nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒09‒06
nine papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. The Impact of Trade Policy on Industry Concentration in Switzerland By Burghardt, Dirk
  2. Innovation and Growth in Regions with Specific Geographical Features By Juliana Dahl
  3. Start-up Complexity and the Thickness of Regional Input Markets By Dirk Christian Dohse; Andrea Vaona
  4. Regional Determinants of Establishments' Innovation Activities: A Multi-Level Approach By Bellmann, Lutz; Crimmann, Andreas; Evers, Katalin; Hujer, Reinhard
  5. Gibrat's law and the British Industrial Revolution By Alexander Klein; Tim Leunig
  6. The evolution of economic convergence in the European Union By Borsi, Mihály Tamás; Metiu, Norbert
  7. LM Tests of Spatial Dependence Based on Bootstrap Critical Values By Zhenlin Yang
  8. Análisis de Estructuras Espaciales Persistentes. Desempleo Departamental en Argentina. By Herrera Gómez, Marcos
  9. Rediscutindo a Delimitação das Regiões Metropolitanas no Brasil: Um Exercício a Partir dos Critérios da Década de 1970 By Maria Luisa G. Castello Branco; Rafael Henrique Moraes Pereira; Vanessa Gapriotti Nadalin

  1. By: Burghardt, Dirk
    Abstract: This paper studies the impact of trade policy on industry concentration. Based on the Swiss Business Census, concentration levels for all four-digit manufacturing industries in Switzerland are calculated. Then the effect of a bilateral reduction in technical barriers to trade with the European Union is estimated. Adopting a difference-in-differences approach, it turns out that concentration in affected industries with low R&D intensity increased significantly following the policy change. This supports the notion that fewer firms are able to survive as the toughness of price competition increases. The effect on industries with high R&D intensity is found to be insignificant.
    Keywords: Industry Concentration, Sunk Costs, R&D Expenses, Price Competition, Globalization, Trade Barriers, Natural Experiment, Plant-level Data
    JEL: F13 L10 L60
    Date: 2013–08
  2. By: Juliana Dahl
    Abstract: Since the year 2000, innovation and the path towards a “knowledge-based” economy have become prominent concepts in the European policy sphere. Although fostered by the goal of the innovationoriented Lisbon Strategy, it remains questionable in how far the situation of being the “most competitive economy” favours the diverse territories in the European Union. In this matter, very little is known about the ability to translate innovation into regional growth in territories with geographical disadvantages. The present paper discusses the intensified emphasis of the European policy approach towards innovation and its adequacy to the need of regions with unfavourable geographical features. This thorough discussion aims to shed some light on the issue of whether the EU’s twin goals for 2007-2013, to achieve global competitiveness and cohesion, are suitable for areas with geographical limitations
    Keywords: European Regional Development Fund, Innovation, Regional Policy, Specific Geographical Features
    JEL: O31
    Date: 2013–05
  3. By: Dirk Christian Dohse; Andrea Vaona
    Abstract: Although there is a large and rapidly growing literature on the determinants of regional variation in new firm formation, relatively little is known about the interrelation between the characteristics of start-up firms and urban structure. It is only recently that scholars of urban economics have suggested a theoretical link between the thickness of regional input markets and the complexity of feasible start-ups. The current paper classifies start-ups in different industry groups according to their complexity and analyzes the impact of regional input market thickness on the frequency of start-ups with different degrees of complexity. We find that thicker input markets do indeed foster more complex start-ups, but that some inputs are more important than others
    Keywords: Entrepreneurship, Start-up complexity, Thick markets, Regional analysis
    JEL: L26 D22 R12 M13 O31
    Date: 2013–06
  4. By: Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg); Crimmann, Andreas (Institute for Employment Research (IAB), Nuremberg); Evers, Katalin (Institute for Employment Research (IAB), Nuremberg); Hujer, Reinhard (Goethe University Frankfurt)
    Abstract: This paper analyses the determinants of different innovation types. Beside a wide range of firm characteristics also the effects of regional factors are estimated using three-level random effect logit models which account for the clustered and longitudinal structure of the data. The analyses contain three regional variables: the unemployment rate, the assessment of the region with reference to proximity to research and technology centres and universities and the rate of graduates in mathematics, informatics, natural sciences and technological sciences (MINT-graduates). The empirical basis is the IAB-Establishment Panel Survey 2006 to 2010. Process and radical innovations are significant affected by the unemployment rate and the share of MINT-graduates. The unemployment rate has also for some of the innovation combos a significant effect. The proportion of MINT-graduates is relevant for the probability of all 4 innovation types simultaneously.
    Keywords: determinants of innovation, regional effects, multilevel modelling
    JEL: D21 O30 R15
    Date: 2013–08
  5. By: Alexander Klein; Tim Leunig
    Abstract: This paper examines Gibrat’s law in England and Wales between 1801 and 1911 using a unique data set covering the entire settlement size distribution. We find that Gibrat’s law broadly holds even in the face of population doubling every fifty years, an industrial and transport trevolution, and the absence of zoning laws to constrain growth. The result is strongest for the later period, and in counties most affected by the industrial revolution. The exception were villages in areas bypassed by the industrial revolution. We argue that agglomeration externalities balanced urban disamenities such as commuting costs and poor living conditions to ensure steady growth of many places, rather than exceptional growth of few.
    Keywords: Gibrat’s law; city-size distribution; industrial revolution
    JEL: N93 R12
    Date: 2013–08
  6. By: Borsi, Mihály Tamás; Metiu, Norbert
    Abstract: This paper investigates economic convergence in real income per capita between 27 European Union countries. We employ a non-linear latent factor framework to study transitional behavior among economies between 1970 and 2010. Our results offer important insights on the economic catch-up exhibited by the new EU members in light of the institutional changes and macroeconomic adjustment processes undertaken over the last 40 years. Our main findings suggest no overall real income per capita convergence in the EU, however, we identify subgroups that converge to different steady states using an iterative testing procedure. Regional linkages play a significant role in determining the formation of convergence clubs. The empirical evidence suggests a clear separation between the new and old EU member states in the long run. --
    Keywords: Club convergence,Dynamic factor model,Economic integration,Growth,New member states
    JEL: C33 O47
    Date: 2013
  7. By: Zhenlin Yang (School of Economics, Singapore Management University)
    Abstract: To test the existence of spatial dependence in an econometric model, a convenient test is the Lagrange Multiplier (LM) test. However, evidence shows that, infinite samples, the LM test referring to asymptotic critical values may suffer from the problems of size distortion and low power, which become worse with a denser spatial weight matrix. In this paper, residual-based bootstrap methods are introduced for asymptotically refined approximations to the finite sample critical values of the LM statistics. Conditions for their validity are clearly laid out and formal justifications are given in general, and in details under several popular spatial LM tests using Edgeworth expansions. Monte Carlo results show that when the conditions are not fully met, bootstrap may lead to unstable critical values that change significantly with the alternative, whereas when all conditions are met, bootstrap critical values are very stable, approximate much better the finite sample critical values than those based on asymptotics, and lead to significantly improved size and power. The methods are further demonstrated using more general spatial LM tests, in connection with local misspecification and unknown heteroskedasticity.
    Keywords: Asymptotic refinements; Bootstrap; Edgeworth expansion; LM Tests; Spatial dependence; Size; Power; Local misspecification; heteroskedasticity; Wild bootstrap.
    JEL: C12 C15 C18 C21
    Date: 2013–05
  8. By: Herrera Gómez, Marcos
    Abstract: This paper presents a collection of spatial econometrics tools to detect global and local spatial dependence. These tools are used to analyze the spatial structure of the unemployment rate in Argentina in Census 2001 and 2010. Detailed study enables identification and comparison of persistent spatial structures in the departamental distribution of unemployment.
    Keywords: Spatial Autocorrelation, LISA, Getis-Ord Test, Symbolic Entropy, Unemployment
    JEL: C12 C21 J64
    Date: 2013–08
  9. By: Maria Luisa G. Castello Branco; Rafael Henrique Moraes Pereira; Vanessa Gapriotti Nadalin
    Abstract: Desde a Constituição Federal de 1988 (CF/1988) os governos estaduais assumiram a atribuição de instituir suas próprias regiões metropolitanas (RMs). Em geral, há pouca informação acerca dos critérios utilizados para justificar a delimitação dos municípios pertencentes ao perímetro metropolitano dessas regiões. Como consequência, não é possível avaliar os prós e contras das metodologias utilizadas. Além disso, ficam comprometidas as análises comparativas acerca do desempenho de indicadores sociais e econômicos nessas áreas. A discussão de uma metodologia única para delimitação de RMs no Brasil vem num momento oportuno, uma vez que, no Congresso Nacional, está tramitando um projeto de lei sobre este tema (conhecido como Estatuto da Metrópole). Visando contribuir neste debate, este estudo simula quais seriam as RMs estimadas para o Brasil no ano de 2010 caso fosse aplicado um único conjunto de critérios, seguindo-se uma mesma metodologia para todo o país. Neste exercício, foram adotados como referência os mesmos critérios utilizados na década de 1970 para definição das nove primeiras RMs brasileiras com pequenas adaptações. Os resultados da simulação são comparados àquelas RMs estaduais reconhecidas oficialmente na data do Censo Demográfico 2010 e àquelas primeiras RMs oficializadas na década de 1970. Em comparação às RMs estaduais oficiais de 2010, os resultados obtidos apresentam um “Brasil metropolitano” composto por i) um menor número de RMs; ii) englobando em torno da metade do número de municípios; iii) com maior nível de integração por deslocamentos casa-trabalho; iv) uma área territorial cerca de três vezes mais compacta e mais densa; e ainda v) com mínimas diferenças em termos de porte populacional e econômico. Since the National Constitution of 1988, state governments are responsible for defining their own metropolitan areas in Brazil. However, the criteria for boundaries delimitation are not clearly defined as a rule. As a consequence, it is not possible to weigh the pros and cons of the employed methodologies. Furthermore, comparative analysis on the performance of social and economic indicators in these metropolitan areas can . be compromised as result of using multiple methodologies for defining territorial limits. The discussion of this issue could not be more timely, as the National Congress is currently debating a bill (aka Statute of the Metropolis) that proposes one single method for defining national metropolitan areas and its boundaries. To contribute to this debate, we estimate in this paper the metropolitan areas Brazil would have in 2010 by applying to the whole country the same criteria and following one single method. For this purpose, we have adopted the same method and criteria originally used for the definition of the first metropolitan areas of the country in the 1970’s, with minor adjustments. The obtained results are then compared with the official metropolitan areas showing rather different figures. Compared with official areas, our estimates show a metropolitan Brazil i) comprising a smaller number of metropolitan areas; ii) covering about half the number of municipalities; iii) with stronger commuting ties; iv) occupying a land area about three times more compact and dense; and yet v) with minor differences in terms of population size and GDP.
    Date: 2013–08

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