nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒11‒14
nine papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Firm Heterogeneity and the Localization of Economic Activities By Pamela Bombarda
  2. Towards DUI Regional Innovation Systems By Phil Cooke
  3. Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence By Olivier Coibion; Yuriy Gorodnichenko; Dmitri Koustas
  4. The impact of Urban Enterprise Zones on establishment location decisions: Evidence from French ZFUs. By Mayer,T.; Mayneris, F.; Py, L.
  5. Foreign Direct Investment across China: what should we learn from spatial dependences? By Nasser Ary Tanimoune; Cécile Batisse; Mary-Françoise Renard
  6. A Comparison of GDP growth of European countries during 2008-2012 period from regional and other perspectives By Mazurek, Jiri
  7. Inference on Higher-Order Spatial Autoregressive Models with Increasingly Many Parameters By Abhimanyu Gupta; M. Robinson
  8. Einfluss der europäischen Regionalpolitik auf die deutsche Regionalförderung By Schwengler, Barbara
  9. Difusión del consumo de leche en España (1865-1981) By Ismael Hernández Adell; Francisco Muñoz Pradas; Josep Pujol Andreu

  1. By: Pamela Bombarda (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: This paper examines how market-access strategies, via exports and FDI, respond to changes in the level of integration. Empirical evidence shows that both firm exports and multinational activity are affected by trade-liberalization episodes. We account for the strong positive correlation between exports and FDI by developing a general-equilibrium model featuring firm heterogeneity, trade and FDI with final and intermediate products. Different geographical spaces are considered to quantify the effect of a preferential trade agreement (PTA) on supply-mode decisions, for both partner and excluded countries. The model sheds new light on the mechanisms through which geography reshapes the concentration of economic activities both inside and outside the PTA area.
    Keywords: Heterogeneous firms; PTA; Spatial networks; Intra-firm trade
    Date: 2013–10–27
  2. By: Phil Cooke
    Abstract: This paper marks a departure in seeking to develop the conceptual and practical apparatus of a regional innovation system (RIS) for science & technology-disadvantaged regions. It is empirically based and builds on insights about the limitations of STI (The Science-Technology-Innovation Approach, which is Linear, Specialist, Exclusive, Explicit/Codified, Global) and the strengths of DUI (The Doing-Using-Interacting Approach, which is Interactive, Diversified, Inclusive, Implicit, Regional/Local). DUI is highly compatible with Schumpeterian understanding that the core process of innovation is 'knowledge recombination'. From an evolutionary economic geography perspective, which is taken in the paper, this raises interesting issues for the economics of knowledge. First it underlines the need to pay serious attention to questions of the 'proximity' imperative, suggesting not that knowledge is easily appropriable for ('open') innovation but that it may be excessively difficult to identify because it lies hidden in possibly neighbouring - but different - industries and firms. Thus, second, it makes the notion of 'knowledge spillovers' problematic because the spillovers may not be forthcoming at all or may come in unrecognisable forms. Hence, third, this means that firms likely need more than usual RIS intermediation (including knowledge demonstration and transfer services) to avoid market failures of innovation. Assistance with identification of ‘modular’ policy elements is only one of the services required for DUI product, process and policy innovation. The complexity theory notion of 'transversality' has been advanced to capture the 'emergence' of novelty out of contexts of difference, unifying a solution to the three conceptual problem-issues raised in the paper.
    Date: 2013–10
  3. By: Olivier Coibion; Yuriy Gorodnichenko; Dmitri Koustas
    Abstract: The persistence of U.S. unemployment has risen with each of the last three recessions, raising the specter that future U.S. recessions might look more like the Eurosclerosis experience of the 1980s than traditional V-shaped recoveries of the past. In this paper, we revisit possible explanations for this rising persistence. First, we argue that financial shocks do not systematically lead to more persistent unemployment than monetary policy shocks, so these cannot explain the rising persistence of unemployment. Second, monetary and fiscal policies can account for only part of the evolving unemployment persistence. Therefore, we turn to a third class of explanations: propagation mechanisms. We focus on factors consistent with four other cyclical patterns which have evolved since the early 1980s: a rising cyclicality in long-term unemployment, lower regional convergence after downturns, rising cyclicality in disability claims, and missing disinflation. These factors include declining labor mobility, changing age structures, and the decline in trust among Americans. To determine how these factors affect unemployment persistence, this paper exploits regional variation in labor market outcomes across Western Europe and North America during 1970-1990, in contrast to most previous work focusing either on cross-country variation or regional variation within countries. The results suggest that only cultural factors can account for the rising persistence of unemployment in the U.S., but the evolution in mobility and demographics over time should have more than offset the effects of culture.
    JEL: E24 E32 E52 J64 R11 R23
    Date: 2013–10
  4. By: Mayer,T.; Mayneris, F.; Py, L.
    Abstract: In this paper, we study the impact of a French enterprise zones program -- the``Zones Franches Urbaines'' (ZFUs) policy-- on establishment location decisions. Our empirical analysis is based on an micro-geographic dataset that provides exhaustive information on the location of establishments in France over the period 2002-2007 at the census block level. Our identification strategy, which combines spatial and time differencing, assesses how the probability that an establishment locates in the ZFU area rather than in the non-ZFU area of a municipality changes after the implementation of the policy. We also implement double difference estimations, using the fact that targeted urban areas have been selected in different waves over time. Finally, we exploit a discontinuity in the eligibility criteria of the policy as an exogenous source of variation to estimate the impact of the treatment. We find that conditioning on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However the impact is highly heterogeneous across zones, industries and firms. Moreover, we show that the policy mostly generates diversion effects within municipalities.
    Keywords: Firm Location, Enterprise zones, Spatial and Time Differencing.
    JEL: R12 R38 R5
    Date: 2013
  5. By: Nasser Ary Tanimoune (School of International Development and Global Studies, University of Ottawa (Canada) - School of International Development and Global Studies, University of Ottawa (Canada) - School of International Development and Global Studies - University of Ottawa (Canada)); Cécile Batisse (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: The paper investigates the importance of spatial dependences on Foreign Direct Investment (FDI) localization across Chinese provinces over the 1992-2009. Based on exploratory spatial data analysis, spatial sigma-convergence and spatial Durbin specifications, we present a much clearer picture of FDI dispersion and spatial convergence across China by highlighting the spillover effects of FDI localization in Chinese provinces and regions. Our results are threefold. First, FDI convergence is more pronounced compared to the Central region, whereas the dispersion is greater when the Coastal and the Western regions are taken as reference points. Second, at the province level, FDI localization seems to present a substitutable configuration. Third, when controlling for the spatial distribution of FDI at the level of regions, it seems, conversely, that the FDI localization presents a complementary configuration. The finding resulting from the opposing configurations of the FDI localizations observed at the region and province levels seems to argue in favor of promoting FDI attractiveness policies based on regional complementarities.
    Keywords: China;Convergence;FDI;spatial panel data;spatial Durbin model
    Date: 2013–10–31
  6. By: Mazurek, Jiri
    Abstract: The aim of the article is to compare total real GDP growth of European countries from the 3rd quarter of 2008 to the 3rd quarter of 2012, that is the period from the start of the Great recession in European Union to the present day. This period is characterized by a predominant economic stagnation or an economic recession, which occurred in the majority of examined European countries. Countries were divided into groups based on the following grounds: whether they are geographically close the economic center (Germany) or periphery, whether they are in Eurozone or not, whether they are (new) EU members or not, etc. The main findings from the comparisons are as follows: 1. European countries close to the economic center (Germany and its neighbours) experienced positive economic growth during examined period on average, while countries from European periphery experienced negative economic growth on average during the same period. This difference was found statistically significant at α = 0.01 level. 2. Differences between Eurozone and non-Eurozone and differences between old and new EU members were found statistically insignificant. 3. Among European regions with the most negative real total GDP growth were countries from Baltics, Balkans, Southern Europe (Italy, Portugal) and Iceland. The most successfull countries with the most positive real total GDP growth were countries of central Europe (Poland, Slovakia, Germany, Switzerland, Austria) and Northern Europe (Sweden and Norway).
    Keywords: economic growth, European union, international economics, European regions.
    JEL: F43 F44 O47 O57 R11
    Date: 2013–11–03
  7. By: Abhimanyu Gupta; M. Robinson
    Abstract: This paper develops consistency and asymptotic normality of instrumental variables and least squares estimates for the parameters of a higher-order spatial autoregressive (SAR) model with regressors. The order of the SAR model and the number of regressors are allowed to approach infinity slowly with sample size, and the permissible rate of growth of the dimension of the parameter space relative to sample size is studied. Besides allowing the number of estimable parameters to increase with the data, this has the advantage of accommodating explicitly some asymptotic regimes that arise in practice. Illustrations are discussed, in particular settings where the need for such theory arises quite naturally. A Monte Carlo study analyses various implications of the theory in finite samples. For empirical researchers our work has implications for the choice of model. In particular if the structure of the spatial weights matrix assumes a partitioning of the data then spatial parameters should be allowed to vary over clusters.
    Date: 2013–10–16
  8. By: Schwengler, Barbara (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "This paper discusses the impact of European Regional Policy on German Regional State Aid from past until today and considers differences and similarities in the development of European and National Regional State Aid. It is shown how rules and guidelines were adapted to the enlargement of the European Union and the increasing regional disparities and how the European Commission has restricted the scope of national regional policy for State Aid step by step. At the beginning Member States were able to determine the scope of their assisted areas but in the early 1980s the European Commission restricted this by introducing thresholds for claiming regions as national assisted areas. Since 1988 the European Union average of gross domestic product per inhabitant determined the scope of the assisted areas. At the end of the 1990s the European Commission allowed more flexibility for claiming assisted areas by the Member States but restricted the population coverage eligible for regional State Aid by establishing national population ceilings. After the enlargement of the European Union in 2004 the gross domestic product per inhabitant and the scope of national population ceilings declined, especially for older Member States. This paper shows the effects of the enlargement of the European Union and the changing requirements for assisted areas and how they influenced the scope of German National Regional State Aid. As a result many conflicts between Germany and the European Commission occurred which are also described in this article. Finally, the changes for the next period 2014-2020 will be discussed." (Author's abstract, IAB-Doku) ((en))
    JEL: R58 L50 H1
    Date: 2013–10–22
  9. By: Ismael Hernández Adell (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona); Francisco Muñoz Pradas (Departament de Geografia, Universitat Autònoma de Barcelona); Josep Pujol Andreu (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona)
    Abstract: La aproximación habitual en el estudio de la difusión del consumo de un alimento, además de descomponer su aportación nutricional, consiste en estudiar la evolución de sus consumos medios. Pero en todo proceso de difusión de un nuevo producto, establecer el consumo promedio es tan importante como conocer el número de consumidores. Este artículo propone un análisis de la recepción del consumo de leche entre la población española atendiendo a ambas dimensiones entre finales del siglo XIX y 1981. Esto es, se combinará el conocimiento de la evolución del número de consumidores con el de sus niveles medios de consumo. Adoptar este planteamiento supone enfrentarse con el problema de la ausencia de datos sobre la magnitud de consumidores en las fuentes estadísticas disponibles. Este artículo propone una estrategia metodológica diseñada para reconstruir la evolución de esa población tanto en una escala temporal como espacial.
    Date: 2013–10

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