nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒10‒18
thirteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Geography and social networks. Modelling the effects of territorial borders on policy networks By SOHN Christophe; CHRISTOPOULOS Dimitris; KOSKINEN Johan
  2. Regional Integration and Firm Location Choices: A Long Run Approach to the Cork Industry in the Iberian Peninsula By Francisco Parejo; Amélia Branco; João Carlos Lopes; José Rangel Preciado
  3. Cultural Diversity, Cities and Innovation: firm Effects or City Effects? By Neil Lee
  4. Neighbors and the Evolution of the Comparative Advantage of Nations: Evidence of International Knowledge Diffusion? By Bahar, Dany; Hausmann, Ricardo; Hidalgo, Cesar A.
  5. The neglected heterogeneity of spatial agglomeration and co-location patterns of creative employment: evidence from Portugal By Sara Santos Cruz; Aurora A.C. Teixeira
  6. Location Decisions in a Natural Resource Model of Cournot Competition By Ricardo Biscaia; Paula Sarmento
  7. The Geography of Patenting In India: Patterns and Determinants By Pradhan, Jaya Prakash
  8. The relevance of commuting zones for regional spending efficiency By António Afonso; Ana Venâncio
  9. Development at the border: policies and national integration in Côte d’Ivoire and its neighbors By Cogneau, Denis; Mesplé-Somps, Sandrine; Spielvogel, Gilles
  10. Location of logistics companies: A stated preference study to disentangle the impact of accessibility By Verhetsel, Ann; Kessels, Roselinde; Blomme, Nele; Cant, Jeroen; Goos, Peter
  11. The East-West gradient in spatial population development within Germany: temporary GDR legacy vs. longstanding spatial disparities By Sebastian Klüsener; Emilio Zagheni
  12. Technological spillovers and industrial growth in Chinese regions By Wang, Lili; Meijers, Huub; Szirmai, Eddy
  13. Typology of the French regional development: revealing the refugee/Schumpeter effects in new-firms startups By Rafik Abdesselam; Jean Bonnet; Patricia Renou-Maissant

  1. By: SOHN Christophe; CHRISTOPOULOS Dimitris; KOSKINEN Johan
    Abstract: The present paper examines the importance of integrating geographic contextual effects into the analysis of social networks. By considering spatial structures as both produced by and productive of social relations, geographic space seems to be more than the extent on which places, actors or events are located and separated by distance. Territoriality, bordering processes, the sense of place, spatial inequalities, scalar relations and spatial connectivity are among the socio-spatial arrangements and practices that are likely to affect social action. The present empirical analysis thus focuses on policy interactions within the cross-border region of Lille because the spatial dimension particularly influences relations in this area. Specifically, we examine three spatial effects, namely, distance, territorial borders and cross-border territoriality, and we use exponential random graph models to model how these contextual variables influence policy interactions. By addressing multiple spatial effects, we develop a specific approach to control for the interactions that occur between these variables in order to elaborate on the complex processes that lead to the formation of social networks. We also explicitly examine how the spatial interaction function is affected by including in the analysis endogenous network effects, exogenous covariates and border factors. In this regard, we use a novel Monte Carlo-based goodness-of-fit summary in order to demonstrate that the predicted spatial interaction function of our model ? net of other effects ? matches the empirical spatial interaction function.
    Keywords: Policy networks; spatial effects; distance; border; territoriality; exponential random graph model
    Date: 2013–10
  2. By: Francisco Parejo; Amélia Branco; João Carlos Lopes; José Rangel Preciado
    Abstract: The cork sector is a relevant case study given the economic importance of this industry for some regions (value added, employment and rural development). This industry is also important because of its contribution to environmental sustainability as it uses a natural renewable raw material. Portugal and Spain are the most important producers of cork and exporters of manufactured cork products (stoppers and agglomerates). The main purpose of this paper is to study the economic integration and the historical changes of cork business location choices in the Iberian Peninsula. We start by studying the historical roots, motivations and economic consequences of the delocalization of Catalonian firms to Portugal during the first quarter of the 20th century. Then a comparison is made with the recent process of delocalization of an anchor firm of Aveiro industrial district (Corticeira Amorim) to Spain. The theoretical framework of this study is the industry and cluster life cycles as well as the recent insights from the evolutionary economic geography.
    Keywords: Regional integration; firm location choices; cork industry; Iberian Peninsula.
    JEL: R32 F23
    Date: 2013–09
  3. By: Neil Lee
    Abstract: Growing cultural diversity is seen as important for innovation. Research has focused on two potential mechanisms: a firm effect, with diversity at the firm level improving knowledge sourcing or ideas generation, and a city effect, where diverse cities helping firms innovate. This paper uses a dataset of over 2,000 UK SMEs to test between these two. Controlling for firm characteristics, city characteristics and firm and city diversity, there is strong evidence for the firm effect. Firms with a greater share of migrant owners or partners are more likely to introduce new products and processes. This effect has diminishing returns, suggesting that it is a 'diversity' effect rather than simply the benefits of migrant run firms. However, there is no relationship between the share of foreign workers in a local labour market and firm level innovation, nor do migrant-run firms in diverse cities appear particularly innovative. But urban context does matter and firms in London with more migrant owners and partners are more innovative than others.
    Keywords: Cultural diversity, innovation, cities, SMEs, migration
    JEL: J61 L21 M13 R23
    Date: 2013–10
  4. By: Bahar, Dany (Harvard University); Hausmann, Ricardo (Harvard University); Hidalgo, Cesar A. (MIT)
    Abstract: The literature on knowledge diffusion shows that it decays strongly with distance. In this paper we document that the probability that a product is added to a country's export basket is, on average, 65% larger if a neighboring country is a successful exporter of that same product. For existing products, having a neighbor with comparative advantage in them is associated with a growth of exports that is higher by 1.5 percent per annum. While these results could be driven by a common third factor that escapes our controls, they are what would be expected from the localized character of knowledge diffusion.
    JEL: F10 O31 O33
    Date: 2013–08
  5. By: Sara Santos Cruz (CEF.UP, Faculdade de Economia, Universidade do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF)
    Abstract: Empirical literature on the geographic location of creative activities is mostly based on the spatial analysis of industries, disregarding the creative employment that lies outside the necessarily limited boundaries of creative industries. In this paper, we analyse agglomeration and co-location patterns of core creative activities by considering both ‘embedded’ (creative professionals working outside the creative sectors) and ‘specialized’ (creative professionals working in the creative sectors) creative employment. Using location quotients and principal component factor and cluster analyses, applied to all 308 Portuguese municipalities, for ten core creative groups, we found that the geographical agglomeration and co-location patterns of these core creative groups differ substantially. The typical arguments sustained by literature - the tendency of creative industries/ employment to agglomerate and co-locate in large metropolises - are only supported in the case of knowledge-intensive activities subjected to Intellectual Property Rights, most notably ‘Advertising/ Marketing’, ‘Publishing’, ‘TV/ Radio’, and ‘Software/ Digital Media’, densely concentrated and co-located in highly developed, large urban centres, with high levels of human capital. These arguments do not hold for the traditional creative activities of ‘Architecture’, ‘Design/ Visual Arts’ and ‘Crafts’, which, although co-located, appear mostly dispersed with small concentrations around intermediate urban centres. ‘Teaching/ training/ research’ present quite dispersed geographical patterns with some clusterization around municipalities with tertiary education institutions. ‘Film/ video/ photography’ and ‘Music/ Performing arts’ show some dispersion throughout the Portuguese territory with concentration around small urban centres and in rural areas. It is evident that, from agglomeration to co-location patterns, creative employment reveals heterogeneous characteristics across creative groups. Indeed, the results obtained show that the differentiated (co)location patterns of creative activities are mainly a regional phenomenon distinguishing regions within the same country, and not only an aspect differentiating countries in international comparisons.
    Keywords: Spatial economics; industrial location; creative industries
    JEL: C01 R12 R30
    Date: 2013–10
  6. By: Ricardo Biscaia (Faculdade de Economia do Porto); Paula Sarmento (Faculdade de Economia do Porto)
    Abstract: This article focuses on the location decision of firms when competing in a spatial Cournot duopoly. Our original contribution is that firms are dependent on a natural resource input, which is assumed to be located in one of the extremes of the market, to be able to produce the output sought by the consumers, and that natural resource is controlled by an independent monopolist. We solve a three stage location game, where in the first stage downstream firms choose their location, and in the next stages upstream and downstream choose how many quantities they sell in the market, assuming that downstream firms must sell their product in all points of the linear city. We conclude that downstream firms agglomerate independently of the unit input transportation cost. In addition, increases in the unit transportation cost bring the plants closer to the natural resource location. Moreover, the upstream firm loses more profit than the downstream firms when the input transportation conditions deteriorate. When we consider the problem of a social planner, we conclude that the location that firms choose is nearly the same than the location that maximizes total welfare in the economy.
    Keywords: Spatial Competition; Vertical Markets; Duopoly Studies; Game Theory
    JEL: D43 L13 R12
    Date: 2013–10
  7. By: Pradhan, Jaya Prakash
    Abstract: This study examines the regional profiles of patenting activities in India. The number of most dynamic sub-national spaces in patent applications is found to be limited to just two to three regions or countries. Regionally, West India, North India and South India mostly dominated the patenting activities during 1990‒2010. The patent performance is highly concentrated among individual countries: the two leading states, namely Maharashtra and Delhi accounted for more than half of total patent applications filed in India in the study period. Empirical analysis further emphasized that states patenting activities are shaped by the size of local markets, availability of skilled labour force, knowledge institutions and urban centres.
    Keywords: Patent, Region, India
    JEL: N75 O30 P25
    Date: 2013–10–12
  8. By: António Afonso; Ana Venâncio
    Abstract: We use Data Envelopment Analysis (DEA) efficiency scores to show that clustering municipalities into encompassing regional clusters improves spending efficiency of single stand- alone municipalities. We propose a new geographic aggregation based on municipalities-to- municipalities commuting flows, defined using hierarchical cluster analysis. Our example for Portugal shows that from an output oriented perspective, between 85 and 95 percent of municipalities would increase their efficiency scores, while from an input oriented perspective, between 81 and 97 percent of municipalities would also be better off in terms of efficiency. Our strategy and results are naturally quite relevant in a context of public spending control.
    Keywords: public spending efficiency, local government, data envelopment analyis (DEA), commuting.
    JEL: C14 H72 R50
    Date: 2013–09
  9. By: Cogneau, Denis; Mesplé-Somps, Sandrine; Spielvogel, Gilles
    Abstract: By applying regression discontinuity designs to a set of household surveys from the 1980–90s, we examine whether Côte d’Ivoire’s aggregate wealth was translated at the borders of neighboring countries. At the border of Ghana and at the end of the 1980s, large discontinuities are detected for consumption, child stunting, and access to electricity and safe water. Border discontinuities in consumption can be explained by differences in cash crop policies (cocoa and coffee). When these policies converged in the 1990s, the only differences that persisted were those in rural facilities. In the North, cash crop (cotton) income again made a difference for consumption and nutrition (the case of Mali). On the one hand, large differences in welfare can hold at the borders dividing African countries despite their assumed porosity. On the other hand, border discontinuities seem to reflect the impact of reversible public policies rather than intangible institutional traits.
    Keywords: national integration; Africa; borders; economic geography; welfare
    JEL: O12 R12 P52
    Date: 2013–10
  10. By: Verhetsel, Ann; Kessels, Roselinde; Blomme, Nele; Cant, Jeroen; Goos, Peter
    Abstract: Due to the globalization and the fragmentation of industrial production processes, the logistics sector, which organizes the linkages between different production plants and the market, is growing fast. This results in an increasing demand for suitable new business locations. Previous research has indicated that accessibility is a key factor in the location decision making process. Though the literature on this subject is extensive, little research has been done to quantify the impact of the different dimensions of accessibility on the location decision process of logistics companies. This paper aims to fill this void in the literature by means of a revealed preference study (using a Geographic Information System (GIS) analysis) and a stated preference study (using a designed discrete choice experiment) in Flanders (Belgium). The results of the revealed preference study served as input to the design of the choice situations in the stated preference study. In this study, the respondents were confronted with a series of choice situations described by means of accessibility variables as well as land rent information. An analysis of the resulting data revealed that land rent is the most important factor in the location choice of logistics companies in Flanders. Access to a port is the one but most important factor, followed by access to a motorway and an inland navigation terminal, and the location in a business park. Finally access to a rail terminal plays no significant role in the location choice of logistics companies in Flanders.
    Date: 2013–10
  11. By: Sebastian Klüsener (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Since the unification of Germany in 1990, the former communist eastern part of the country has experienced substantial levels of population decline and outmigration. These trends are largely attributable to East-West differences in economic development (Mai 2007). In this article, we explore the question of whether the recent decline in population is a temporary phenomenon related to the period of transition, or whether long-term geographical factors also affect spatial population trends in Germany. In particular, we investigate to what extent East-West differences are related to the fact that parts of western Germany belong to the European dorsal (or Blue Banana arc), which has long been the most important area of economic activity in Europe (Brunet 1989). Our findings show that an East-West gradient in spatial population trends has existed since the late 19th century. This suggests that long-term geographical factors are relevant for understanding trends in Germany’s spatial population development.
    Keywords: Germany, population change, spatial analysis
    JEL: J1 Z0
    Date: 2013–10
  12. By: Wang, Lili (UNU-MERIT/MGSoG); Meijers, Huub (School of Business and Economics, Maastricht University); Szirmai, Eddy (UNU-MERIT/MGSoG)
    Abstract: This paper focuses on the role of interregional technology spillovers in the process of industrial growth in Chinese regions in the period 1990-2005. Inflows of FDI increased rapidly from 1990 till 1998, slowing down thereafter. Domestic R&D investment accelerated after 1998. Regional industrial growth benefits from both interregional R&D spillovers and after 1998 from international FDI spillovers. However, in contrast to R&D spillovers, FDI spillovers contribute conditionally, mainly in areas where local R&D stocks are high enough. Interestingly, indirect interregional FDI spillover effects are negative. Foreign investment in one region attracts resources from regions with less FDI, thus having a negative influence on growth of industrial output in neighbouring regions.
    Keywords: Technological spillovers, Interregional spillovers, R&D, Foreign direct investment, Industrial growth, Regional growth, Chinese industry
    JEL: F43 O14 O33 R11 R12
    Date: 2013
  13. By: Rafik Abdesselam (COACTIS, Université Lumière Lyon 2); Jean Bonnet (CREM-UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France); Patricia Renou-Maissant (CREM-UMR CNRS 6211, Université de Caen Basse-Normandie, UFR SEG (Sciences Economiques et Gestion), Normandie Université, France)
    Abstract: We study the relationships between unemployment rate and new-firm startups rate in France using a quarterly data basis over the 1993-2011 period. At the national level we identify that the refugee effect explains the dynamics of entrepreneurship in France over the period 2000-2011. New French firms are mostly set up for necessity motives. At the regional level data analysis methods allow to obtain different classes of regions that represent different type of developments. For each of these classes we are able to identify the existence of refugee/Schumpeter effects both in the short-run and in the long-run.
    Keywords: New firm formation, Business cycle, Schumpeter effect, refugee effect, data analysis methods, panel data
    JEL: L26 E32 R11 C23 C38
    Date: 2013–10

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