service FDI, particularly in the case of manufacturing.
    Keywords: FDI, Business Services, Regional Specialisation, Forward linkages
    JEL: R12 L80 F23
    Date: 2012–09–01
  6. By: Coulibaly, Souleymane
    Abstract: Eurasian cities, unique in the global spatial landscape, were part of the world's largest experiment in urban development. The challenges they now face because of their history offer valuable lessons to urban planners and policymakers across the world from places that are still urbanizing to those already urbanized. Today, Eurasian cities must respond to three big changes: the breakup of the Soviet Union, the return of the market as the driving force of society, and the emergence of regional powers such as the European Union, China, and India that are competing with the Russian Federation for markets and influence in its former satellites. Several methods of analysis indicate an imbalance across Eurasia, implying a need to readjust Eurasia's urban structure. National policies in Eurasia are still preoccupied with spatial equity. But the concentration of economic activity in large cities is fundamental to national competitive advantage: they foster innovation through their diversity of industries -- and reduce production costs through their economies of scale. This paper suggests some ideas on how policymakers can harness the economic power of cities to drive national economic development, by focusing on four themes: planning, connecting, greening, and financing cities.
    Keywords: Transport Economics Policy&Planning,Environmental Economics&Policies,City Development Strategies,Banks&Banking Reform,Housing&Human Habitats
    Date: 2012–12–01
  7. By: de la Roca, Jorge; Puga, Diego
    Abstract: Individual earnings are higher in bigger cities. We consider three reasons: spatial sorting of initially more productive workers, static advantages associated with workers' current location, and learning by working in big cities. Using rich administrative data for Spain, we find that workers in bigger cities do not have higher unobserved initial ability, as reflected in individual fixed-effects. Instead, they obtain an immediate static premium while working in bigger cities and also accumulate more valuable experience, which increases their earnings faster. The additional value of experience accumulated in bigger cities persists even after workers move away and is even stronger for those with higher unobserved initial ability. This combination of effects explains both the higher mean and the greater dispersion of earnings in bigger cities.
    Keywords: agglomeration economies; city size; earnings premium; learning
    JEL: J31 R10 R23
    Date: 2012–12
  8. By: Maximilian Benner
    Abstract: Cluster policy has become a method of choice for policymakers in many countries. Promoting strong localized industries is an appealing perspective for practitioners, as it can be seen as a way to anchor economic activity in regions in an era of globalization. If cluster policy is successful, it can contribute to the creation of employment and to the initiation of growth processes in urban regions and even in some rural ones. This makes cluster policy an interesting tool for economic policy in developing countries. This article offers some theoretical considerations on the use of cluster policy and presents case studies from Saudi Arabia, Morocco, Tunisia, and Algeria.
    Keywords: economic development, economic growth, industrial policy, regional policy, development policy, cluster policy, cluster theory, Saudi Arabia, Morocco, Tunisia, Algeria
    JEL: O14 O18 O25 O30 O43 O53 O55 O57 P25 R11 R12 R38 R58
    Date: 2012–12
  9. By: Jeroen Bakker
    Date: 2012–09–26
  10. By: Combes, Pierre-Philippe (GREQAM, University of Aix-Marseille); Duranton, Gilles (University of Toronto); Gobillon, Laurent (INED, France)
    Abstract: We develop a new methodology to estimate the elasticity of urban costs with respect to city population using French land price data. Our preferred estimate, which handles a number of estimation concerns, stands at 0.041. Our approach also yields a number of intermediate outputs of independent interest such as a distance gradient for land prices and the elasticity of unit land prices with respect to city population. For the latter, our preferred estimate is 0.72.
    Keywords: urban costs, land prices, land use, agglomeration
    JEL: R14 R21 R31
    Date: 2012–11
  11. By: Darwin Cortés; Juan F. Vargas
    Abstract: 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: 2012–10–02
  12. By: Bernd Jost
    Date: 2012–09–26
  13. By: Laura Barbieri (DISCE, Università Cattolica); Maurizio Baussola (DISCE, Università Cattolica); Chiara Mussida (DISCE, Università Cattolica)
    Abstract: The effects of the recent economic recession have been widely discussed, particularly at the macro economic level. However, the economic downturn has been pervasive and has also determined a range of economic effects at different territorial levels. It has therefore become necessary to set up appropriate analytical tools aimed at investigating the impact of the economic downturn at the regional level, and to implement adequate policy options to mitigate such negative impacts. We propose a new macro-micro econometric framework which incorporates simultaneously both aggregate labour demand and supply, and the labour market flows determining the steady-state unemployment rate. We can thus simulate demand or supply shocks and therefore assess their impacts on labour demand and supply, and also on unemployment and labour market flows. This enables us to pinpoint the dynamic effects of such shocks and to compare the different behaviours of the regional framework and of the economy as a whole.
    Keywords: regional econometric models, labour demand and supply, labour market flows, steady-state unemployment rate.
    JEL: E1 E17 R2 R23
    Date: 2012–07
  14. By: Ikuho Kochi & Raúl Alberto Ponce Rodríguez (Universidad Autónoma de Ciudad Juárez)
    Abstract: We analyze political and economic conditions in which the effectiveness of public redistribution might be low in a federation. In our economy, the central government redistributes income while local governments provide a pro poor local public good. If local public spending falls as a response to the ex-post tax-transfer distribution of income engineered by the policy of the central government then public redistribution might be ineffective in redistributing welfare. In this paper we address this issue. Our main findings are: first, if the party of some local government represents a coalition of voters with labor earning abilities below the average earning ability of the economy and the aggregate net transfer from the redistributive program is negative for residents in the locality then local public spending falls in this district as a response to the redistributive policy of the central government. Second, if local governments of all districts are controlled by parties representing voters with sufficiently high marginal utilities of income and labor earning abilities below the nationwide average labor earning ability then public redistribution induces all local governments to reduce local public spending.
    Keywords: Redistributive effects, state and local governments, fiscal policy and behavior of agents, elections
    JEL: H23 H76 H3 D72
    Date: 2012–07–01
  15. By: Gimenez-Nadal, Jose Ignacio (University of Zaragoza); Molina, José Alberto (University of Zaragoza)
    Abstract: This paper analyzes the relationship between time allocation decisions of the unemployed, gender, and regional unemployment rates. Using the Spanish Time Use Survey 2002-2003 and 2009-2010, we find that higher regional unemployment rates are associated with increases in the time devoted to study by men, and to household production by women, and with decreases in the time devoted to personal care by men and leisure by women. We also find evidence favoring consumption smoothing as the channel through which others' unemployment affects time allocation decisions of the unemployed. As higher regional unemployment rates imply a lower availability of jobs for the unemployed, it decreases the expectations individuals have of finding a job, and thus households may try to increase their time spent on household production to reduce the market expenditures needed to maintain their consumption. We interpret our results as evidence that others' unemployment has several effects that need to be considered in the analysis of the wellbeing of the unemployed during business cycles.
    Keywords: unemployment, time use, regional unemployment rates, gender
    JEL: D13 J16 J22
    Date: 2012–11
  16. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research); Kevin Hollenbeck (W.E. Upjohn Institute for Employment Research)
    Abstract: This paper estimates the effects of an R&D tax credit in the state of Washington on job creation. The research uses micro-data on the job creation and tax credits received by individual firms in the state of Washington from 2004 to 2009. We correct for the endogeneity of R&D tax credits received by individual firms by using instrumental variables based in part on national industry factor shares for R&D. We estimate that this tax credit created jobs, but at a high cost. The cost per job-year created is estimated to be between $40,000 and $50,000. The credit was so high cost in part because the credit was non-refundable. As a result, about one-quarter of the firms receiving credits were maxed out on credit eligibility, so that the credit provided no marginal incentive for additional R&D spending or job creation.
    Keywords: R&D tax credits, business incentives, state economic development policies, job creation
    JEL: R38 H71 J23
    Date: 2012–06
  17. By: Hidde van Oostroom
    Date: 2012–09–26
  18. By: Robert Kitzmann
    Date: 2012–12–17

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