nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒11‒02
ten papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Competitors, Complementors, Parents and Places: Explaining Regional Agglomeration in the U.S. Auto Industry By Luis Cabral; Zhu Wang; Daniel Yi Xu
  2. The influence of agglomerations on firm profitability By S. DE SCHOENMAKER; P. VAN CAUWENBERGE; H. VANDER BAUWHEDE
  3. Spatial Spillovers of Foreign Direct Investment: The Case of Vietnam By Toan Thang TRAN; Thi Song Hanh PHAM
  4. “Mobility, networks and innovation: The role of regions’ absorptive capacity” By Ernest Miguélez; Rosina Moreno
  5. Trade Integration, Market Size and Industrialization: Evidence from China's National Trunk Highway System By Benjamin Faber
  6. Media clusters and metropolitan knowledge economy By Karlsson, Charlie; Rouchy, Philippe
  7. “A gravity model of migration between ENC and EU” By Raul Ramos; Jordi Suriñach
  8. Modeling the industrial dynamics of the European metropolitan areas during the process of economic integration: a semiparametric approach By Longhi, C.; Musolesi, A.; Baumont, C.
  9. Preliminary report on KETs priorities declared by regions in the context of their work on Research and Innovation Strategies for Smart Specialisation (RIS3) By Jens Sörvik; Ruslan Rakhmatullin; Manuel Palazuelos-Martinez
  10. A Panel Data Toolbox for MATLAB By Álvarez, Inmaculada; Barbero, Javier; Zofío, José Luis

  1. By: Luis Cabral; Zhu Wang; Daniel Yi Xu
    Date: 2013
    Abstract: The geographic concentration of retail firms is a remarkable phenomenon. Existing literature suggests that retail firms benefit from spatial concentration in terms of heightened demand. However, the proximity to other firms also intensifies competition and results in higher costs for land and employees. To examine the net impact of these two opposing agglomeration effects, this paper analyzes the impact of localization, urbanization and diversity on firm profitability. The sample consists of Belgian single-establishment retail firms, during the period 2005-2010. The results show that urbanization has a negative and diversity a positive influence on profitability. Furthermore, weak evidence of localization effects is found, depending on the characteristics of the co-located firms. It seems that establishments of multi-establishment firms contribute positively to the profitability of single-establishment firms, while the presence of other single-establishment firms has a negative influence.
    Keywords: profitability, localization, urbanization, diversity
    Date: 2013–10
  3. By: Toan Thang TRAN (Central Institute for Economic Management, Vietnam); Thi Song Hanh PHAM (Sheffield Business School, Sheffield Hallam University)
    Abstract: In an effort to unlock the black box of mixed empirical evidence for productivity spillovers from foreign direct investment in host countries, this paper, using the case of Vietnam, examined the role of geographical proximity and inter firm interaction in determining productivity spillovers of FDI. The spatial productivity model specified based on the empirical spillovers literature and spatial econometric model. This paper confirms negative effect of horizontal spillovers. The distance and interaction are confirmed to be two determinants of the significance of spillover effects. The paper finds the positive backward and negative forward spillovers. Indirect effect (or the inter-regional spillovers) is found about twice to four times higher than the direct effect (or the intra-regional spillovers) but such kind of indirect effect is quickly attenuated for a certain distance. The paper also finds the evidence of the effect arising from the social interaction among local firms in productivity spillovers. The testing results suggest that local firm's productivity is substantially driven by the agglomeration effect and the presence of interand intra-regional FDI.
    Date: 2013
  4. By: Ernest Miguélez (Economics and Statistics Division, World Intellectual Property Organization & AQR-IREA & CReAM); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: The purpose of this paper is to assess the extent to which regions’ absorptive capacity determines knowledge flows’ impact on regional innovation intensity. In particular, it looks at the role of the cross-regional co-patenting and mobility of inventors in fostering innovation, and how regions with large absorptive capacity make the most of these two phenomena. The paper uses a panel of 274 regions over 8 years to estimate a regional knowledge production function with fixed-effects. Network and mobility variables, and interactions with regions’ absorptive capacity, are included among the r.h.s. variables to test the hypotheses. We find evidence of the role of both mobility and networks. However, inflows of inventors are critical for wealthier regions, while have more nuanced effects for less developed areas. It also shows that regions’ absorptive capacity critically adds an innovation premium to the benefits to tap into external knowledge pools. Indeed, the present study corroborates earlier work on the role of mobility and networks for spatial knowledge diffusion and subsequent innovation. However, it clearly illustrates that a certain level of technological development is critical to take advantage of these phenomena, and therefore “one-size-fits-all” innovation policies need to be reconsidered.
    Keywords: absorptive capacity, inventor mobility, spatial networks, patents, regional innovation. JEL classification:
    Date: 2013–10
  5. By: Benjamin Faber
    Abstract: Large scale transport infrastructure investments connect both large metropolitan centers of production as well as small peripheral regions. Are the resulting trade cost reductions a force for the diffusion of industrial and total economic activity to peripheral regions, or do they reinforce the concentration of production in space? This paper exploits China's National Trunk Highway System as a large scale natural experiment to contribute to our understanding of this question. The network was designed to connect provincial capitals and cities with an urban population above 500,000. As a side effect, a large number of small peripheral counties were connected to large metropolitan city regions. To address non-random route placements on the way between targeted city nodes, I propose an instrumental variable strategy based on the construction of least cost path spanning tree networks. The estimation results suggest that network connections led to a reduction in GDP growth among no n-targeted peripheral counties due to reduced industrial output growth. Additional estimation results present evidence that appears consistent with the existence of core-periphery effects of trade integration as found in increasing returns trade theory and economic geography
    Keywords: Trade integration, industrialization, road infrastructure
    JEL: F12 F15 O18 R12
    Date: 2013–10
  6. By: Karlsson, Charlie (Jönköping International Business School (JIBS), Center of Excellence for Science and Innovation Studies (CESIS) KTH, Sweden); Rouchy, Philippe (Bleking Institute of Technology)
    Abstract: Large media clusters have emerged in a limited number of large cities, characterizing the geographical concentration of the global media industry. This paper starts by exploring the effect of the rapid advancement of Information and Communication Technologies (ICT) had on the media economy. It concludes that the role of the “weightless economy” on media cluster has enhanced its production and distribution functions. We review the specificities of media cluster that ties agglomeration to creative, diversified attributes of production and distribution. The implication is that media firms hold strong tendencies to cluster in urban regions since they make full usage of its resources, namely its export capabilities and import transformation strength. Finally, we invite researchers to consider Jacobs’ metropolitan and global reciprocating system of city growth as a valid unit for analysing media clusters. The question leads envisaging if media clusters' strong metropolitan base allows them to grow further through globalised circuits. The paper concludes that large, media clusters drive on intellectually dense network of information, which can only be cultivated through large agglomerations existing capabilities. Consequently, the research question focuses upon the economic role of knowledge in media creation and export replacement. We emphasize the strength of Jacob’s model of media cluster for understanding its mechanism of value creation and endogenous system of globalisation.
    Keywords: clustering; media industry; agglomeration; weightless economy; creative industry; globalization; regional development
    JEL: L82 R11
    Date: 2013–10–21
  7. By: Raul Ramos (Faculty of Economics, University of Barcelona); Jordi Suriñach (Faculty of Economics, University of Barcelona)
    Abstract: Due to ageing population and low birth rates, the European Union (EU) will need to import foreign labour in the next decades. In this context, the EU neighbouring countries (ENC) are the main countries of origin and transit of legal and illegal migration towards Europe. Their economic, cultural and historical links also make them an important potential source of labour force. The objective of this paper is to analyse past and future trends in ENC-EU bilateral migration relationships. With this aim, two different empirical analyses are carried out. First, we specify and estimate a gravity model for nearly 200 countries between 1960 and 2010; and, second, we focus on within EU-27 migration flows before and after the enlargement of the EU. Our results show a clear increase in migratory pressures from ENC to the EU in the near future, but South-South migration will also become more relevant.
    Keywords: absorptive capacity, inventor mobility, spatial networks, patents, regional innovation. JEL classification: J11, J15, J61, C23, C53
    Date: 2013–10
  8. By: Longhi, C.; Musolesi, A.; Baumont, C.
    Abstract: The specialization patterns of metropolitan areas are crucial in characterizing the effects of economic integration in Europe. This paper aims to provide and estimate an econometric model that explains both sectoral specialization and sectoral dissimilarity, measured with the GINI and the KRUGMAN indexes, respectively, for 35 European metro areas during the period 1980-2005. A semiparametric approach is proposed to address the issues of non-linearity and separability. The econometric analysis indicates how the deepening of the processes of development and integration occurred in the last decades affected both specialization and similarity of the sectoral metropolitan structure, finally supporting a "specializing alike hypothesis".
    JEL: C14 C23 C26 O52 R1
    Date: 2013
  9. By: Jens Sörvik (European Commission – JRC - IPTS); Ruslan Rakhmatullin (European Commission – JRC - IPTS); Manuel Palazuelos-Martinez (European Commission – JRC - IPTS)
    Abstract: The KETs preliminary report consists of information on KETs and Smart specialisation that the S3 Platform has developed and diffused in different forms, as well as relevant information that has been identified by participation in different kinds of events. The first part of the report focuses briefly on the role of KETs in smart specialisation as a means of regional development, i.e. the policy rationale for regions to invest in KETs. The second part summarises policy recommendations and tools with regard to Smart Specialisation and KETs, as have been identified in events on the topic, where the S3 Platform has participated. The third part provides maps on regional priorities related to KETs. The data for this section come from the new web-based priority mapping tool called Eye@RIS3. This tool displays a range of priorities identified and declared by regions for their RIS3 and includes, the names of the regions that are in the database (69), the names of those that have indicated a priority with relation to KETs (48 in total), a list of the priorities related to KETs (96 -around 20% of the total number of listed priorities), connection to regional innovation scoreboard, and connection to patent data as an indicator of regional capabilities. The report presents the following initial conclusions and envisaged next steps: i) Regions tend to indicate that in the context of the RIS3, exercise horizontal priorities need to be defined and that these could involve the diffusion and/or application of KETs; ii) still there are many questions related to state aid and financing of KETs; iii) all types of regions aim for KETs: not only leaders, but all of the range from leader to modest; and iv) around 2/3 of all regions whose data are included in the "Eye@RIS3" database mention KETs as a priority of their RIS3. Around 20% of all priorities declared by regions whose data are included in the "Eye@RIS3" database are related to KETs.
    Keywords: European cohesion policy, Structural Funds, smart specialisation, Innovation Union
    Date: 2013–09
  10. By: Álvarez, Inmaculada (Departamento de Análisis Económico (Teoría e Historia Económica). UAM); Barbero, Javier (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: Panel Data Toolbox is a new package for MATLAB that includes functions to estimate the main econometric methods of panel data analysis. The package includes code for the standard fixed, between and random effects estimation methods, as well as for the existing instrumental panel and new spatial panel. This paper describes the methodology and implementation of the functions and illustrates their use with well-known examples. We perform numerical checks against other popular commercial and free software in order to show the validity of the results.
    Keywords: panel data; instrumental panel; spatial panel; econometrics; MATLAB.
    JEL: C21 C23 C26
    Date: 2013–10

This nep-geo issue is ©2013 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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