nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒03‒30
twelve papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. My Precious! The Location and Diffusion of Scientific Research: Evidence from the Synchrotron Diamond Light Source By Christian Helmers; Henry Overman
  2. A Spatial Approach to Energy Economics By Juan Moreno Cruz; M. Scott Taylor
  3. What Places Grow Faster? An Empirical Analysis of Employment Growth Factors at a Local Level for the Spanish Economy By Diana Gutiérrez Posada; Fernando Rubiera Morollón; Ana Viñuela Jimémez
  4. Innovation Drivers, Value Chains and the Geography of Multinational Firms in European Regions By Riccardo Crescenzi; Carlo Pietrobelli & Roberta Rabellotti
  5. Spatial Price Differences and Inequality in China: Housing Market Evidence By Chao Li; John Gibson
  6. The properties of local knowledge bases and entrepreneurship: Evidence from Italian NUTS 3 regions By Alessandra Colombelli; Francesco Quatraro
  7. An overview of India’s Urbanization, Urban Economic Growth and Urban Equity By Tripathi, Sabyasachi
  8. How Far Do England’s Second-Order Cities Emulate London as Human-Capital ‘Escalators’? By Tony Champion; Mike Coombes; Ian Gordon
  9. The Location of Industrial Innovation: Does Manufacturing Matter? By Isabel Tecu
  10. On the Size and Determinants of Inter-regional Redistribution in European Countries over the Period 1995-2009 By Lago-Peñas, Santiago; Prada, Albino; Vaquero, Alberto
  11. Related Variety, Unrelated Variety and Technological Breakthroughs: An analysis of U.S. state-level patenting By Carolina Castaldi; Koen Frenken; Bart Los
  12. Cocientes de localización mediante una doble parametrización By Xesús Pereira López; André Carrascal Incera; Melchor Fernández Fernández

  1. By: Christian Helmers; Henry Overman
    Abstract: We analyze the impact of the establishment of a GBP 380 million basic scientific research facility in the UK on the geographical distribution of related research. We investigate whether the siting of the Diamond Light Source, a 3rd generation synchrotron light source, in Oxfordshire induced a clustering of related research in its geographic proximity. To account for the potentially endogenous location choice of the synchrotron, we exploit the availability of a `runner-up' site near Manchester. We use both academic publications and patent data to trace the geographical distribution of related knowledge and innovation. Our results suggest that the siting of the synchrotron in Oxfordshire created a highly localized cluster of related scientific research.
    Keywords: Synchrotron, location, innovation, patents
    JEL: R12 R58 O31 O38
    Date: 2013–03
  2. By: Juan Moreno Cruz; M. Scott Taylor
    Abstract: We develop a spatial model of energy exploitation where energy sources are differentiated by their geographic location and energy density. The spatial setting creates a scaling law that magnifies the importance of differences across energy sources. As a result, renewable sources twice as dense, provide eight times the supply; and all new non-renewable resource plays must first boom and then bust. For both renewable and non-renewable energy sources we link the size of exploitation zones and energy supplies to energy density, and provide empirical measures of key model attributes using data on solar, wind, biomass, and fossil fuel energy sources. Non-renewable sources are four or five orders of magnitude more dense than renewables, implying that the most salient feature of the last 200 years of energy history is the dramatic rise in the use of energy dense fuels.
    JEL: Q0 Q4 R0 R12
    Date: 2013–03
  3. By: Diana Gutiérrez Posada; Fernando Rubiera Morollón; Ana Viñuela Jimémez (Regional Economics Laboratory (REGIOlab), University of Oviedo)
    Abstract: The objective of this work is to study employment growth and its determinants in Spain at a high degree of spatial disaggregation. The impossibility of accessing data on GDP at local scale makes this a particularly interesting issue, as employment growth can be used as a proxy of local economic growth and can therefore be expected to provide some insights into the factors determining local economic development. Using the 2001 Census database, we have information on several economic variables at local level (municipalities) which we then aggregate into Local Labour Market Areas (LLMs), as we believe these functional regions may be the ideal level of disaggregation to study employment or economic growth. Based on the ideas of New Economic Geography (NEG), we first analyze the influence of size and geographical position of the LLM on employment growth. As well as considering the Euclidean distance from the LLM to the main metropolitan areas we also use a novel approach based on the notion of incremental distances. Once the importance of the NEG approach is confirmed, we also examine the traditional determinants of economic growth used in macroeconomic studies, but in this occasion applied at local level, such as education, diversification and sectoral structure. Finally, to confirm the relevance of location, spatial auto-regressive models are estimated. Our results show that employment growth is mainly driven by geo-economic variables such as size and distance instead of the economic policy variables in the hands of the central or regional governments.
    Keywords: local employment growth, local labour markets, NEG, incremental distances, local and regional policies, Spain
    JEL: R1 R12
    Date: 2013–03
  4. 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."</HEAD
    Keywords: regions
    Date: 2012–10–01
  5. By: Chao Li (University of Waikato); John Gibson (University of Waikato)
    Abstract: The large literature on regional inequality in China is hampered by incomplete evidence on price dispersion across space, making it hard to distinguish real and nominal inequality. The two main methods used to calculate spatial deflators have been to price a national basket of goods and services across China’s different regions or else to estimate a food Engel curve and define the deflator as that needed for nominally similar households to have the same food budget shares in all regions. Neither approach is convincing with the data available in China. Moreover, a focus on tradable goods like food may be misplaced because of the emerging literature on the rapid convergence of traded goods prices within China that contrasts with earlier claims of fragmented internal markets. In a setting where traded goods prices converge rapidly, the main source of price dispersion across space should come from non-traded items, and especially from housing given the fixity of land. In this paper we use newly available data on dwelling sales in urban China to develop spatially-disaggregated indices of house prices, which are then used as spatial deflators for both provinces and core urban districts. These new deflators complement existing approaches that have relied more on traded goods prices, and are used to re-examine the evidence on the level of regional inequality. Around one-quarter of the apparent spatial inequality disappears once account is taken of cost-of-living differences.
    Keywords: housing; inequality; prices; spatial; China
    JEL: E31 O15 R31
    Date: 2013–03–15
  6. By: Alessandra Colombelli; Francesco Quatraro
    Abstract: This paper investigates the relationship between the creation of new firms and the properties of the local knowledge bases, like coherence, cognitive distance and variety. By combining the literature on the knowledge spillovers of entrepreneurship and that on the recombinant knowledge approach, we posit that locally available knowledge matters to the entrepreneurial process, but the type of knowledge underlying theses dynamics deserve to be analyzed. The analysis is carried out on 104 Italian NUTS 3 regions observed over the time span 1995-2011. The results confirm that local knowledge is important, and suggest that the creation of new firms in Italy is associated to the exploitation of well established technological trajectories grounded on competences accumulated over time, rather than to the commercialization of brand new knowledge.
    Keywords: Knowledge Coherence, Variety, Cognitive Distance, Italy, Knowledge-Spillovers Theory of Entrepreneurship, New Firms, Recombinant Knowledge
    JEL: L26 M13 R11 O33
    Date: 2013–03
  7. By: Tripathi, Sabyasachi
    Abstract: The main objective of this paper is to analyze the recent past trends and patterns of urbanization, urban economic growth, and urban equity measured by urban poverty and inequality in India. In addition, it reviews the different urban development policies and programmes which are undertaken in different Plan Periods in India. The analysis shows that higher rate of urbanization is associated with higher economic growth, lower level of poverty and higher extent of inequality in urban India. Finally, the study suggests that Indian government needs to speed up the urbanization rate as it contributes higher share of national GDP by reducing urban poverty and inequality.
    Keywords: Urbanization, Economic Growth, Inequality, Poverty, Urban India.
    JEL: R11 R12 R58
    Date: 2013–03
  8. By: Tony Champion; Mike Coombes; Ian Gordon
    Abstract: In the urban resurgence accompanying the growth of the knowledge economy, second-order cities appear to be losing out to the principal city, especially where the latter is much larger and benefits from substantially greater agglomeration economies. The view that any city can make itself attractive to creative talent seems at odds with the idea of a country having just one 'escalator region' where the rate of career progression is much faster, especially for in-migrants. This paper takes the case of England, with its highly primate city-size distribution, and tests how its second- order cities (in size order, Birmingham, Manchester, Leeds, Newcastle, Bristol, Sheffield, Liverpool, Nottingham and Leicester) compare with London as human- capital escalators. The analysis is based on the ONS Longitudinal Study of linked census records, primarily for 1991-2001, and uses one key indicator of upward social mobility, the transition from White Collar Non-core to White Collar Core. For non- migrants, the transition rates for all the second-order cities are found to fall well short of London's. In only one case - Manchester - is the rate significantly higher than the average for other areas outside the Greater South East (GSE) and its performance is matched by the non-London part of the GSE. Those moving to the second-order cities during the decade experienced much stronger upward social mobility than their non-migrants. This 'migrant premium' was generally similar to that for London, suggesting that it results from people moving only after they have secured a better job. If so, second-order cities cannot rely on the speculative migration of talented people but need suitable jobs ready for them to access.
    Keywords: human-capital escalator, second-order cities, England, ONS Longitudinal Study, career progression, city region
    JEL: J24 J61 J62 R23
    Date: 2013–03
  9. By: Isabel Tecu
    Abstract: What explains the location of industrial innovation? Economists have traditionally attempted to answer this question by studying firm-external knowledge spillovers. This paper shows that firm-internal linkages between production and R&D play an equally important role. I estimate an R&D location choice model that predicts patents by a firm in a location from R&D productivity and costs. Focusing on large R&D-performing firms in the chemical industry, an average-sized plant raises the firm’s R&D productivity in the metropolitan area by about 2.5 times. The elasticity of R&D productivity with respect to the firm’s production workers is almost as large as the elasticity with respect to total patents in the MSA, while proximity to academic R&D has no significant effect on R&D productivity in this sample. Other manufacturing industries exhibit similar results. My results cast doubt on the frequently-held view that a country can divest itself of manufacturing and specialize in innovation alone.
    Date: 2013–03
  10. By: Lago-Peñas, Santiago; Prada, Albino; Vaquero, Alberto
    Abstract: The aim of this paper is to analyse cross-country differences in the degree of inter-regional redistribution achieved by means of taxes and expenditures in 21 European countries over the period 1995-2009. We rely on a standard approach based on the observation and comparison of both primary and disposable household income at regional scale. Once the redistributive effect in each country is quantified, we try to explain the drivers of cross-country time-series differences. According to our estimates, cross-national standard deviation is significant and much higher than time variation. Secondly, inter-regional redistribution is strongly and positively related to personal redistribution by means of taxes and social benefits in cash; and is negatively related to both the extent of regional disparities in primary income and to the degree of political and fiscal decentralization.
    Keywords: Inter-regional redistribution, regional fiscal imbalance, European Union
    JEL: H11 H23 H77
    Date: 2013–03–10
  11. By: Carolina Castaldi; Koen Frenken; Bart Los
    Abstract: We investigate how variety affects the innovation output of a region. Borrowing arguments from theories of recombinant innovation, we expect that related variety will enhance innovation as related technologies are more easily recombined into a new technology. However, we also expect that unrelated variety enhances technological breakthroughs, since radical innovation often stems from connecting previously unrelated technologies opening up whole new functionalities and applications. Using patent data for US states in the period 1977-1999 and associated citation data, we find evidence for both hypotheses. Our study thus sheds a new and critical light on the related-variety hypothesis in economic geography.
    Keywords: recombinant innovation, regional innovation, superstar patents, technological variety, evolutionary economic geography
    JEL: O31 R11
    Date: 2013–03
  12. By: Xesús Pereira López; André Carrascal Incera; Melchor Fernández Fernández (GAME-IDEGA, Universidade de Santiago de Compostela)
    Abstract: It is relatively common to use location quotients (LQ) in the elaboration of regional (or sub-national) input-output tables (IOT). In the application of this kind of methodology, there appear two simultaneous corrections of the intermediate consumption matrix (one by rows and another by columns). A typical formula for this purpose is the Flegg Location Quotient (FLQ). However, it presents some rigidity since it works only with a single parameter that affects the logarithmic smoothing of the output (employment or value added) weight of the regional totals. This applies the same treatment to all the possible estimations, essentially derived from the interindustry quotients (CILQ). The modified or augmented FLQ formula (AFLQ) uses the same condition, with the only difference that it includes a correction by buying sectors. In this paper, we present an alternative formulation for LQ characterized by a double- parameterization process with a potential smoothing function. Contrasting with the FLQ formula, this methodology is more flexible because it guarantees a specific treatment in each row and column. Finally, in order to show the applicability of the method, an estimation of the Spanish symmetric IOT for 2005 from the EA17 table is produced and subsequently contrasted with the corresponding Spanish IOT elaborated by Eurostat.
    Keywords: location quotients, regional economies, input-output tables
    JEL: C13 C67 R19
    Date: 2013–03

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