nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒05‒17
fifteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Agglomeration effects of inter-firm backward and forward linkages: evidence from Japanese manufacturing investment in China By Kentaro Nakajima, Toshiyuki Matsuura, Nobuaki Yamashita
  2. Regional Unemployment Structure and New Firm Formation By David B. Audretsch; Dirk Christian Dohse; Annekatrin Niebuhr
  3. The migration network effect on international trade By Rodolfo Metulini; Paolo Sgrignoli; Stefano Schiavo; Massimo Riccaboni
  4. Access to universities’ public knowledge: Who’s more regionalist? By Acosta,Manuel; Azagra-Caro,Joaquín M.; Coronado,Daniel
  5. Disentangling the pattern of geographic concentration in Tunisian manufacturing industries By Ayadi, Mohamed; Mattoussi, Wided
  6. Growth of the urban shadow, spatial distribution of economic activities and commuting by workers in rural and Urban India By Ajay Sharma; S Chandrasekhar
  7. How Does Agglomeration Promote the Product Innovation of Chinese Firms? By ZHANG Hong-yong
  8. Tax Competition with Heterogeneous Firms By Richard E. Baldwin; Toshihiro Okubo
  9. Location decisions of natural gas extraction establishments: a smooth transition count model approach By Brown, Jason; Lambert, Dayton
  10. Job Displacement and the Duration of Joblessness: The Role of Spatial Mismatch By Fredrik Andersson; John C. Haltiwanger; Mark J. Kutzbach; Henry O. Pollakowski; Daniel H. Weinberg
  11. Productivity-enhancing manufacturing clusters: Evidence from Vietnam By Howard, Emma; Newman, Carol; Rand, John; Tarp, Finn
  12. Clustering, competition, and spillover effects: Evidence from Cambodia By Chhair, Sokty; Newman, Carol
  13. Regional integration in Africa: Challenges and prospects By de Melo, Jaime; Tsikata, Yvonne
  14. Adaptations of Conventional Spatial Econometric Models to Count Data By Brännäs, Kurt
  15. Cultural Offer and Distance in a Spatial Interaction Model for Tourism By R. Patuelli; M. Mussoni; G. Candela

  1. By: Kentaro Nakajima, Toshiyuki Matsuura, Nobuaki Yamashita
    Abstract: This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995-2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive.
    JEL: F23 L22 R3
    Date: 2014
  2. By: David B. Audretsch; Dirk Christian Dohse; Annekatrin Niebuhr
    Abstract: Does regional unemployment increase or rather decrease entrepreneurial activity? Although this question has been hotly debated among researchers for decades the answers yielded so far are ambiguous and inconclusive. The paper proposes an innovative approach that takes not only interregional differences in unemployment rates, but also in unemployment duration and the human capital of the unemployed—i.e. in the structure of regional unemployment—into account. Both, the skill structure of the unemployed and the share of long-term unemployment are found to have an important impact on regional start-up activity. Moreover, the impact of unemployment structure on new firm formation is found to vary with the knowledge-intensity of the start-ups
    Keywords: regional unemployment, new business formation, skill structure, long-term unemployment
    JEL: M13 R12 J64
    Date: 2014–05
  3. By: Rodolfo Metulini (IMT Lucca Institute for Advanced Studies); Paolo Sgrignoli (IMT Lucca Institute for Advanced Studies); Stefano Schiavo (Department of Economics and Management, University of Trento); Massimo Riccaboni (IMT Lucca Institute for Advanced Studies)
    Abstract: This paper studies the relationship between migration and trade, with the aim of measuring both direct and indirect network effects. We analyze trade of diferentiated and homogeneous goods using an econometric approach inspired by spatial econometrics, proposing a new way to define country neighbors based on the most intense links in the migration network. We find that migration significantly affects trade across categories both in direct and in indirect way. The indirect impact highlights a stronger competitive effect of third country migrants for homogeneous goods. We also confirm that the effect of migration channels is higher on differentiated goods.
    Keywords: Trade; Migration; Gravity model; Spatial econometrics, Networks
    JEL: F14 F22 C21
    Date: 2014–05
  4. By: Acosta,Manuel; Azagra-Caro,Joaquín M.; Coronado,Daniel
    Abstract: This paper tracks university-to-firm patent citations rather than the more usual patent-to-patent or paper-to-patent citations. It explains regional and non-regional citations as a function of firms’ absorptive capacity and universities’ production capacity in the region rather than explaining citations as a function of distance between citing and cited regions. Using a dataset of European Union regions for the years 1997-2007, we find that fostering university R&D capacity increases the attractiveness of the local university’s knowledge base to firms in the region, but also reduces wider searches for university knowledge. Increasing the absorptive capacity of local business encourages firms to access university knowledge from outside the region.
    Keywords: Knowledge flows, patent citations, spillovers, regions
    JEL: O31 O33 R12
    Date: 2014–05–15
  5. By: Ayadi, Mohamed; Mattoussi, Wided
    Abstract: In this paper, we examine the pattern of spatial concentration of manufacturing industries observed in Tunisia and explore the factors driving firms. choices of location at the provincial level. We consider specialization and competition indicators as the
    Keywords: industrial concentration, concentration index, competition index, Tunisia
    Date: 2014
  6. By: Ajay Sharma (Indira Gandhi Institute of Development Research); S Chandrasekhar (Indira Gandhi Institute of Development Research)
    Abstract: Unlike migration, scant attention has been paid to the phenomenon of commuting by workers in developing countries. This paper fills this gap by using a nationally representative data set from India to analyze factors that affect the decision of workers to commute across rural and urban areas daily. Our results suggest that regions with large peripheral urban areas or concentration of secondary sector jobs are more likely to have commuting workers. Regional rural and urban unemployment rates and rural-urban wage differentials are important push and pull factors in the decision to commute.
    Keywords: Commuting, Peri-urban areas, Spatial distribution of economic activities, Urbanization, Rural-urban interaction, India
    JEL: R11 R23 J21
    Date: 2014–04
  7. By: ZHANG Hong-yong
    Abstract: This study empirically analyzes the effect of agglomeration economies on firm-level product innovation (new products), using Chinese firm-level data from 1998 to 2007. In terms of new product introduction and new product output, Chinese firms benefit from urbanization economies (as measured by the number of workers in other industries in the same city and by the diversity of industries in the same city). Conversely, there were no positive effects of localization economies (as measured by the number of other workers working for neighboring firms in the same industry and in the same city). These results suggest that, in China, urbanization economies play an important role in fostering product innovation by urban size and diversity.
    Date: 2014–05
  8. By: Richard E. Baldwin; Toshihiro Okubo
    Abstract: This paper studies tax competition in an economic geography model that allows for agglomeration economies with trade costs and heterogeneous firms. We find that the Nash equilibrium involves the large country charging a higher tax than the small nation, with this rate being too low from a social point of view. Lower trade costs lead to an intensification of competition, a drop in Nash tax rates, and a narrowing of the gap. Since large, productive firms are naturally more sensitive to tax differences in our model, large firms are the crux of tax competition in our model. This also means that tax competition has consequences for the average productivity of the big and small nations‟ industry; by lowering tax rates, the small nation can attract high-productivity firms.
    Keywords: firm heterogeneity, spatial sorting, Nash equilibrium tax, tax cooperation, average productivity
    JEL: H32 P16
    Date: 2014–05
  9. By: Brown, Jason (Federal Reserve Bank of Kansas City); Lambert, Dayton
    Abstract: The economic geography of the United States' energy landscape changed rapidly with domestic expansion of the natural gas sector. Recent work with smooth transition parameter models is extended to an establishment location model estimated using Poisson regression to test whether expansion of this sector, as evidenced by firm location decisions from 2005 to 2010, is characterized by different growth regimes. Results suggest business establishment growth of firms engaged in natural gas extraction was faster when the average area of shale and tight gas transition coverage in neighboring counties exceeded 17%. Local agglomeration externalities, access to skilled labor and transportation infrastructure were of more economic importance to location decisions in the high growth regime. Accordingly, growth rates were heterogeneous across the lower 48 States, suggesting potentially different outcomes with respect to local investment decisions supporting this sector.
    Keywords: Natural gas extraction; Location choice; Count model; Endogenous growth regimes; Spatially varying parameters
    Date: 2014–04–01
  10. By: Fredrik Andersson; John C. Haltiwanger; Mark J. Kutzbach; Henry O. Pollakowski; Daniel H. Weinberg
    Abstract: This paper presents a new approach to the measurement of the effects of spatial mismatch that takes advantage of matched employer-employee administrative data integrated with a person-specific job accessibility measure, as well as demographic and neighborhood characteristics. The basic hypothesis is that if spatial mismatch is present, then improved accessibility to appropriate jobs should shorten the duration of unemployment. We focus on lower-income workers with strong labor force attachment searching for employment after being subject to a mass layoff – thereby focusing on a group of job searchers that are plausibly searching for exogenous reasons. We construct person-specific measures of job accessibility based upon an empirical model of transport modal choice and network travel-time data, giving variation both across neighborhoods in nine metropolitan areas, as well as across neighbors. Our results support the spatial mismatch hypothesis. We find that better job accessibility significantly decreases the duration of joblessness among lower-paid displaced workers. Blacks, females, and older workers are more sensitive to job accessibility than other subpopulations.
    JEL: J64 R23 R41
    Date: 2014–04
  11. By: Howard, Emma; Newman, Carol; Rand, John; Tarp, Finn
    Abstract: In this paper we explore the extent to which firms experience productivity spillovers from clustering using a rich data source from Vietnam for 2002 to 2007, a period of significant transition. We address issues of simultaneity, self-selection and endogen
    Keywords: clustering, productivity, endogenous location choice, spillovers, Vietnam
    Date: 2014
  12. By: Chhair, Sokty; Newman, Carol
    Abstract: The potential benefits of the geographical clustering of economic activity have been well documented in the literature, yet there is little empirical evidence quantifying these effects in developing country contexts. This is surprising given the emphasis
    Keywords: clustering, productivity spillovers, competition effects, informal firms, Cambodia
    Date: 2014
  13. By: de Melo, Jaime; Tsikata, Yvonne
    Abstract: Political motives, geography, and the uneven distribution of gains trumped the traditional efficiency gains across Africa.s Regional Economic Communities (RECs). The small, sparsely populated, fragmented, and often isolated economies across Africa make a
    Keywords: regional integration, Africa, trade creation, trade diversion, Franc zone, trade liberalization
    Date: 2014
  14. By: Brännäs, Kurt (Department of Economics, Umeå School of Business and Economics)
    Abstract: The paper suggests and studies count data models corresponding to previously studied spatial econometric models for continuous variables. A novel way of incorporating spatial weights is considered for both time and space dynamic models with or without simultaneity. The paper also contains a brief discussion about estimation issues.
    Keywords: Integer-valued; Space; Time; Regional; Thinning; Estimation
    JEL: C31 C32 C51 R12 R15 R23
    Date: 2014–05–06
  15. By: R. Patuelli; M. Mussoni; G. Candela
    Abstract: Culture is more and more considered as an important driver of tourism. However, it is critical, for policymakers, to evaluate the potential returns from investments in culture and generally cultural offer, in particular in multiregion settings with a potentially inefficient distribution of cultural offer. Our paper focuses on the role of distance (between the tourist’s origin and destination regions) in mediating the tourism impact of cultural offer. This research question is investigated by means of a spatial interaction model, applied to the case of Italian domestic tourism. We find that distance indeed matters: a destination’s endowment in culture appears to be more attractive for long-distance tourists, while an origin region’s endowment seems to dinsincentivate long-distance trips to a greater extent.
    JEL: C23 L83 R12 Z10
    Date: 2014–05

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