nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒03‒02
thirteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Regional equilibrium and migration patterns in the Americas 1960–2005: Spatial data panel analysis By Hernán Enríquez Sierra; Jacobo Campo Robledo
  2. The Spatial Dimension of US House Price Developments By Katharina Pijnenburg
  3. Occurrence of cluster structures in knowledge-intensive services By Schricke, Esther
  4. Geography and Intra-National Home Bias: U.S. Domestic Trade in 1949 and 2007 By Nicholas Crafts; Alexander Klein
  5. Urbanisation and Migration Externalities in China By Pierre-Philippe Combes; Sylvie Démurger; Shi Li
  6. Vietnam's evolving poverty map : patterns and implications for policy By Lanjouw, Peter; Marra, Marleen; Nguyen, Cuong
  7. Natural-resource or Market-seeking FDI in Russia? An Empirical Study of Locational Factors Affecting the Regional Distribution of FDI Entries By K. Gonchar; Philipp Marek
  8. Sequential city growth in the US: does age matter? By María Sánchez-Vidal; Rafael González-Val; Elisabet Viladecans-Marsal
  9. Improving regional performance in Russia: a capability-based approach  By Fadi Farra; Nadia Klos; Uwe Schober; Olga Sigalova; Alexander Zhukov
  10. Suburbanization and highways: when the romans, the bourbons and the first cars still shape Spanish cities By Miquel- Àngel Garcia-López; Adelheid Holl; Elisabet Viladecans-Marsal
  11. Balanced Skills and the City: An Analysis of the Relationship between Entrepreneurial Skill Balance, Thickness and Innovation By Elisabeth Bublitz; Michael Fritsch; Michael Wyrwich
  12. The Transnational Origins of Constituions: Evidence From a New Global Data Set On Constitional Rights By Goderis, B.V.G.; Versteeg, M.
  13. Understanding Long-run Price Dispersion By Mario J. Crucini; Hakan Yilmazkuday

  1. By: Hernán Enríquez Sierra; Jacobo Campo Robledo
    Abstract: This paper analyzes the migration dynamics in the Americas from 1960 to 2005 using an equilibrium approach. Using recent spatial econometrics techniques, the migration flow is evaluated, controlling for the labor mobility effect and regional wages. Additionally, the estimated model looks for variations in migration by taking into account the distinctive population features in each country, namely the working age population, unemployment rate and relative wages. The estimated model shows that the spatial equilibrium related to net migration is negatively affected by wages and positively influenced by labor supply in the region.
    Date: 2013–01–30
  2. By: Katharina Pijnenburg
    Abstract: Spatial heterogeneity and spatial dependence are two well established aspects of house price developments. However, the analysis of differences in spatial dependence across time and space has not gained much attention yet. In this paper we jointly analyze these three aspects of spatial data. We apply a panel smooth transition regression model that allows for heterogeneity across time and space in spatial house price spillovers and for heterogeneity in the effect of the fundamentals on house price dynamics. We find evidence for heterogeneity in spatial spillovers of house price developments across space and time: house price developments in neighboring regions spill over stronger in times of increasing neighboring house prices compared to declining neighboring house prices. This is interpreted as evidence for the disposition effect. Moreover, heterogeneity in the effect of the fundamentals on house price dynamics could not be detected for all variables; real per capita disposable income and the unemployment rate have a homogeneous effect across time and space.
    Keywords: Heterogeneity in spatial dependence, Panel smooth transition regression, housing prices, disposition effect
    JEL: C23 R12 R31
    Date: 2013
  3. By: Schricke, Esther
    Abstract: The aim of this article was to investigate how far clusters in knowledge-intensive service industries have developed and what kind of agglomeration advantages they generate. Therefore the first step was to analyse which knowledge-intensive service industries exhibit spatial concentration. Based on this analysis, the absolute as well as the relative concentrations in these industries was examined at the NUTS 3 level. The results show that cluster structures have developed in some but not all knowledge-intensive industries of the service sector. A high measure of spatial concentration does not necessarily mean that a cluster exists, since especially in less urban region high localisation quotients are frequently ascribed to either one company or only a small number of companies. The knowledge-intensive services with cluster structures differ with regard to external effects, each of which becomes important: a highly qualified labour pool is by definition important for all knowledge-intensive industries of the service sector and fundamental for the existence of cluster structures in each of the examined services. Nevertheless there are however crucial differences regarding the significance of further external effects. Porter-externalities do not appear to stimulate competiveness in any of the examined industries of the service industry. However, none of the available studies explicitly examined the aspect of competition. Thus the interplay of agglomeration advantages needs to be researched further. The type of knowledge and the market environment should also be regarded as important factors (Orsenigo 2006: 201). Contact to local suppliers and customers in industries that are characterized by project work, such as the film and television industry or the media, are particularly important. Supporting clusters and networks is currently fashionable and is practised by different actors. The results show that cluster and network policies have to be focussed on the field of activity. It seems in any case sensible to expand the knowledge and education infrastructure in knowledge-intensive services which do not have cluster structures. The spatial proximity of actors in the innovation process or of suppliers and customers is not always advantageous. Too strong a focus on spatially concentrated exchange processes, leading to an isolation from global trends, can prove to have negative effects in the long term. In this respect the great importance of a qualified labour pool provides a starting point for policy measures that could also be useful for other fields of activity. This includes the development and financing of (partially specialised) educational institutions or measures. The appeal of the surroundings is also important to tie highly qualified staff to a region, as the discussion on a creative class (Florida 2002; 2005) also shows. While factors such as urbanity can hardly be influenced politically, there are certain initiatives regions can adopt to compensate for the lack of attractiveness. In regions where companies find it difficult to attract qualified staff from other regions higher education institutions are important sources of qualified staff. Therefore increasing the attractiveness of higher education institutions and of relevant study programmes are a first starting point. Likewise, the example of ITsax shows how companies can cooperate successfully in the area of recruitment. Furthermore, the provision of childcare facilities or international schools is important for the creation of attractive conditions particularly for women and / or international employees. --
    Date: 2013
  4. By: Nicholas Crafts; Alexander Klein
    Abstract: This paper examines home bias in U.S. domestic trade in 1949 and 2007. We use a unique data set of 1949 carload waybill statistics produced by the Interstate Commerce Commission, and 2007 Commodity Flow Survey data. The results show that home bias was considerably smaller in 1949 than in 2007 and that home bias in 1949 was even negative for several commodities. We argue that the difference between the geographical distribution of the manufacturing activities in 1949 and that of 2007 is an important factor explaining the differences in the magnitudes of home-bias estimates in those years.
    Keywords: intra-national home bias; spatial clustering; manufacturing belt; gravity equation
    JEL: F14 F18
    Date: 2013–02
  5. By: Pierre-Philippe Combes (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Sylvie Démurger (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon); Shi Li (School of Economics and Business Administration - School of Economics and Business Administration - Beijing Normal University)
    Abstract: We evaluate the role that cities play on individual productivity in China. First, we show that location explains a large share of nominal wage disparities. Second, even after controlling for individual and -firms characteristics and instrumenting city characteristics, the estimated elasticity of wage with respect to employment density is about three times larger than inWestern countries. Land area and industrial specialisation also play a significant role whereas the access to external markets does not. Therefore, large agglomeration economies prevail in China and they are more localised than in Western countries. Third, we -find evidence of a large positive impact of the local share of migrants on local workers'wages. Overall, these results strongly support the productivity gains that can be expected from further migration and urbanisation in China.
    Keywords: urban development; agglomeration economies; wage disparities; migration; China
    Date: 2013–02–07
  6. By: Lanjouw, Peter; Marra, Marleen; Nguyen, Cuong
    Abstract: This paper uses small area estimation techniques to update Vietnam's province and district-level poverty map to 2009. It finds that poverty rates continue to be highest in the northern and central mountainous regions, where ethnic minorities make up a large fraction of the population. Poverty has fallen in most provinces and districts over this decade, but the pace of poverty reduction has been least pronounced in those localities with high initial poverty or inequality levels. As a result, poverty rates have become more spatially concentrated over time, which is consistent with widely observed growth processes linked to agglomeration. The authors hypothesize that this makes geographic targeting of the poor more relevant as a means to re-balance growing welfare disparities between geographic areas. Simulations indicate that in both 1999 and 2009, geographic targeting for poverty alleviation improves upon a uniform lump-sum transfer and this becomes more evident the more spatially disaggregated the target populations. The analysis further indicates that the gains from geographic targeting have become more pronounced over time in Vietnam. Although poverty reduction in Vietnam has been impressive, further progress may thus warrant increased attention to geographic targeting.
    Keywords: Rural Poverty Reduction,Regional Economic Development,Subnational Economic Development,Achieving Shared Growth
    Date: 2013–02–01
  7. By: K. Gonchar; Philipp Marek
    Abstract: This paper conducts an empirical study of the factors that affect the spatial distribution of foreign direct investment (FDI) across regions in Russia; in particular, this paper is concerned with those regions that are endowed with natural resources and market-related benefits. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and linked regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that one theory alone is not able to explain the geographical pattern of foreign investments in Russia. A combination of determinants is at work; market-related factors and the availability of natural resources are important factors in attracting FDI. The relative importance of natural resources seems to grow over time, despite shocks associated with events such as the Yukos trial. Second, existing agglomeration economies encourage foreign investors by means of forces generated simultaneously by sector-specific and inter-sectoral externalities. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions. The results are robust when Moscow is excluded and for subsamples including only Greenfield investments or both Greenfield investments and mergers and acquisitions (M&A).
    Keywords: multinational enterprises, regional economic activity, exhaustible resources and economic development
    JEL: F23 R11 Q34
    Date: 2013–02
  8. By: María Sánchez-Vidal (Universitat de Barcelona & IEB); Rafael González-Val (Universidad de Zaragoza & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: We provide empirical evidence of the dynamics of city size distribution for the whole of the twentieth century in U.S. cities and metropolitan areas. We focus our analysis on the new cities that were created during the period of analysis. The main contribution of this paper, therefore, is the parametric and nonparametric analysis of the population growth experienced by these new-born cities. Our results enable us to confirm that, when cities appear, they grow very rapidly and, as the decades pass, their growth slows or even falls into decline. This is consistent with the theoretical framework regarding mean reversion (convergence) in the steady state and with the theories of sequential city growth.
    Keywords: Cities, sequential city growth, city size distribution
    JEL: O18 R11 R12
    Date: 2013
  9. By: Fadi Farra (Whiteshield Partners); Nadia Klos (Whiteshield Partners); Uwe Schober (Whiteshield Partners); Olga Sigalova (Whiteshield Partners); Alexander Zhukov (Whiteshield Partners)
    Abstract: Over the past 15 years, while China’s economy has become more complex and export driven, Russia's economy has become less complex and less competitive. Economic policies have so far largely failed to boost two key drivers of economic development: knowledge and capability building. Building on a new Regional Capability Index as well as historical and case study analysis, we develop a set of scenarios and recommended models to address capability gaps and enhance the competitiveness of Russia.
    Keywords: regional development, competitiveness, product space, innovation, Russia
    JEL: O11 O14 O33 F43
    Date: 2013–01
  10. By: Miquel- Àngel Garcia-López (Universitat Autònoma de Barcelona & IEB); Adelheid Holl (CSIC, Institute for Public Goods and Policies); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: We estimate the effects of highways on the suburbanization of Spanish cities. First, we extend previous findings for the US and China by providing evidence for Europe: each additional highway ray built between 1991 and 2006 produced a 5 per cent decline in central city population between 1991 and 2011. Second, our main contribution is at the intrametropolitan level. We find that highway improvements influence the spatial pattern of suburbanization: suburban municipalities that were given improved access to the highway system between 1991 and 2006 grew 4.6% faster. The effect was most marked in suburbs located at 5–11 km from the central city (7.1%), and concentrated near the highways: population spreaded out along the (new) highway segments (4.7%) and ramps (2.7%). To estimate the causal relationship between population growth and highway improvements, we rely on an IV estimation. We use Spain’s historical road networks – Roman roads, 1760 main post roads, and 19th century main roads – to construct our candidates for use as instruments.
    Keywords: Suburbanization, highways, transportation infrastructure
    JEL: R4 O2
    Date: 2013
  11. By: Elisabeth Bublitz (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: Being a "jack-of-all-trades" increases the probability of running an entrepreneurial venture successfully; but what happens to "jack-of-few-trades" who lack sufficient skills? This paper investigates a possible compensation mechanism between balanced skills and cities, and how this compensatory measure relates to performance. Specifically, we test and find support for the idea put forward by Helsley and Strange (2011) that high market thickness, such as that found in cities, can compensate for a lack of entrepreneurial skill balance. The results indicate that entrepreneurs with low skill balance benefit more from locating in cities than their counterparts with high skill balance. Innovative firms do not differ from other businesses in this respect.
    Keywords: Agglomeration, Entrepreneurship, Balanced Skills, Thick Markets, Urban Diversity
    JEL: R1 L26 J24 O31
    Date: 2013–02–26
  12. By: Goderis, B.V.G.; Versteeg, M. (Tilburg University, Center for Economic Research)
    Abstract: Abstract Constitutions are commonly described as national products shaped by domestic politics. This paper develops and empirically tests a different hypothesis, which is that constitutions are also shaped by transnational influence, or “diffusionâ€. Constitutional rights can diffuse through four mechanisms: coercion, competition, learning and acculturation. To test diffusion, we traced the historical documents of all post-WWII constitutions and documented the presence of 108 constitutional rights. Using a sample of these rights in 180 countries between 1948 and 2001, we estimate a spatial lag model to explain their adoption. Our results show that countries follow the choices of their former colonizer, countries with the same legal origin, the same religion, the same former colonizer, and the same aid donor. We also find that diffusion explains only 3 percent of the variation in adoption. However, when a country adopts its first constitution, diffusion is much stronger and explains 46 percent of the variation.
    Keywords: constitutions;diffusion;human rights;spatial econometrics
    JEL: K19 C21 O33
    Date: 2013
  13. By: Mario J. Crucini; Hakan Yilmazkuday
    Abstract: We use a unique panel of retail prices spanning 123 cities in 79 countries from 1990 to 2005, to uncover six novel properties of long-run international price dispersion. First, at the PPP level, virtually all (91.6%) of price dispersion is attributed to service-sector wages, consistent with a dominant role of the retail distribution margin. Second, at the level of individual goods and services, the average contribution of service-sector wages is significantly reduced, one-third as large (31.9%). This reflects the fact that good-specific sources of price dispersion, such as trade costs and good-specific markups, tend to average out across goods. Third, at the LOP level, borders and distance contribute about equally to price dispersion with distance elasticities consistent with the existing trade gravity literature which links trade volumes (rather than relative prices) to borders and distance. Fourth, in the cross-section, price dispersion is rising in the distribution share consistent with the notion that baby-sitting services and haircuts embody local wages to a far greater extent than highly traded manufactured goods. Fifth, we provide the first estimates of distribution margins at the micro-level and show them to be very different across goods and substantial in the aggregate, where they account for about 55% of consumption expenditure. Sixth, these estimates are broadly consistent with more aggregated U.S. NIPA measures currently used in the literature.
    JEL: F0 F11 F15
    Date: 2013–02

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