nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒03‒23
fifteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. A Spatial Approach to Identifying Agglomeration Determinants By MORI Tomoya; Tony E. SMITH
  2. Summarizing large spatial datasets: Spatial principal components and spatial canonical correlation By Bhupathiraju, Samyukta; Verspagen, Bart; Ziesemer, Thomas
  3. The regional pattern of the U.S. house price bubble - An application of SPC to city level data By Freese, Julia
  4. Modelling Migration and Regional Labour Markets: An Application of the New Economic Geography Model RHOMOLO By Andries Brandsma; d'Artis Kancs; Damiaan Persyn
  5. U.S. State and Local Fiscal Policies and Nonmetropolitan Area Economic Performance: A Spatial Equilibrium Analysis By Yu, Yihua; Rickman, Dan S.
  6. An Empirical Analysis of a Regional Dutch Disease: The case of Canada By Elissaios Papyrakis; Ohad Raveh
  7. A Probabilistic Modeling Approach to the Detection of Industrial Agglomerations By MORI Tomoya; Tony E. SMITH
  8. Where the Streets Have a Name: Income Comparisons in the US By Abel Brodeur; Sarah Flèche
  9. Regional systems of innovation in the Arab region By Nour, Samia Satti Osman Mohamed
  10. Development and biodiversity conservation in Sub-Saharan Africa: A spatial analysis By Ariane Manuela AMIN; Johanna Choumert
  11. Endogenous Structure of Cities: Trade, Commuting, Communication By Sidorov Alexander
  12. Regional Variation of Returns to Education By Backman, Mikaela
  13. Urban-to-Rural Population Growth Linkages: Evidence from OECD TL3 Regions By Paolo Veneri; Vicente Ruiz
  14. A Regional Input-Output Model For Izmir By Osman Aydogus; Cagacan Deger; Elif Tunali Caliskan; Gülcin Gürel
  15. Potenzialità di sviluppo del settore ceramico in regioni a notevole intensità del sapere locale: il caso della Sicilia By Rosario La Rosa

  1. By: MORI Tomoya; Tony E. SMITH
    Abstract: Typical analyses of industrial agglomerations start with some aggregate measure of the "agglomeration degree" for each industry, and attempt to explain differences in these values across industries by regressing them on sets of industrial attributes. But this aggregation makes it difficult to capture the spatial aspects of individual agglomerations. In the present paper, we develop a more explicit spatial approach to identifying agglomeration determinants by means of a two-stage analysis. First, we detect individual spatial clusters of each industry on a map. We then attempt to explain differences in these cluster patterns between industries by employing an appropriate regression framework. Here, cluster employment sizes are regressed on selected regional attributes for each industry-cluster pair, and significant differences between industries are captured in terms of industry-level interactions with these attributes. This modeling approach is then applied to the three-digit manufacturing industries in Japan.
    Date: 2013–03
  2. By: Bhupathiraju, Samyukta (UNU-MERIT/MGSoG); Verspagen, Bart (UNU-MERIT/MGSoG, and Maastricht University); Ziesemer, Thomas (UNU-MERIT/MGSoG, and Maastricht University)
    Abstract: We propose a method for spatial principal components analysis that has two important advantages over the method that Wartenberg (1985) proposed. The first advantage is that, contrary to Wartenberg's method, our method has a clear and exact interpretation: it produces a summary measure (component) that itself has maximum spatial correlation. Second, an easy and intuitive link can be made to canonical correlation analysis. Our spatial canonical correlation analysis produces summary measures of two datasets (e.g., each measuring a different phenomenon), and these summary measures maximize the spatial correlation between themselves. This provides an alternative weighting scheme as compared to spatial principal components analysis. We provide example applications of the methods and show that our variant of spatial canonical correlation analysis may produce rather different results than spatial principal components analysis using Wartenberg's method. We also illustrate how spatial canonical correlation analysis may produce different results than spatial principal components analysis.
    Keywords: spatial principal components analysis, spatial canonical correlation analysis, spatial econometrics, Moran coefficients, spatial concentration
    JEL: R10 R15 C10
    Date: 2013
  3. By: Freese, Julia (Helmut Schmidt University, Hamburg)
    Abstract: The recent U.S. house price bubble and the subsequent deep financial crisis have renewed the interest in reliable identification methods for asset price bubbles. While there is a growing number of studies focussing on the detection of U.S. regional bubbles, estimations of the likely starting points in different local U.S. markets are still rare. Using regional data from 1990 to 2010 methods of Statistical Process Control (SPC) are used to test for house price bubbles in 17 major U.S. cities. Based on the EWMA control chart we also present estimations of the likely starting point of the regional bubbles. As a result, we find indications of house price bubbles in all 17 considered cities. Interestingly enough, the recent bubble was not a homogeneous event since regional starting points range from 1996 to 2002.
    Keywords: statistical process control; real estate; bubble; regional U.S. house prices
    JEL: C32 E44 R11
    Date: 2013–01–01
  4. By: Andries Brandsma; d'Artis Kancs; Damiaan Persyn
    Abstract: The present paper describes the modelling of regional labour markets in the newly developed dynamic spatial general equilibrium model RHOMOLO, where the labour market equilibrium is determined by firms' labour demand, a wage-curve determining unemployment, and inter- regional labour migration. The RHOMOLO model is parameterised by estimating the key structural parameters econometrically. In order to illustrate the potential of the proposed dynamic spatial general equilibrium approach for analysing regionally integrated labour markets, we carry out simulations showing the effects of a reduction in transportation cost, and assess the impact on regional labour markets. Our results confirm that wages and unemployment are by far the most important channels of adjustment to macro-economic and policy shocks in the EU. In contrast, labour migration plays a secondary role in labour market adjustments in the EU. Our results also suggest that the relationship between market access, labour demand and labour supply is non-linear and spatially inter-dependent, which underlines the importance of the proposed dynamic spatial general equilibrium approach.
    Date: 2013
  5. By: Yu, Yihua; Rickman, Dan S.
    Abstract: Faced with declining economic bases, many nonmetropolitan areas increasingly have become concerned about their future economic viability. A crucial dimension of this concern is the balancing of the need to be cost-competitive in terms of lower taxes against the need for provision of valued government services. Using a spatial equilibrium framework, this study econometrically examines the nexus between U.S. state and local fiscal policies and nonmetropolitan county growth in earnings and housing rents during the 1990s. The results suggest that state and local fiscal characteristics were important location determinants. Some characteristics could be clearly identified as having dominant firm profit effects while numerous others were identified as having household amenity effects. In addition, fiscal policies appeared to be more important for economic growth of nonmetropolitan counties which were remote from metropolitan areas than they were for counties adjacent to metropolitan areas.
    Keywords: Regional Fiscal Policies; Rural Development; Spatial Equilibrium
    JEL: H30 R51 R58
    Date: 2013–03–12
  6. By: Elissaios Papyrakis; Ohad Raveh
    Abstract: While there has been extensive research on the Dutch Disease (DD) very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a 'regional DD' by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect (SE) and the Resource Movement Effect (RME). Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labor (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighboring regions are associated with a capital (labor) shift from (to) non-primary tradable sectors in the sourc eregion. (c) The (spatial) DD explains (51%) 20% of the adverse effects of resource windfalls (in neighboring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.
    Keywords: Regional Dutch Disease, Inflation, Exports
    JEL: F10 N92 O18
    Date: 2013
  7. By: MORI Tomoya; Tony E. SMITH
    Abstract: Dating from the seminal work of Ellison and Glaeser [7] in 1997, a wealth of evidence for the ubiquity of industrial agglomerations has been published. However, most of these results are based on analyses of single (scalar) indices of agglomeration. Hence, it is not surprising that industries deemed to be similar by such indices can often exhibit very different patterns of agglomeration—with respect to the number, size, and spatial extent of individual agglomerations. The purpose of this paper is thus to propose a more detailed spatial analysis of agglomeration in terms of multiple-cluster patterns, where each cluster represents a (roughly) convex set of contiguous regions within which the density of establishments is relatively uniform. The key idea is to develop a simple probability model of multiple clusters, called cluster schemes, and then to seek a "best" cluster scheme for each industry by employing a standard model-selection criterion. Our ultimate objective is to provide a richer characterization of spatial agglomeration patterns that will allow more meaningful comparisons of these patterns across industries.
    Date: 2013–03
  8. By: Abel Brodeur; Sarah Flèche
    Abstract: This paper analyses how neighbors' income affect agents' well-being using unprecedented data from the BRFSS and the City of Somerville. We conduct a multi-scale approach at the county, ZIP code and street-levels and find that the association between well-being and neighbors' income follows an inverted U-shaped pattern in the size of the area. We find a negative relationship between well-being and neighbors' income in the county of residence, but the opposite at the ZIP code-level. Our results are consistent with the fact that agents enjoy living in a rich ZIP code but also having poor faraway neighbors since they have preferences for high social status. We test explicitly this interpretation by including amenities and the relative rank in the local income distribution in our model. At the street-level, we find a negative association between neighbors' income and self-reported well-being indicating the presence of income comparisons between very close neighbors.
    Keywords: Income comparisons, rank, relative utility, social interactions, social status, well-being
    JEL: C25 D00 J31
    Date: 2013–03
  9. By: Nour, Samia Satti Osman Mohamed (Faculty of Economic and Social Studies, Khartoum University, and UNU-MERIT/MGSoG)
    Abstract: This paper employs both the descriptive and comparative approaches and uses the definition of systems of innovation used in the literature to examine the existence, characteristics and implications of the regional systems of innovation in the Arab region. We examine three hypotheses, that the regional systems of innovation exist but are characterized by serious weaknesses in the Arab region compared with other world regions, that the structure of the economy has a significant effect in the performance of innovation systems in the Arab region, and that the poor Arab systems of innovation have serious implications in the Arab region. We explain two common characteristics of Arab regional systems of innovation concerning poor subsystems of education, S&T, R&D and ICT institutions in the Arab region and concentration of R&D activities within public and universities sectors and small contribution of the private sector in R&D activities. We find that the major implications are the poor performance of the Arab region in terms of S&T indicators, competitiveness indicators, technology achievement index and poor integration in the knowledge economy index. Therefore, it is essential for the Arab region to enhance the institutions of higher education, S&T, R&D and ICT to build the Arab regional systems of innovation and to achieve economic development in the Arab region.
    Keywords: Education, S&T, R&D, Systems of innovation, economic structure, Arab region
    JEL: O10 O11 O30
    Date: 2013
  10. By: Ariane Manuela AMIN (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Johanna Choumert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: A better understanding of the relationship between economic development and biodiversity loss is of great relevance, given the current rapid extinction of species along with challenges born from the context of economic development in poor countries. The purpose of the current study is to provide a sound analysis, within the framework of an Environmental Kuznets Curve, of the relationship between economic development and pressure on biodiversity. Drawing on the most up-to-date data on threatened species from 48 sub-Saharan African countries, we used Maximum-likelihood and generalized spatial two-stage least-squares estimators to account for spatial-autoregressiveness in the dependent variable, as well as in the explanatory variables and in the disturbances of the models. We find evidence that supports an inverted U-shaped relationship between development and biodiversity imperilment, measured as the percent of threatened bird species. The results also reveal some species-level differences in the biodiversity-development relationship, since the Environmental Kuznets Curve hypothesis doesn't hold for mammals. This analysis contributes to the literature by partially challenging the paradigm of a strictly negative relationship between biodiversity and development in a developing countries context.
    Keywords: biodiversity;species imperilment;Spatial econometrics;Cliff-Ord model;spatial Durbin model
    Date: 2013–03–11
  11. By: Sidorov Alexander
    Abstract: The purpose of paper is to investigate how the interplay of trade, commuting and communication costs shapes economy at both inter-regional and intra-urban level. Specifically, we study how trade affects the internal structure of cities and how decentralizing the production and consumption of goods in secondary employment centers allows firms located in a large city to maintain their predominance. The feature of approach is using of two-dimensional city pattern instead of the “long narrow city” model.
    JEL: F12 F22 R12 R14
    Date: 2013–11–03
  12. By: Backman, Mikaela (Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics (CEnSE))
    Abstract: Returns to education are mainly influenced by the characteristics of the individual. However, returns are also likely to depend on location characteristics. Thus, there are different location premiums for educational attainment. This paper analyse the regional variation of returns to education where Swedish municipal markets are divided into four categories based on size and commuting patterns. Through the obtained results, the often-assumed hypothesis of equal returns to education for all regions in a country can be rejected. Highest returns to education are found in municipalities in metropolitan functional regions and the lowest in peripheral municipalities in small functional regions.
    Keywords: Returns to education; regional attributes; fixed-effects model
    JEL: H52 I21 I22 J61 R11
    Date: 2013–03–15
  13. By: Paolo Veneri; Vicente Ruiz
    Abstract: The objective of this paper is to better understand how the population growth rates of rural regions are affected by their closeness to urban regions and by the economic performance of the latter. By means of a cross-sectional analysis of OECD TL3 regions, it identifies the growth spillover effects from the net effect of distance to non-rural places. Distance-based measures are used to approximate the extent to which urban and rural areas are integrated in relational terms. Results shows that positive growth spillovers exist, suggesting that spread effects overcome backwash effects and thus that rural regions benefit from the growth process taking place in urban and intermediate regions. After having controlled for these growth spillovers, the distance from urban and intermediate regions has a negative effect on the population growth rate of rural regions. Nevertheless, both the strength of this effect and the growth spillovers decay with distance. Results further suggest that proximity to urban areas has higher positive influence than to intermediate areas.
    Keywords: growth, linkages, spillovers, urban, rural
    JEL: R11 R12 R58
    Date: 2013–03–13
  14. By: Osman Aydogus (Department of Economics, Ege University); Cagacan Deger (Department of Economics, Ege University); Elif Tunali Caliskan (Department of Economics, Ege University); Gülcin Gürel (Department of Economics, Ege University)
    Abstract: Input-output (I-O) tables provide a snapshot of an economy, with details on i) intersectoral exchange of intermediate inputs, ii) components of final demand for sectoral outputs, and iii) components of sectoral value added and production. The tables are generally prepared by national statistics institutes at a national level. Even though their policy and academic value are not refuted, regional tables and regional models are seldom produced. This paper presents a 36 sector regional I-O table, the 2008 IZKA (Izmir Kalkinma Ajansi, Izmir Development Agency) Izmir Table, and a model for the Izmir province of Turkey. Table construction process requires an update of the available Turkish national table. The update of the national table and the construction of the regional model are detailed. A structural analysis of the Izmir province is performed through the constructed table.
    Keywords: Input-output models, planning policy, regional economics
    JEL: C67 C81 O21 R11 R15 R58
    Date: 2013–02
  15. By: Rosario La Rosa
    Abstract: The first part of the article deals with the artistic ceramics sector, and it shows that the performance of firms in Sicilian “ceramics’ cities” is modest, if compared to Central and North-East Italian districts. This is due to the small dimension of Sicilian firms, and to their “familiar” nature: organizational skills and network links – among firms and with public institutions – are limited. While firms in North and Central Italy are well aware of being part of an integrated system (be it a district or simply a cluster), Sicilian firms behave as individual subjects. This entails different choices as far as production (for housing and furnishing), marketing and agglomeration economies are concerned. The necessity of closer links between firms, policy-makers and local institutions is underlined, for detecting the final goals of the sector, and the appropriate and consistent behaviours of the actors. Sharing firms’ choices makes easier for each single firm to benefit from the achieved system objectives and, thus, can favour, through the inter-firm cooperative link, the self-determination of the objectives themselves. The second part of the article suggests that an industrial development of the sector is necessary in Sicily: local firms have to overcome the current under-capitalization. Large scale and highly capitalized production is possible in this sector, especially for specific production like square tile or tiled-floor, in which the specific local elements can anyway be present (one can think, for instance of the design characteristics). The extension of product varieties leads to larger demand, for all products; this is particularly true, in the presence of a globalised demand for industrial products, which can pay attention to the handcraft product as well. However, infrastructure and local public services are necessary for Sicily to be able to attract investment from firms currently located in Northern Italy (e.g., in Emilia-Romagna): possible investments from such successful firms could be very important to support the development of the ceramics sector in Sicily.
    Keywords: organizzazione idustriale; cluster; istituzioni; Sicilia
    JEL: L20 L53 L61
    Date: 2013

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