|
on Economic Geography |
| By: | Emmanouil Tranos (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | This paper studies the impact of physical distance and different relational proximity types on the formation of the Internet infrastructure. Although there is some anecdotal evidence on the 'end of geography' effect of the Internet, the relationship between physical space and the Internet has not been yet scrutinized. In addition, owing to the network nature of the Internet, the structure of the Internet infrastructure (the cyber-place) cannot be approached in a unidimensional way. Our paper builds upon recent studies in economic geography and relational proximities, and aims to study whether physical distance survives in virtual geography even after controlling for relational proximities. In order to do so, a unique and extensive database with geo-coded IP links is utilized. Based on this, a spatial interaction model with panel data specifications is constructed to study the impact of different types of proximity on the formation of cyber-place. The above analysis is framed by a complex network analysis exercise, which enhances our understanding of the complexity of the Internet infrastructure from a spatial network perspective. Our results indicate that physical distance, but also different relational proximities, have a significant impact on the intensity of the Internet infrastructure, highlighting the spatiality of the Internet. |
| Keywords: | death of distance, Internet geography, Internet infrastructure, distance, proximities, spatial interaction models |
| JEL: | C23 H54 L96 |
| Date: | 2012–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012066&r=geo |
| By: | Todd M. Gabe; Jaison R. Abel |
| Abstract: | This paper provides an empirical analysis of the extent to which people in different occupations locate near one another, or coagglomerate. We construct pairwise Ellison-Glaeser coagglomeration indices for U.S. occupations and use these measures to investigate the factors influencing the geographic concentration of occupations. The analysis is conducted separately at the metropolitan area and state levels of geography. Empirical results reveal that occupations with similar knowledge requirements tend to coagglomerate and that the importance of this shared knowledge is larger in metropolitan areas than in states. These findings are robust to instrumental variables estimation that relies on an instrument set characterizing the means by which people typically acquire knowledge. An extension to the main analysis finds that, when we focus on metropolitan areas, the largest effects on coagglomeration are due to shared knowledge about the subjects of engineering and technology, arts and humanities, manufacturing and production, and mathematics and science. |
| Keywords: | Industrial location ; Professional employees ; Metropolitan areas - Statistics ; Information theory ; Labor market ; Geography |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:612&r=geo |
| By: | Luis Cabral; Zhu Wang; Daniel Yi Xu |
| Abstract: | Taking the early U.S. automobile industry as an example, we evaluate four competing hypotheses on regional industry agglomeration: intra-industry local externalities, inter-industry local externalities, employee spinouts, and location fixed-effects. Our findings suggest that inter-industry spillovers, particularly the development of the carriage and wagon industry, play an important role. Spinouts play a secondary role and only contribute to agglomeration at later stages of industry evolution. The presence of other firms in the same industry has a negligible (or maybe even negative) effect on agglomeration. Finally, location fixed-effects account for some agglomeration, though to a lesser extent than inter-industry spillovers and spinouts. |
| Keywords: | Economic growth ; Regional economics ; Automobile industry and trade |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedrwp:13-04&r=geo |
| By: | Frank G. van Oort (Utrecht University); Martijn J. Burger (Erasmus University Rotterdam); Joris Knoben (Tilburg University); Otto Raspe (Netherlands Environmental Assessment Agency) |
| Abstract: | See also the publication in <A href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6419.2012.00723.x/abstract">'Journal of Economic Surveys'</A>, 26(3), 468-91.<p> Empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions. Both localization and urbanization economies are hypothesized to foster agglomeration and growth, but recent meta-analyses of this burgeoning body of empirical research show that the results are ambiguous. Recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space, aggregation, growth definitions, and the functional form of the models applied. Alternatively, in this paper, we argue that ambiguity may be due to a lack of research on firm-level performance in agglomerations. This research is necessary because the theories that underlie agglomeration economies are microeconomic in nature. Hierarchical or multilevel modeling, which allows micro levels and macro levels to be modeled simultaneously, is becoming an increasingly common practice in the social sciences. As illustrated by detailed Dutch data on firm-level productivity, employment growth and firm survival, we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration-firm performance relationship and for addressing spatial, sectoral and cross-level heterogeneity. |
| Keywords: | agglomeration economies, micro-macro link, multilevel analysis, productivity |
| JEL: | C21 O18 R1 |
| Date: | 2012–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012014&r=geo |
| By: | Pim Heijnen (University of Groningen); Marco A. Haan (University of Groningen); Adriaan R. Soetevent (University of Amsterdam) |
| Abstract: | We develop a method to screen for local cartels. We first test whether there is statistical evidence of clustering of outlets that score high on some characteristic that is consistent with collusive behavior. If so, we determine in a second step the most suspicious regions where further antitrust investigation would be warranted. We apply our method to build a variance screen for the Dutch gasoline market. |
| Keywords: | collusion, variance screen, spatial statistics, K-function |
| JEL: | C11 D40 L12 L41 |
| Date: | 2012–06–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012058&r=geo |
| By: | Maureen B.M. Lankhuizen (VU University Amsterdam); Thomas de Graaff (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam, and Ecorys NEI) |
| Abstract: | We empirically examine the heterogeneity in the effects of multiple dimensions of distance on trade across detailed product groups. Using finite mixture modeling on bilateral trade data at the 3-digit SITC level, we endogenously group product categories into an, a priori unknown, number of segments based on estimated coefficients of multiple dimensions of distance in the gravity equation. We find that institutional distance, whether countries belong to the same trade block and especially geographical distance are crucial and distinct factors to classify commodities in homogeneous groups. |
| Keywords: | bilateral trade, gravity models, distance, institutions, product heterogeneity, finite mixture modeling |
| JEL: | F14 F21 F23 |
| Date: | 2012–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012065&r=geo |
| By: | Hans Koster (VU University Amsterdam); Jos N. van Ommeren (VU University Amsterdam); Piet Rietveld (VU University Amsterdam) |
| Abstract: | This paper examines the effects of specialisation (within-sector clustering) and diversity (between-sector clustering) on business services profitability and location choice. We apply a semiparametric Poisson sorting model allowing for firm-specific effects. We find that for most firms, profitability of business services firms is substantially higher close to specialised clusters of business services firms. A standard deviation increase in business services specialisation leads to on average a 40 percent increase in the probability that a business services firm locates there, supporting theories of Marshall, Arrow and Romer. It is also profitable for most business services firms to locate near a group of firms that belong to the same sector, not necessarily business services firms, so diversity is negatively related to location decisions. Almost all firms either benefit from within-sector clustering or between-sector clustering. Within-sector clusters are particularly profitable for large mature firms, whereas between-sector clusters are relatively more profitable for smaller innovative firms. |
| Keywords: | Sorting; Agglomeration Economies; Specialisation; Diversity; Heterogeneity; Semiparametric Estimation |
| JEL: | R12 R14 R39 |
| Date: | 2011–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2011085&r=geo |
| By: | Emmanouil Tranos (VU University Amsterdam); Karima Kourtit (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | The majority of cities in our world is not only connected through conventional physical infrastructure, but increasingly through modern digital infrastructure. This paper aims to test whether digital connectivity leads to other linkage patterns among world cities than traditional infrastructure. Using a generalized spatial interaction model, this paper shows that geography (and distance) still matters for an extensive set of world cities analysed in the present study. With a view to the rapidly rising urbanization in many regions of our world, the attention is next focused on the emerging large cities in China in order to test the relevance of distance frictions - next to a broad set of other important explanatory variables - for digital connectivity in this country. Various interesting results are found regarding digital connectivity within the Chinese urban system, while also here geography appears to play an important role. |
| Keywords: | Digital Networks, Internet, Connectivity, World Cities, Death of Distance, Centrality, Small-World Networks, Clustering, Gravity Model |
| JEL: | O18 H54 P25 |
| Date: | 2012–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012124&r=geo |
| By: | Agovino, Massimiliano |
| Abstract: | The purpose of this study is to examine whether the performance of regions in providing employment of disabled people according to Law 68/99 can be affected by the performance of neighbouring regions. Hence, we propose a two-step analysis focusing on the Italian regions for the years 2000-2009. In the first step, we verify by means of the Stochastic Frontier Approach that the regions of Central and Northern Italy are more efficient in the matching process between demand and supply of jobs for disabled people than the regions of Southern Italy. Then, the efficiency results are analyzed using a Markov Spatial Transition Matrix in order to provide insights into the transitions of regions between efficiency levels, taking their local context into account. The results of this analysis show that good neighbors are important in promoting the improvement of the performance of the regions. However, the effects produced by bad neighbors should not be underestimated, especially when they are concentrated in an area of the country and have a time-space persistence. The effect of a persistent dualism on the performance of the regions with respect to the application of Law 68/99 is a problem that must be seriously considered by policy makers; especially when the regions with a low efficiency score are surrounded by neighbors with poor efficiency score and show an unhealthy poorly performing labour market. |
| Keywords: | Disabled People, Public Policy, Non-Labour Market Discrimination, Stochastic Frontier Approach, Spatial Markov Chain. |
| JEL: | C23 C61 J14 J48 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47038&r=geo |
| 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: | D72 D82 R12 |
| Date: | 2013–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47002&r=geo |
| By: | Jessie Bakens (VU University Amsterdam); Peter Mulder (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | This paper identifies the role of cultural diversity in explaining spatial disparities in wages and housing prices across Dutch cities, using unique individual panel data of home owners. We distinguish between the effects of interactions-based productivity, consumption amenities and sorting of heterogeneous home owners while controlling for interactions between the labor and housing market. We find that an increase in the cultural diversity of the population positively impacts equilibrium wages and housing prices, particularly in the largest and most densely populated cities. This result is largely driven by spatial sorting of individuals in both the labor and housing market. After controlling for home owner heterogeneity we find that increasing cultural diversity no longer impacts local labor markets and negatively impacts local housing markets. The latter result is likely to be driven by a negative causal effect of increased cultural diversity on neighb orhood quality that outweighs a positive effect of increased cultural diversity in consumption goods. |
| Keywords: | cultural diversity, immigrants, local amenities, sorting, housing prices, productivity |
| JEL: | J31 R21 R23 R31 |
| Date: | 2012–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012024&r=geo |
| By: | Emmanouil Tranos (VU University Amsterdam); Masood Gheasi (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | Migration has become a prominent research theme in geography and regional science and it has been approached from various methodological angles. Nonetheless, a common missing element in most migration studies is the lack of awareness of the overall network topology, which characterizes migration flows. Although gravity models focus on spatial interaction - in this case migration - between pairs of origins and destinations, they do not provide insights into the topology of a migration network. In the present paper, we will employ network analysis to address such systemic research questions, in particular: How centralized or dispersed are migration flows and how does this structure evolve over time? And how is migration activity clustered between specific countries, and if so, do such patterns change over time? Going a step further than exploratory network analysis, this paper estimates international migration models for OECD countries based on a dual ap proach: gravity models estimated using conventional econometric approaches such as panel data regressions as well as network-based regression techniques such as MRQAP. The empirical results reveal not only the determinants of international migration among OECD countries, but also the value of blending network analysis with more conventional analytic methods. |
| Keywords: | immigration, gravity model, complex networks, community detection, MRQAP |
| JEL: | F22 O15 D85 |
| Date: | 2012–11–16 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012123&r=geo |
| By: | Masagus M. Ridhwan (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam); Piet Rietveld (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam) |
| Abstract: | This paper explores the determinants of regional differences in interest rates based on a simple theoretical model of loan pricing. The model demonstrates how risks, costs, market concentration and scale economies jointly determine the bank's interest rates. Using recent data of the Indonesian local credit markets, we find that regional interest rate variations are positive and significantly affected by the banks' risk factor, the operating costs, and market concentration. Scale economies negatively affect the interest rates. These findings help to explain geographical segmentation in loan markets. |
| Keywords: | regional capital mobility, loan pricing, interest rates, Indonesia |
| JEL: | R51 E43 C33 |
| Date: | 2012–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012073&r=geo |
| By: | Jason M. Lindo |
| Abstract: | This paper considers the relationship between local economic conditions and health with a focus on different approaches to geographic aggregation. After reviewing the tradeoffs associated with more- and less-disaggregated analyses–including an investigation of the migratory response to changing economic conditions–I update earlier state-level analyses of mortality and infant health and then consider how the estimated effects vary when the analysis is conducted at differing levels of geographic aggregation. This analysis reveals that more-disaggregated analyses severely understate the extent to which downturns are associated with improved health. Further investigation reveals that county economic conditions have an independent effect on mortality but that state and regional economic conditions are stronger predictors. I also leverage county-level data to explore heterogeneity in the link between county economic conditions and health across states, demonstrating that local downturns lead to the greatest improvements in health in low-income states. |
| JEL: | E32 I10 J20 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19042&r=geo |
| By: | José da Silva Costa (Faculdade de Economia, Universidade do Porto.); Armindo Cravalho (Faculdade de Economia, Universidade do Porto.) |
| Abstract: | In this paper we gather empirical evidence on the existence of strategic interaction among Portuguese municipal executives when they set rates of property tax and in particular if we are in the presence of yardstick competition. For that purpose, we adopted the assumption of geographic interaction among Portuguese municipalities when setting rates of property tax. We have estimated, for evaluated and non-evaluated urban property, spatial lag models with two spatial dependency regimes (municipalities with and without a solid majority) and cross-section fixed effects coefficients. The results provide strong empirical evidence on the existence of strategic interaction among Portuguese municipalities when setting rates of municipal taxes and on the yardstick hypothesis. |
| Keywords: | Yarstick competition; Local Governments; Portugal. |
| JEL: | H71 H73 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:495&r=geo |
| By: | Leah Platt Boustan; Devin Bunten; Owen Hearey |
| Abstract: | This handbook chapter seeks to document the economic forces that led the US to become an urban nation over its two hundred year history. We show that the urban wage premium in the US was remarkably stable over the past two centuries, ranging between 15 and 40 percent, while the rent premium was more variable. The urban wage premium rose through the mid-nineteenth century as new manufacturing technologies enhanced urban productivity; then fell from 1880 to 1940 (especially through 1915) as investments in public health infrastructure improved the urban quality of life; and finally rose sharply after 1980, coinciding with the skill- (and apparently also urban-) biased technological change of the computer revolution. The second half of the chapter focuses instead on the location of workers and firms within metropolitan areas. Over the twentieth century, both households and employment have relocated from the central city to the suburban ring. The two forces emphasized in the monocentric city model, rising incomes and falling commuting costs, can explain much of this pattern, while urban crime and racial diversity also played a role. |
| JEL: | N91 N92 R0 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19041&r=geo |
| By: | Martijn J. Burger (Erasmus University Rotterdam); Bert van der Knaap (Erasmus University Rotterdam); Ronald S. Wall (Institute for Housing and Urban Studies, Erasmus University Rotterdam) |
| Abstract: | In the modern economy, cities are assumed to be in fierce competition over attracting foreign investments in leading sectors of the world economy. Despite the rich theoretical discourse on these 'wars', it remains unclear which territories are competing with each other over which types of investments Combining insights from international economics, international business, and urban systems literature, we develop an indicator to measure revealed competition between territories for investments based on the overlap of investment portfolios of regions. Taking competition for greenfield investments between European regions as a test subject, we identify competitive market segments, derive the competitive threat a region faces from other regions, the competitive threat regions pose to other regions, and the most important market segments in which regions compete. We show that European regions with similar locational endowments pose a fiercer competitive thre at to one another. In addition, regions that are sufficiently large and distinctive, face the smallest average competitive threat from all other regions. |
| Keywords: | territorial competition, greenfield investments, Europe |
| JEL: | R12 F21 H70 |
| Date: | 2012–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012063&r=geo |
| By: | Humphreys, Brad (University of Alberta, Department of Economics); Zhou, Li (University of Alberta, Department of Economics) |
| Abstract: | We develop a monopolistic competition model of urban service consumption and production that includes spatial structure and property values. The model shows that the introduction of a new professional sports facility and team generates agglomeration effects that change the mix of services and property values, and increases local welfare, part of which is transferred to the team as subsidies for the construction of the facility. The distributional consequences of the new facility and the implications of property tax based financing for the subsidy are analyzed. |
| Keywords: | agglomeration effects; sports facilities; subsidies |
| JEL: | H71 L83 R13 R58 |
| Date: | 2013–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2013_004&r=geo |
| By: | Randall K. Filer; Dragana Stanisic |
| Abstract: | The current literature shows a significant negative impact of terrorism on countries' economies. We explore this relationship in more detail. Using an unbalanced panel of over 160 countries for up to 25 years and the Global Terrorism Database (GTD) we show a decrease in FDI as a consequence of terrorism. We also find evidence that FDI flows are more sensitive to terrorism than either portfolio investments or external debt flows. Finally, we test the hypothesis that terrorism has negative spill-over effects on FDI flows into neighboring countries and find evidence that cultural but not geographical closeness matters. |
| Keywords: | capital flow; terrorism; FDI; spill-over effect; |
| JEL: | D74 H56 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp480&r=geo |
| By: | Roos K. Andadari (Satya Wacana Christian University); Henri L.F. de Groot (VU University Amsterdam); Piet Rietveld (VU University Amsterdam) |
| Abstract: | This paper exploits micro firm level data to examine the impact of spatial clustering and links to foreign buyer networks on firm performance in the wood furniture industry in Central Java, Indonesia. The analysis is based on an annual manufacturing survey. We identify the impact of specialization of the cluster, diversification, and links to foreign buyer networks. For this purpose, a production function framework is developed. The results lend support to the view that clustering of large and medium scale specialized firms improves firm performance, while clustering of small scale specialized firms and clustering of diverse firms are not conducive to firm performance. We also find a clear positive association between involvement in exporting activities and firm performance. |
| Keywords: | Productivity, Externalities, Wood Furniture Industry, Indonesia |
| JEL: | D20 R11 R32 |
| Date: | 2012–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:2012072&r=geo |