nep-geo New Economics Papers
on Economic Geography
Issue of 2013‒11‒22
eighteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Proximity strategies in outsourcing relations: the role of geographical, cultural and relational proximity in the European automotive industry. By Schmitt, Alexander; Van Biesebroeck, Jo
  2. Knowledge spillover effects at the sub-regional level. Theory and estimation By Andrea Bonaccorsi; Cinzia Daraio
  3. Industrial Clusters and Economic Performance in Brazil By Jose Claudio Pires; Tulio Cravo; Simon Lodato; Caio Piza
  4. Network structural properties for cluster long run dynamics. Evidence from collaborative R&D networks in the European mobile phone industry By Joan Crespo; Raphaël Suire; Jérôme Vicente
  5. What types of firms tend to be more innovative: A study on Germany By Stephan Brunow; Valentina Nafts
  6. Establishments' and Regions' Cultural Diversity as a Source of Innovation: Evidence from Germany By Stephan Brunow; Bastian Stockinger
  7. FDI, trade costs and regional asymmetries By Julia Darby; Ben Ferrett; Ian Wooton
  8. Growth, geography, and the iron law: Understanding divergence across Indian districts By Samarjit Das; Chetan Ghate; Peter E. Robertson
  9. Resetting the Urban Network: 117-2012 By Ferdinand Rauch; Guy Michaels
  10. Housing Tenure and Geographical Mobility in Belgium By D. ISEBAERT
  11. The ripple effect and the linguistic border in Belgium: a country devided. By Buyst, Erik; Helgers, Roel
  12. Creating New Opportunities for Rural Producers. Impact Evaluation of a Pilot Program in Colombia By Sandra Rozo; Yuri Suarez Dillon Soares; Veronica Gonzalez Diez; Carlos Morales
  13. Amerisclerosis? The Puzzle of Rising U.S. Unemployment Persistence By Coibion, Olivier; Gorodnichenko, Yuriy; Koustas, Dmitri
  14. Spatial correlation in credit risk and its improvement in credit scoring By Fernandes, Guilherme Barreto; Artes , Rinaldo
  15. Model uncertainty in matrix exponential spatial growth regression models By Manfred M. Fischer; Philipp Piribauer
  17. Simuler les politiques locales favorisant l'accessibilité à l'emploi By Mathieu Bunel; Elisabeth Tovar
  18. Redefiniendo ciudades By Francisco José Goerlich Gisbert; Isidro Cantarino Martí

  1. By: Schmitt, Alexander; Van Biesebroeck, Jo
    Abstract: Trends towards international fragmentation of production and modular process technologies have increased the importance of proximity in the supply chain of sophisticated manufactured goods. Using a rich and novel data set for the European automotive industry, we simultaneously evaluate the relative importance of geographical, cultural and relational proximity in sourcing strategies. The estimates indicate that each dimension provides an independent benefit and also which measures have the largest relative importance. We also find that the positive effects attributed to some measures reflect past relationships rather than predict new ones. In particular, co-location and a low cultural distance should be interpreted as outcomes of a sourcing strategy, not as predictors for sourcing success. We investigate to what extent firms from different countries follow different strategies and which choices suppliers can make to boost their attractiveness as outsourcing partner.
    Date: 2013–02
  2. By: Andrea Bonaccorsi (Department of Energy and Systems Engineering, University of Pisa, Italy); Cinzia Daraio (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza")
    Abstract: In this paper, we investigate a new approach for the measurement of spillovers. The concept of spillovers is central in many theories of geography, innovation and growth, particularly at the regional level. We evaluate the impact of size and intensity of knowledge production, as observed in publications and patents at the sub-regional level, on the efficiency of manufacturing activity. We employ nonparametric and robust conditional measures in efficiency analysis to a unique dataset at the subregional level (province) for Italy. We find that most Italian provinces are located in a region of absence or extremely low impact of knowledge spillovers. Nevertheless, a few provinces with maximum volume in both patents and publications and some medium-sized provinces with high knowledge intensity show knowledge spillovers.
    Keywords: knowledge spillovers, manufacturing industry, growth, efficiency analysis, conditional efficiency, robust nonparametric estimation
    Date: 2013
  3. By: Jose Claudio Pires; Tulio Cravo; Simon Lodato; Caio Piza
    Abstract: Industrial clusters, which are commonly targeted to receive financial support allocated to locally based development projects, are seen as an effective industrial policy tool for improving productivity and generating employment. Nevertheless, identifying clusters and assessing their economic performance is a challenge for policymakers. This paper aims to address this challenge by identifying the location of clusters based on neighbor relationships and specialization in Brazil and providing some insights on their effects on employment generation. The paper uses both Location Quotient and Local Indicator of Spatial Association to identify potential clusters in 27 industrial sectors in 5564 Brazilian municipalities. In addition, it uses annual municipal panel data for 2006-2009 to assess whether the presence of potential clusters is correlated with employment generation. The results show that clusters located in municipalities whose neighbors have similar industrial structures perform better than those that present industry specialization only.
    Keywords: Industrial cluster, regional economic development, spatial independence
    JEL: C0 R11 R12
    Date: 2013–10
  4. By: Joan Crespo; Raphaël Suire; Jérôme Vicente
    Abstract: In a recent literature, the structural properties of knowledge networks have been pointed out as a critical factor for cluster structural changes and long run dynamics. Mixing evolutionary economic geography and network-based approach of clusters, this contribution aims at capturing and discussing the particular influence of hierarchy (degree distribution) and assortativity (degree correlation) in the innovative capabilities of clusters along the industry life cycle. We test our propositions in the field of the mobile phone industry in Europe from 1988 to 2008. We use EPO PATSTAT and OECD REGPAT to capture cluster trends, and R&D relations from European Framework Programs to capture knowledge networks and their evolving structural properties. Our findings provide new insights to understand the organization of clusters over time in order to perform along the industry life cycle.
    Keywords: smart specialization, constructing regional advantage, Regional Cohesion Policy
    JEL: D85 L63 O33 R11
    Date: 2013–11
  5. By: Stephan Brunow (Institute for Employment Research (IAB)); Valentina Nafts (Institute for Employment Research (IAB))
    Abstract: Innovation is a key driver of technological progress and growth in a knowledge-based economy. There are various motives for individual firms to innovate: improving quality secures market leadership, introducing new products leads the firm into new markets, adopting new technologies could be seen as a catch-up strategy within an industry or an improvement of the firm’s own products when the technology adopted is based on ideas from other industries. Firms can perform innovation activities in one or more of these areas or in none of them. We therefore raise the question of what types of firms tend to be more innovative, i.e. which firms innovate in more of these areas. For this purpose we employ firm-level survey data and combine it with administrative data from Germany’s social security system. An ordered logit model is estimated using a variety of characteristics which describe the workforce employed and other firm-related variables, the regional environment where the firm is located, as well as industry and region fixed effects.
    Keywords: firm innovation, labor diversity, ordered logit
    JEL: J44 O31 R12
    Date: 2013–11
  6. By: Stephan Brunow (Institute for Employment Research (IAB); Bastian Stockinger (Otto-Friedrich University of Bamberg)
    Date: 2013–11
  7. By: Julia Darby (Department of Economics, University of strathclyde); Ben Ferrett (Loughborough University); Ian Wooton (Department of Economics, University of Strathclyde)
    Abstract: We set up a trade model where three countries compete for an exogenous number of firms. Our innovation lies in the geography of the model. Of the three countries, one is the hub through which all trade takes place. First, we establish the natural geography of the region, which is given by the equilibrium distribution of industrial activity in the absence of taxes or subsidies. We then examine the implications for corporate taxes when the countries compete with each other to attract firms. We find that, even when all countries are the same size, the centrality of the hub gives it an advantage in tax setting, such that its equilibrium tax can be larger than that of the spokes and yet it still attracts a disproportionate share of industry. Thus geographic advantage in tax competition has a second dimension, centrality in addition to size.
    Keywords: Corporate taxes, devolution, trade costs
    JEL: F15 F23 H25 H73
    Date: 2013–11
  8. By: Samarjit Das (Indian Statistical Institute, New Delhi); Chetan Ghate (Indian Statistical Institute, New Delhi); Peter E. Robertson (University of Western Australia)
    Abstract: The existing literature on Indian growth finds no evidence of B convergence across states. This represents a puzzle given the relatively free flows of capital, labour and commodities across state borders. We use a new data set to estimate convergence rates across 575 Indian districts and find that the pattern of absolute B- divergence remains. To explain this we develop a model of conditional convergence that includes a gravity indicator of trade and migration costs - specifically the distance from a major metropolitan center - as a conditioning variable. We find strong evidence of conditional convergence with an elasticity close to Barro's "iron law". We also find that geography and public infrastructure variables are important conditioning variables.
    Keywords: Convergence, Divergence, Indian Economic Growth, Gravity Models
    JEL: O4 O5
    Date: 2013–05
  9. By: Ferdinand Rauch; Guy Michaels
    Abstract: Do locational fundamentals such as coastlines and rivers determine town locations, or can historical events trap towns in unfavorable locations for centuries?� We examine the effects on town locations of the collapse of the Western Roman Empire, which temporarily ended urbanization in Britain, but not in France.� As urbanization recovered, medieval towns were more often found in Roman-era town locations in France than�in Britain, and this difference still persists today.� The resetting of Britain's urban network gave it better access to naturally navigable waterways when this was important, while many French towns remained without such access.
    Keywords: Economic Geography, Economic History, Path Dependence, Transportation
    JEL: R11 N93 O18
    Date: 2013–11–19
  10. By: D. ISEBAERT
    Abstract: Housing tenure is a key determinant of geographical mobility. We estimate several probit models to explain the probability that households move, using Belgian longitudinal PSBH and EU-SILC datasets which together cover the period 1994-2009. We confirm the general conclusion in previous literature, that homeowners are, ceteris paribus, less mobile than tenants. Within the first category, having a mortgage further hampers mobility. Earlier results for Belgium did not find a significant difference between outright owners and mortgagees. Furthermore, we make progress on the existing literature by paying particular attention to (and dealing with) methodological issues such as unobserved heterogeneity and state dependence. However, we also obtain some indications that the strict exogeneity assumption may be violated, implying that we cannot exclude the possibility of some bias in our estimated coefficients.
    Keywords: Housing tenure, geographical mobility, Belgian households, panel data
    JEL: R21 R23
    Date: 2013–10
  11. By: Buyst, Erik; Helgers, Roel
    Abstract: A large literature has emerged, especially in the UK, that investigates regional convergence of house prices. Many authors have found regional house prices to be converging in the long-run and exhibit a distinct spatial pattern over time, which has become known as the ripple eect hypothesis. In this paper we examine the validity of the ripple eect hypothesis for Belgium and are particularly interested in the role of the linguistic border in the spatial and temporal propagation of shocks in a dynamic system. We extend the model that was recently proposed by Holly et al. (2011) to cope with the unique federal structure of Belgium and use data at the level of the judicial districts (N = 20) for an extensive time period (1973Q1-2011Q3, T = 155). We show that the linguistic border plays an ambiguous role. The results indicate that almost all regional house prices are converging in the long-run, which implies that regional markets in Belgium are integrated. We furthermore show that house prices in regions which are located along the north-south axis in Belgium, which constitutes the economic spine of Belgium, converge more quickly with respect to house prices in the dominant region, Antwerp. This result suggests that the linguistic border plays no signicant role in the house price diusion process. After this initial error correction mechanism, however, the convergence process follows a distinct linguistic pattern (east-west axis) where regions converge only with respect to neighboring regions that are located within the same linguistic region. Moreover, short-run spatial spill-overs are signicant for nearly all neighboring regions that lie within the same linguistic area, but nearly nonexistent for neighboring regions across the linguistic border. Finally, we provide evidence for the ripple eect hypothesis in Belgium.
    Date: 2013
  12. By: Sandra Rozo (Deaprtment of Economics, University of California Los Angeles, Los Angeles, USA); Yuri Suarez Dillon Soares (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA); Veronica Gonzalez Diez (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA); Carlos Morales (Office of Evaluation and Oversight, Inter-American Development Bank, Washington, USA)
    Abstract: Industrial clusters are commonly targeted to receive financial support allocated to local-based development projects. Cluster promotion is seen as an effective industrial policy tool aimed at improving productivity and employment generation. Nevertheless, despite its popularity as a regional development policy, identifying and assessing the economic performance of clusters is still a challenge for policy makers. The objective of this paper is twofold: identify the location of clusters in Brazil; and provide some insights of its effect on employment generation. This paper uses three measures of identification to test whether the correlation between clusters and economic performance depends on the way clusters are identified. Noticeably, the existing literature on clusters’ identification in Brazil ignores possible spatial dependence. To address this gap in the literature, this paper draws on Carroll et al. (2008) and uses Location Quotient (LQ) and Local Indicator of Spatial Association (LISA) simultaneously to identify potential clusters in Brazil in 27 industrial sectors and using a comprehensive census data of the formal sector covering 5564 Brazilian municipalities. In addition, the paper uses an annual municipal panel data for the period 2006-2009 to assess whether the presence of clusters is correlated to superior economic performance, particularly employment generation. The results show that potential clusters are correlated with better economic performance, however, different types of agglomerations present different association with economic performance. Firstly, municipalities in specialized clusters (SR) perform poorly in terms of employment generation. Secondly, the results suggest that clusters of municipalities with neighbors with similar industrial structure (Periphery Regions and Potential Cluster Region) perform much better than those that only present industry specialization (SR) and are not close to similar municipalities.
    Keywords: Drug Production, Productivity, Latin America
    JEL: O13 O33 O54 Q18
    Date: 2013–09
  13. By: Coibion, Olivier (University of Texas at Austin); Gorodnichenko, Yuriy (University of California, Berkeley); Koustas, Dmitri (University of California, Berkeley)
    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.
    Keywords: unemployment persistence, labor mobility, trust, demographics
    JEL: E24 E32 E52 J64 R11 R23
    Date: 2013–11
  14. By: Fernandes, Guilherme Barreto; Artes , Rinaldo
    Date: 2013–10
  15. By: Manfred M. Fischer (Department of Socioeconomics, Vienna University of Economics and Business); Philipp Piribauer (Department of Economics, Vienna University of Economics and Business)
    Abstract: This paper considers the problem of model uncertainty associated with variable selection and specification of the spatial weight matrix in spatial growth regression models in general and growth regression models based on the matrix exponential spatial specification in particular. A natural solution, supported by formal probabilistic reasoning, is the use of Bayesian model averaging which assigns probabilities on the model space and deals with model uncertainty by mixing over models, using the posterior model probabilities as weights. This paper proposes to adopt Bayesian information criterion model weights since they have computational advantages over fully Bayesian model weights. The approach is illustrated for both identifying model covariates and unveiling spatial structures present in pan-European growth data.
    Keywords: model comparison, model uncertainty, spatial Durbin matrix exponential growth models, spatial weight structures, European regions
    JEL: C11 C21 C52 O47 O52 R11
    Date: 2013–10
  16. By: Yasumasa Matsuda
    Abstract: This paper considers analysis of nonstationary irregularly spaced data that may have multivariate observations. The nonstationarity we focus on here means a local dependency of parameters that describe covariance structures. Nonparametric and parametric ways to estimate the local dependency of the parameters are proposed by an extension of traditional periodogram for stationary time series to that for nonstationary spatial data We introduce locally stationary processes for which consistency of the estimators are proved as well as demonstrate empirical efficiency of the methods by simulated and real examples.
    Date: 2013–05
  17. By: Mathieu Bunel (University of Caen Basse-Normandie, CREM CNRS UMR 6211 and TEPP (FR CNRS n°3435)); Elisabeth Tovar (Université Paris Ouest Nanterre La Défense et EconomiX (UMR CNRS 7235)
    Abstract: Cet article présente le modèle SIGMAP (schémas et indicateurs géolocalisés issus de microsimulations appliquées aux politiques publiques) qui permet de caractériser et d'identifier les différences d'accès à l'emploi d'une population donnée en tenant compte des écarts d'employabilité, de congestion, des effets de frontières et de compétition entre les zones géographiques. Nous utilisons cet outil pour simuler et comparer les effets de quatre types de politiques publiques locales : développement des emplois locaux, de l'employabilité, de la mobilité et de la relocalisation des travailleurs.
    Keywords: accès local à l'emploi, données géo-référencées, GIS, Île-de-France, microsimulation, politiques de l'emploi, spatial mismatch
    JEL: R11 J61
    Date: 2013–11
  18. By: Francisco José Goerlich Gisbert (Instituto Valenciano de Investigaciones Económicas); Isidro Cantarino Martí (Dpto. Ingeniería del Terreno)
    Abstract: This paper presents an exercise in the definition of cities from clear and explicit quantitative criteria. The city concept is linked to the local political level, so in this sense we can talk about “administrative cities”, since they are formed by one municipality, or a group of them that are physically contiguous. They are not pure population agglomerations satisfying certain criteria in terms of exceeding a threshold and/or a minimum density. We start from these urban agglomerations, called urban centers, but eventually we link them to municipalities. The main limitations of our analysis are two; on the one hand, our analysis is purely demographic, in the sense that it is the population concentration that eventually determines the number and extend of cities, other aspects such as land cover or the economic structure is absent from our analysis. On the other hand, the commuting has not been taken into account, given lack of data up to date information, and since our focus is more related to the urban core without taking into consideration functional relations. In this sense, our proposal is in line with the urban core concept, more than with the urban areas or larger urban zones that includes the urban core and its hinterland. Building urban centers and linking them to municipalities is accomplished by means of simple Geographical Information System operations (GIS). Este trabajo presenta un ejercicio de definición de ciudades a partir de unos criterios cuantitativos claros y explícitos. El concepto de ciudad se vincula a los centros de decisión a nivel local, es decir se trata de “ciudades administrativas” en el sentido de que están constituidas por un municipio o agrupación de municipios físicamente contiguos. No se trata de aglomeraciones puras de población, que satisfacen ciertos criterios de densidad y volumen mínimo, sino que, partiendo de estas aglomeraciones, a las que denominaremos centros urbanos, se las vincula a los municipios a partir de reglas prefijadas. Las limitaciones principales de nuestro trabajo son dos; por una parte el enfoque es únicamente demográfico, es decir es la concentración de población la que acaba determinando las ciudades, mientras que otros aspectos, como las coberturas del suelo y la estructura productiva quedan al margen. Por otra parte, la movilidad intra-día (commuting) no es considerad por falta de datos actualizados, y por centrarnos en un concepto no funcional de definición de ciudades. En este sentido, la propuesta de ciudades debe asociarse más con núcleos urbanos que con las grandes áreas urbanas que incluyen el núcleo urbano y su radio de influencia. La generación de centros urbanos, y la vinculación de estos con la definición de las ciudades se realizan mediante simples operaciones en el contexto de los Sistemas de Información Geográfica (SIG).
    Keywords: Rejillas de población, núcleos urbanos, ciudades, demografía Population grids, urban areas, cities, demography
    JEL: R12 R14 R52
    Date: 2013–08

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