nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒06‒16
ten papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Services sectors' concentration: The European Union, Greece, and the New Economic Geography By Krenz, Astrid
  2. The Concurrent Impact of Cultural, Political, and Spatial Distances on International Mergers and Acquisitions By MC. Di Guardo; E. Marrocu; R. Paci
  3. Accessibility: a useful analytical and empirical tool in spatial economics – experiences from Sweden By Karlsson, Charlie; Gråsjö, Urban
  4. The Neighborhood or the Region? Untangling the density-productivity relationship using geocoded data By Larsson, Johan P.
  5. The Spatial Diffusion of Regional Housing Prices across U.S. States By Ryan Brady
  6. Town and city jobs: Your job is different in another location By Suzanne Kok
  7. Economic Effects of Domestic and Neighbouring Countries' Cultural Diversity By Erkan Goeren
  8. Good Firms, Worker Flows and Productivity By Serafinelli, Michel
  9. Fiscal decentralization and regional disparities: the importance of good governance By Leonel Muinelo-Gallo; Andreas P. Kyriacou; Oriol Roca-Sagalés
  10. Determinants of Structural Change in the agricultural sector: An Empirical Analysis of Farm Exit in Tuscany By Landi, Chiara; Stefani, Gianluca; Rocchi, Benedetto; Lombardi, Ginevra V.; Giampaolo, Sabina

  1. By: Krenz, Astrid
    Abstract: The aim of this article is to investigate services sectors' concentration in the European Union based on employment data and to disentangle the sector-specific developments and influential factors over time. We find that only the financial intermediation, retail trade and water transport sectors are subject to an increasing level of concentration over time. Moreover, we can detect a strong specialization tendency in the sectors of tourism and public administration for the Greek economy. Implementing a two-way fixed effects model, we find that knowledge spillovers as well as externalities arising from technological similarities appear to be highly significant in explaining services' concentration patterns for the European Union. Technological differences as a reason for services' concentration only appear to have been important in the period prior to the Single European Market Enactment. Further evidence is found for the relevance of factor intensity in explaining concentration of non-market services. --
    Keywords: concentration,services,European Union,knowledge spillovers,technological similarities
    JEL: F14 L80 R12
    Date: 2013
  2. By: MC. Di Guardo; E. Marrocu; R. Paci
    Abstract: The paper explores the concurrent effects of cultural, political, and spatial distances on M&A flows occurring between any two countries belonging to the whole European Union (27 States) or to the European Neighbors group (16 States) over the period 2000-2011 . By employing zero-inflated negative binomial specifications, entailing both a binary and count process, we adequately model the two different mechanisms which may generate zero observations in the cross-border bilateral deals. Zeros may be due to either the lack of any transactions or unsuccessful negotiations. We find robust evidence that the multi-dimensional distance between two countries negatively affects the probability that they will engage in M&A deals, while the recurrence rate of these deals is positively related to population, gross domestic product, and technological capital and negatively related to geographical distance.
    Keywords: european neighboring countries, Cross-border M&As, cultural and political distances, geographical distance, European Union, zero-inflated models
    JEL: G34 F23 C31
    Date: 2013
  3. By: Karlsson, Charlie (Jönköping International Business School and University West); Gråsjö, Urban (University West)
    Abstract: Accessibility has for many years been a widely used tool in transportation research. Many definitions have been suggested and researchers have constructed numerous mathematical formulations to measure its value to be able to evaluate the relationships between the nature of the transport systems and the patterns of land use. Such correlations have been used especially in assessing existing transport systems and forecasting their performance to provide decision-makers with ideas about the need for investments in the transport systems. However, accessibility measures can be regarded as the spatial counterparts of discounting. The measures represent the spatial distribution of economic agents and their activities in a simple way that imposes a very clear structure upon the relationship between these agents and their activities and their environment. Various frictional effects arising from geographical distance between economic agents determine their interaction options, i.e., their options to trade, to cooperate, to learn, to commute, etc. Observing that the time sensitivities of the economic agents vary between different spatial scales (and between different economic activities) we may impose a spatial structure (e.g. local, intraregional, interregional and international), which offers opportunities to define variables in such a way that spatial dependencies can be accommodated. These newly defined variables can then be used in empirical explanations of various spatial phenomena, such as patent output, new firm formation, the emergence of new export products, and economic growth in different spatial units. We will in this paper against this background show that accessibility is an underused analytical and empirical tool in regional science with an underestimated potential. The paper contains several empirical examples where the accessibility concept has been used in previous research. These empirical studies are carried out in a Swedish context and show the applicability of the accessibility method. However, it is a general method and there is no reason why the method does not apply also for other countries.
    Keywords: Accessibility; spatial models; spatial dependence; local labour markets; spillover effects; regional development
    JEL: C21 R11 R12 R23 R58
    Date: 2013–06–05
  4. By: Larsson, Johan P. (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School.)
    Abstract: I analyze the effects of sub-city level density of economic activity on worker productivity. Using a geocoded dataset on employment and wages in the city areas of Sweden, the analysis is based on squares representing “neighborhoods” (0.0625 km2), “districts” (1 km2), and “agglomerations” (10 km2). The wage-density elasticity depends crucially on spatial resolution, with the elasticity being highest in neighborhood squares. The results are consistent with i) the existence of a localized density spillover effect and ii) quite sharp attenuation of human capital spillovers. An implication of the findings is that if the data source is not sufficiently disaggregated, analyses of the density-productivity link risk understating the benefits of working in dense parts of regions, such as the central business districts.
    Keywords: Density; productivity; spatial dependence; geo-coded data; neighborhood effects; human capital; agglomeration economies
    JEL: J24 J31 R12
    Date: 2013–06–12
  5. By: Ryan Brady (United States Naval Academy)
    Abstract: In this paper I estimate the spatial diffusion of housing prices across U.S. states over a period from 1975 to 2011, showing how long and to what magnitude state-level housing prices are affected by a price shock emanating from surrounding states. I capture the spatial diffusion of regional housing prices with impulse response functions estimated directly from a single equation spatial autoregressive model. In addition, I compare and contrast spatial impulse response estimates across sub-regions and then over sub-periods. Results show that for the 1975 to 2011 period spatial diffusion of housing prices is statistically significant and persistent across states. Moreover, sub-region estimation shows the spatial diffusion is persistent in the four Census regions for the United States. Sub-period estimation, too, suggests the magnitude and persistence of spatial diffusion may be more pronounced after 1999 than before.
    Date: 2013–06
  6. By: Suzanne Kok
    Abstract: This CPB Discussion Paper shows that a job contains a different task package in a large city than the same job in a small city. We set out a theoretical model of the division of labour across cities, which shows that both the division of labour and the skill demand increase with city size. Most datasets hinder an empirical analysis of such a model as they lack spatial variation in job content. Using individual German task data, we are able to empirically estimate our model and analyse spatial variations in task content of jobs. The estimations support the predictions of the model: jobs in large cities consist of other task packages than the same jobs in small cities. Workers in large cities focus more on their core tasks and perform fewer subtasks than workers in small cities. Jobs demand more cognitive skills when they are performed in large cities. This spatial variation in job contents likely bias regional wage equations.
    JEL: J24 J44 R23
    Date: 2013–06
  7. By: Erkan Goeren (University of Oldenburg - Department of Economics and Statistics)
    Abstract: This paper investigates the economic growth impact of cultural diversity, both domestically and in neighbouring countries, in a balanced panel of 94 countries covering the period 1970 to 2004. The measures of cultural diversity used in this article were derived from a recently developed computer algorithm intended primarily to measure linguistic distances in an automated fashion. The empirical analysis suggests that the degree of cultural diversity in contiguous neighbouring countries has substantial positive effects on domestic per capita income growth, even controlling for a broad set of regional, institutional, religious and other proximate factors of economic growth. The conclusion is that culturally homogeneous countries gain a strategic advantage over their culturally diverse neighbours.
    Keywords: cultural diversity, ethnic diversity, economic growth
    JEL: O11 O5
    Date: 2013–04
  8. By: Serafinelli, Michel
    Abstract: I present direct evidence on the role of firm-to-firm labor mobility in enhancing the productivity of firms located near highly productive firms. Using matched employer-employee and balance sheet data for the Veneto region of Italy, I identify a set of high-wage firms (HWF) and show they are more productive than other firms. I then show that hiring a worker with HWF experience increases the productivity of other (non-HWF) firms. A simulation indicates that worker flows explain 10-15 percent of the productivity gains experienced by other firms when HWFs in the same industry are added to a local labor market.
    Keywords: productivity, agglomeration advantages, linked employer-employee data, labor mobility.
    JEL: J24 J31 J61 R2 R23
    Date: 2013–06–09
  9. By: Leonel Muinelo-Gallo (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Andreas P. Kyriacou (Universitat de Girona (España). Departament d’Economia); Oriol Roca-Sagalés (Universitat Autònoma de Barcelona (España). Departament d’Economia Aplicada)
    Abstract: In this paper we consider how government quality mediates the relationship between fiscal decentralization and regional disparities. Previous work has argued that fiscal decentralization has the potential to reduce income difference across regions but that this potential may not be realized because of governance problems associated with subnational authorities. Our empirical evidence based on a sample of 24 OECD countries over the period 1984 to 2006 lends a measure of support to this idea. We find that fiscal decentralization promotes regional convergence in high government quality settings but, worryingly, it leads to wider regional disparities in countries with poor governance. Because most poor countries are plagued with governance problems, this would caution against fiscal decentralization with a view to reducing regional disparities in these countries.
    Keywords: fiscal decentralization, regional disparities, government quality
    JEL: D73 H71 H73
    Date: 2013–03
  10. By: Landi, Chiara; Stefani, Gianluca; Rocchi, Benedetto; Lombardi, Ginevra V.; Giampaolo, Sabina
    Abstract: In the last decade Italy has experienced a consistent decline in the number of agricultural firms. Beyond the new definition of agricultural firms, this structural change of farms is characterized by exit of small farms and increasing farm size. This paper aims at analyzing the determinants of the net exit of Tuscan farms from the market during the period 2000 - 2007 both at the farm and the territorial level. The study combines data from two different sources: the 2000 census of Agriculture and three waves (2003 - 2005 - 2007) of the European “Farm and Structure Surveys” (FSS) realized in Italy by ISTAT (the National Institute of Statistics) . The resulting sample of Tuscan farms amounts approximately to 3000 agricultural firms. The exit probability of Tuscan farms from the market is estimated trough a bayesian hierarchical probit model where the group level coefficients correspond to the Local Labour Systems (LLS) i.e. a set of neighboring municipalities in which people live and work. Several variables related to farm, family, and geographical characteristics of the area are used as independent variables to investigate their net effect on the decision to exit. Results show that, among others, farm size, age of the farm operator, type of the holding have played a key role on exit. On one hand, higher farm size and professional nature of the activity lower the probability of exit. On the other hand, exit probabilities are higher for farms in which the farm operator is older nearer to retirement and without young members in his family that can replace him. Likelihood of exit is higher in areas (LLS) characterized by higher population density as the land use competition and possibly the richer labour market associated to these areas increases the exit behaviour. However given the same population density, exit probability is lower in “urban” LLS perhaps because of the proximity to remunerative market outlets for farm products.
    Keywords: farm exit, hierarchical probit model, farms and territorial data, Agricultural and Food Policy, Farm Management, Q12, Q18, C5, R14,
    Date: 2013–06

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