nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒11‒16
seventeen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. An economic theory of regional clusters By BELLEFLAMME, Paul; PICARD, Pierre; THISSE, Jacques-François
  2. The Evolving Geography of China’s Industrial Production: Implications for Pollution Dynamics and Urban Quality of Life By Siqi Zheng; Cong Sun; Ye Qi; Matthew E. Kahn
  3. Growth dynamics in regional systems of technological activities – A SVAR approach By Matthias Duschl; Thomas Brenner
  4. Institutional Investors Flows and the Geography of Contagion By Damien PUY
  5. National borders matter...where one draws the lines too By Vicard, Vincent; Lavallée, Emmanuelle
  6. Geographic Concentration of Foreign Visitors to Japan By Ayumu Tanaka
  7. Here Be Startups: Exploring a young digital cluster in Inner East London By Max Nathan; Emma Vandore
  8. Labour’s Record on Neighbourhood Renewal in England: Policy, Spending and Outcomes 1997-2010 By Alex Fenton; Amanda Fitzgerald; Ruth Lupton
  9. Agglomeration and welfare: the core-periphery model in the light of Bentham, Kaldor, and Rawls By CHARLOT, Sylvie; GAIGNE, Carl; ROBERT-Nicoud, Frederic; THISSE, Jacques-François
  11. Trade facilitation and country size By Amin, Mohammad; Haidar, Jamal Ibrahim
  12. Smoothed Spatial Maximum Score Estimation of Spatial Autoregressive Binary Choice Panel Models By Lei, J.
  13. Education, experience and dynamic urban wage premium By Fredrik Carlsen; Jorn Rattso; Hildegunn E. Stokke
  14. Do Regional Trade Agreements Enhance International Technology Spillovers? By Naoto Jinji; Xingyuan Zhang; Shoji Haruna
  15. Internal and International Vertical Specialization of Brazilian states– An Input-Output analysis By Yücer, Aycil; Siroën, Jean-Marc; GUILHOTO, Joaquim
  16. Análisis de las disparidades regionales en Colombia: una aproximación desde la estadística espacial, 1985 – 2010 By Moncada Mesa, Jhonny; Loaiza Quintero, Osmar Leandro
  17. Potencial de Convergência Regional em Educação no Brasil By Marcelo Medeiros; Luis Felipe Batista de Oliveira

  1. By: BELLEFLAMME, Paul; PICARD, Pierre; THISSE, Jacques-François
  2. By: Siqi Zheng; Cong Sun; Ye Qi; Matthew E. Kahn
    Abstract: China’s rapid economic growth has been fueled by industrialization and urbanization. Given its export focus, this industrialization was spatially concentrated in the coastal eastern cities. Over the last decade, a spatial transformation has taken place leading to a deindustrialization of the rich coastal cities and sharp industrial growth in the inland cities. This survey examines recent work that studies the economic geography of industrial production, per-capita income, pollution and quality of life in China’s cities. We focus on the interaction between firms, local governments and the central government that together determine the new economic geography of industry and pollution within China.
    JEL: L23 L38 L6 R14 R23 R28
    Date: 2013–11
  3. By: Matthias Duschl (Economic geography and Location Research, Philipps-Universität Marburg); Thomas Brenner (Economic geography and Location Research, Philipps-Universität Marburg)
    Abstract: This paper analyses the causal relationships in regional technological systems within a structural vector autoregression (SVAR) framework. Applying a data-driven identification strategy based on Independent Component Analysis, it shows how the regional growth dynamics of economic, research, innovation and educational activities affect each other instantaneously and over time in five different industries. Referring to the type of industry and its knowledge base, expectations are derived on how industry-specific growth processes unfold. Knowledge on the causal relations among the various activities in such regional technological systems is of utmost relevance to the design and implementation of efficient policy instruments.
    Keywords: regional growth, SVAR, non-normality, innovations, universities, R&D, regional technological systems
    JEL: C33 O30 R11
    Date: 2013–10–09
  4. By: Damien PUY
    Abstract: This paper explores the geography of portfolio flows emanating from institutional investors located in mature markets. We identify precise global and regional dynamics in equity and bond flows. Very few countries happen to receive (or lose) funding in isolation. We also find strong evidence of global contagion: although global waves originate in developed countries, emerging markets’ funding is much more affected. We illustrate this finding by deriving “contagion maps” showing where contagion spreads and with what intensity. In general, our results suggest that “push” effects from advanced market investors affect massively developing countries.
    Keywords: Capital flows, Institutional Investors, Mutual Funds, Contagion, Crises, Push-and-Pull factors.
    JEL: F32 F36 G11 G15 G23
    Date: 2013
  5. By: Vicard, Vincent; Lavallée, Emmanuelle
    Abstract: The fact that crossing a political border dramatically reduces trade flows has been widely documented in the literature. The increasing number of borders has surprisingly attracted much less attention. The number of independent countries has indeed risen from 72 in 1948 to 192 today. This paper estimates the effect of political disintegration since World War II on the measured growth in world trade. We first show that trade statistics should be considered carefully when assessing globalization over time, since the definition of trade partners varies over time. We document a sizeable resulting accounting artefact, which accounts for 17% of the growth in world trade since 1948. Second, we estimate that political disintegration alone since World War II has raised measured international trade flows by 9% but decreased actual trade flows (including inter-regional trade) by 4%.
    Keywords: Trade; Commerce; Frontières; Trade Statistics; Political Disintegration; Borders;
    JEL: N70 F02
    Date: 2013
  6. By: Ayumu Tanaka
    Abstract: This paper provides the first evidence of geographic concentration of foreign visitors in Japan, using a new data on nights spent by foreign visitors in each region. Using locational Gini coefficients, I show that foreign visitors are more geographically concentrated than Japanese visitors and the level of geographical concentration vary across source countries. In addition, I employ gravity equations to examine the determinants of nights spent by foreign visitors in each prefecture. The results suggest that visa policy, transport infrastructure, and natural and cultural factors, as well as traditional gravity variables such as distance and economic size, play a role in international travel to Japanese prefectures.
    Keywords: foreign visitors, geographic concentration, locational Gini coefficient, gravity equation
    JEL: F14 L83 R12
  7. By: Max Nathan; Emma Vandore
    Abstract: The digital industries cluster known as 'Silicon Roundabout' has been quietly growing in East London since the 1990s. Now rebranded 'Tech City', it is now the focus of huge public and government attention. National and local policymakers wish to accelerate the local area's development: such cluster policies are back in vogue as part of a re-awakened interest in industrial policy in many developed countries. Surprisingly little is known about Tech City's firms or the wider ecosystem, however, and existing cluster policies have a high failure rate. This paper performs a detailed mixed-methods analysis, combining rich enterprise-level data with semi-structured interviews. We track firm and employment growth from 1997-2010 and identify a number of distinctive features: branching from creative to digital content industries, street-level sorting of firms, the importance of local amenities and a lack of conventional cluster actors such as universities or anchor businesses. We also argue that the existing policy mix embodies a number of tensions, and suggest areas for improvement.
    Keywords: Digital economy, cities, clusters, innovation, London, Silicon Roundabout, Tech City
    JEL: L2 L52 M13 O18 O31 R11
    Date: 2013–11
  8. By: Alex Fenton; Amanda Fitzgerald; Ruth Lupton
    Abstract: When he came to power in 1997, Tony Blair reacted to widening disparities between poorer and richer neighbourhoods by declaring that no one in future decades should be seriously disadvantaged by where they lived. This paper reviews the policies that Labour pursued and assesses how close it came to realising Blair's vision. It draws on speeches, policy documents, government website and evaluation reports, and on new analysis of administrative and survey data. We find that Labour's neighbourhood initial policy approach - the cross departmental National Strategy for Neighbourhood Renewal, with its 'floor targets' below which no neighbourhood should fall - was distinctive, although after 2007 there was a move away from this approach towards a narrower focus on economic regeneration, at large spatial scales, and on the reduction of worklessness. Evaluations report that the policies pursued represented value for money and there were trends towards positive outcomes. Physical environments and services got better during Labour's term in office - a direct result of the policies enacted. Gaps between poorer and richer areas also improved in many individual outcomes, although these cannot be so readily attributed to neighbourhood policy per se. All gaps remained large in 2010, suggesting that Blair's vision was not fully realised: which is, perhaps, not surprising in the context of sustained income inequalities.
    Keywords: neighbourhood, regeneration, renewal, spatial, New Labour
    JEL: I38 H76
    Date: 2013–10
  9. By: CHARLOT, Sylvie; GAIGNE, Carl; ROBERT-Nicoud, Frederic; THISSE, Jacques-François
  10. By: Paola Brighi; Valeria Venturelli
    Abstract: This paper investigates the effect of revenue and geographic diversification on bank performance, also on a risk adjusted basis. Using an unbalanced panel dataset of 3,002 observations relative to Italian banks for the period 2006-2011, the core question is to analyse the effect of geographic and functional diversification across and within both interest and non-interest income and their effect on some principal performance measures. Furthermore in our study we analyse whether certain type of institutions are better able to reap the benefits of diversification analysing performance implications for different categories of banks and if the results have been affected by the financial crisis. The main results suggest that revenue and geographical diversification play a role in determining bank performance. The relative effects appear, however, to be different between mutual and not-mutual banks suggesting different business strategies for different banks. Moreover, in the after crisis period, banks that have been less penalized in terms of riskadjusted profit are those characterised by a gretare focus on non interest income component and the ones more geographically diversified. These findings have strategic implications both for bank managers, regulators and supervisors for the consequences on banks’ performance and stability.
    Keywords: Bank heterogeneity, Revenue diversification, Geographic diversification, Risk adjusted performance, Panel data
    JEL: G21
    Date: 2013–10
  11. By: Amin, Mohammad; Haidar, Jamal Ibrahim
    Abstract: It is argued that compared with large countries, small countries rely more on trade and therefore they are more likely to adopt liberal trading policies. The present paper extends this idea beyond the conventional trade openness measures by analyzing the relationship between country size and the number of documents required to export and import, a measure of trade facilitation. Three important results follow. First, trade facilitation does improve as country size becomes smaller; that is, small countries perform better than large countries in terms of trade facilitation. Second, the relationship between country size and trade facilitation is nonlinear, much stronger for the relatively small than the large countries. Third, contrary to what existing studies might suggest, the relationship between country size and trade facilitation does not appear to be driven by the fact that small countries trade more as a proportion of their gross domestic product than the large countries.
    Keywords: Economic Theory&Research,Free Trade,Trade Policy,Transport and Trade Logistics,Common Carriers Industry
    Date: 2013–11–01
  12. By: Lei, J. (Tilburg University, Center for Economic Research)
    Abstract: Abstract: This paper considers spatial autoregressive (SAR) binary choice models in the context of panel data with fixed effects, where the latent dependent variables are spatially correlated. Without imposing any parametric structure of the error terms, this paper proposes a smoothed spatial maximum score (SSMS) estimator which consistently estimates the model parameters up to scale. The identification of parameters is obtained, when the disturbances are time-stationary and the explanatory variables vary enough over time along with an exogenous and time-invariant spatial weight matrix. Consistency and asymptotic distribution of the proposed estimator are also derived in the paper. Finally, a Monte Carlo study indicates that the SSMS estimator performs quite well in finite samples.
    Keywords: Spatial Autoregressive Models;Binary Choice;Fixed Effects;Maximum Score Estimation
    JEL: C14 C21 C23 C25 R15
    Date: 2013
  13. By: Fredrik Carlsen (Department of Economics, Norwegian University of Science and Technology); Jorn Rattso (Department of Economics, Norwegian University of Science and Technology); Hildegunn E. Stokke (Department of Economics, Norwegian University of Science and Technology)
    Abstract: We analyze static and dynamic agglomeration effects across education groups. The data are based on administrative registers covering all full time workers in the private sector of Norway during 2001-2010, about 6.5 million worker-year observations, including place and sector of work experience since 1993. Accounting for unobservable abilities with identification based on movers, the static urban wage premium is similar across education groups. When the history of work experience in different regions and sectors is included, we show that the dynamic wage premium increases in education level and that highly educated in high wage sectors have the largest learning advantage.
    Keywords: Agglomeration economies, sorting, education, worker experience
    JEL: J24 J31 J61 R12 R23
    Date: 2013–11–05
  14. By: Naoto Jinji; Xingyuan Zhang; Shoji Haruna
    Abstract: We examine whether regional trade agreements (RTAs) enhance international technology spillovers by using a panel of patent application and citation data for 142 countries/regions during 1990–2006 at the United States Patent and Trademark Office. We use patent citation data as a proxy for technology spillovers. A gravity-like model is estimated by the negative binomial model and the fixed effects negative binomial (FXNB) model. We find that technology spillovers between two countries/regions measured by patent citations are greater if they are signatories to the same RTA. This finding is quite robust for different estimation techniques. The estimated results from the FXNB model suggest that there is no significant difference in the effects of free trade agreements and customs unions on technology spillovers. We also find that General Agreement on Tariffs and Trade (GATT) and World Trade Organization (WTO) membership and participation in the Information Technology Agreement of WTO facilitate technology spillovers across signatories.
    Keywords: regional trade agreement, technology spillovers, patent citations, economic distance, gravity model
    JEL: F15 O33
  15. By: Yücer, Aycil; Siroën, Jean-Marc; GUILHOTO, Joaquim
    Abstract: WTO, OECD with many others, suggest the trade in value-added would be a “better” measure to understand the impact of trade on employment, growth, production etc. when import content in exports is important. We use in this work an Input-Output table for 2008, to calculate the value-added exported by Brazilian states. We distinguish the value-added exported directly by the state itself or indirectly via other states. Then, we define the extent of vertical specialization among Brazilian states by using value-added indirectly exported. We calculate equally the import content in states’ exports. If the share of import content in Brazilian exports is low, we show evidence that inter-state trade is quite high across some Brazilian states. Inter-state vertical specialization then operates at upstream stages of the value chain before the good be exported to foreign countries.
    Keywords: Vertical Specialization; Global supply-chain; Input-Output Analysis; Brazil; intra-national trade;
    JEL: F02 F15 R12 R15
    Date: 2013–06
  16. By: Moncada Mesa, Jhonny; Loaiza Quintero, Osmar Leandro
    Abstract: Resumen: Este trabajo tiene por objetivo determinar si existe convergencia en la actividad económica de los municipios de Colombia, medida por medio de los Ingresos Tributarios per cápita, para el periodo 1985-2010. Con este fin se realiza un análisis exploratorio de datos espaciales, elaborando los indicadores de Moran Global y Local; además, se construye la Matriz de Markov del Moran Local, donde se encuentra autocorrelación espacial positiva entre los municipios del país, sobresaliendo las Áreas Metropolitanas ubicadas en Cundinamarca y Antioquia. Por otro lado, se testea la hipótesis de convergencia no condicional mediante estimaciones de convergencia clásica, en primera medida, para luego incluir explícitamente la dependencia espacial en el modelo de regresión. De esta forma, se concluye que hay convergencia en los municipios colombianos para el periodo analizado, llegado a una velocidad de convergencia aproximada de 3,34% anual.
    Abstract: This paper aims to determine whether there is any convergence at all between the economic activities of the Colombian municipalities, measured by the per capita tax revenues of each one, for the period 1985-2010. To this end, an exploratory spatial data analysis is performed, calculating the local and global Moran indicators, as well as the Markov Matrix of the local Moran. Positive spatial autocorrelation is found between Colombian municipalities, being the metropolitan areas located in Cundinamarca and Antioquia examples of outstanding performance. This way, it is concluded that there is convergence between the Colombian municipalities for the period analyzed, reaching an approximate convergence speed of 3.34% per annum.
    Keywords: Economía espacial, econometría espacial, disparidad regional, convergencia, Spatial Economics, Spatial Econometrics, Regional Disparity, Convergence
    JEL: C21 O47 R11 R12
    Date: 2013–10–30
  17. By: Marcelo Medeiros; Luis Felipe Batista de Oliveira
    Abstract: Este estudo analisa fatores que afetam as desigualdades educacionais entre e dentro de regiões do Brasil, com foco em determinar como diferenças de características das populações e a forma diferenciada como essas características se distribuem influenciam resultados educacionais em cada região do país. Para isso, é analisada a população de jovens de 14 a 17 anos, em todo o Brasil, a partir de dados da Pesquisa Nacional por Amostra de Domicílios (PNAD). Por meio da decomposição da desigualdade entre efeitos de atributos observados, respostas observadas a esses atributos e resíduos das regressões lineares de predição da educação, conclui-se que, para explicar desigualdades entre e intrarregionais, as respostas aos atributos são mais importantes que diferenças nas distribuições de atributos. Há, portanto, a possibilidade de se reverter uma parte da desigualdade educacional por meio de políticas educacionais que promovam uma convergência regional na direção das regiões em melhores condições. We analyze the factors determining educational inequalities within and between regions in Brazil. We are interested in how characteristics and the return to these characteristics in each region affect educational outcomes. For this we analyze the population of people aged 14 to 17 years in Brazil using PNAD data. By decomposing inequality in the effect of observed attributes, return to these attributes and residuals from the linear regressions used for prediction, we conclude that differences in the returns to the attributes are more important to inequality than differences in the distributions of attributes. Therefore, it is possible to reduce at least part of regional inequalities by means of educational policies if education in the worst off regions improves in the direction of the better off regions.
    Date: 2013–10

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