nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒05‒24
thirteen papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Regionalization vs. Globalization By Hideaki Hirata; M. Ayhan Kose; Chris Otrok
  2. Are automotive Global Production Networks becoming more global? Comparison of regional and global integration processes based on auto parts trade data By Vincent FRIGANT; Martin ZUMPE
  3. “Factor Accumulation, Externalities and Absorptive Capacity in Regional Growth: Evidence from Europe” By Juan Jung; Enrique López-Bazo
  4. Co-evolutionary patterns in regional knowledge bases and economic structure: evidence from European Regions By Francesco Quatraro
  5. Trade and Cities By Cem Karayalcin; Hakan Yilmazkuday
  6. The Sources of the Urban Wage Premium by Worker Skills By Andersson, Martin; Klaesson , Johan; Larsson , Johan P
  7. Industrial Clusters and Economic Performance in Brazil By Jose Claudio Linhares Pires; Tulio Cravo; Simon Lodato; Caio Piza
  8. Determinants of self-employment among commuters and non-commuters By Backman, Mikaela; Karlsson, Charlie
  9. Urban Structure and Environmental Externalities By Regnier Camille; Sophie Legras
  10. Penetration of MFIs among Indian States: An Understanding Through Macro Variables By Sougata Ray; Sushanta Kumar Mahapatra
  11. A Spatial Model of Perfect Competition By Dimitrios Xefteris; Nicholas Ziros
  12. On Stable Equilibria in Discrete-Space Social Interaction Models By Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
  13. Regionale Beschäftigungswirkungen von öffentlichen Investitionen in Straßen- und Schieneninfrastruktur By Hirte, Georg; Stephan, Andreas

  1. By: Hideaki Hirata; M. Ayhan Kose; Chris Otrok
    Abstract: Both global and regional economic linkages have strengthened substantially over the past quarter century. We employ a dynamic factor model to analyze the implications of these linkages for the evolution of global and regional business cycles. Our model allows us to assess the roles played by the global, regional, and country-specific factors in explaining business cycles in a large sample of countries and regions over the period 1960–2010. We find that, since the mid-1980s, the importance of regional factors has increased markedly in explaining business cycles especially in regions that experienced a sharp growth in intra-regional trade and financial flows. By contrast, the relative importance of the global factor has declined over the same period. In short, the recent era of globalization has witnessed the emergence of regional business cycles.
  2. By: Vincent FRIGANT; Martin ZUMPE
    Abstract: In this paper, we examine the evolution of international exchanges of auto parts over the 2000-2012 period. The first part of our study proposes an analysis of the organisation of automotive supply chains based on the global production networks framework. We give details about this approach by stating the nature of trade flows that occur in these networks, and by highlighting the importance of intra-firms flows. The second part poses the question of reasons for an eventual increase of intercontinental flows at the expense of intra-continental flows. In the third part, we evaluate the assumptions made in this context. On the basis of Chelem data about auto parts exchanges, we examine in a comparative way the evolution of intra-continental and intercontinental flows for nine zones of regional integration that cover the world’s entire set of countries. Our results highlight the heterogeneity of situations and of trajectories in the different zones. We explain this state of affairs by the history and the trajectory of the industrial actors, by institutional opportunities/constraints, and by the balance of power between the industries engaged in the setting up of automotive production networks.
    Keywords: Global Production Networks; Automotive; Auto parts industry; Globalisation; Regionalisation; International economics
    JEL: F14 F15 F23 R12 L62
    Date: 2014
  3. By: Juan Jung (Faculty of Economics, University of Barcelona); Enrique López-Bazo (Faculty of Economics, University of Barcelona)
    Abstract: This paper proposes a model which incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive abilities. This model is estimated using a sample of 215 European NUTS2 regions, before and after the 2004 enlargement of the single??market area. Results confirm the relevance of local absorptive capacities, as are found to be directly linked with the process of making the most of externalities. More than that, capital accumulation externalities do not seem to take place in absence of local capabilities. The process of capital deepening which took place in the period reduced the role of capital in explaining the productivity gap among regions, but so far has not been enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.
    Keywords: Regional Disparities, Absorptive Capacity, Technological Interdependence, Spatial Econometrics. JEL classification: C21, O10, R11
    Date: 2014–05
  4. By: Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: This paper presents an analysis of the co-evolutionary patterns of structural change in knowledge and economics. The former is made operational through an analysis of co-occurrences of technological classes in patent documents in order to derive indicators of coherence, variety and cognitive distance. The latter, on the other hand, is made operational in a synthetic way by implementing shift share analysis which decomposes labour productivity growth into effects caused by changes in the allocation of employment, those ascribed to intra-sector productivity growth and those caused by interaction of these two components. The results of the analysis conducted on a sample of 227 European regions show that increasing variety is associated with the reallocation of workforce across sectors whereas within sector productivity is associated with high levels of both coherence and cognitive distance of the regional knowledge base.
    Keywords: Recombinant Knowledge, Coherence, Variety, Regional Structural Change, Shift Share Analysis
    Date: 2013–11–04
  5. By: Cem Karayalcin (Department of Economics, Florida International University); Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: Many developing countries display remarkably high degrees of urban concentration, incommensurate with their levels of urbanization. The cost of excessively high levels of urban concentration can be very high in terms of overpopulation, congestion, and productivity growth. One strand in the theoretical literature suggests that such high levels of concentration may be the result of restrictive trade policies that trigger forces of agglomeration. Another strand in the literature, however, points out that trade liberalization itself may exacerbate urban concentration by favoring the further growth of those large urban centers that have better access to international markets. The empirical basis for judging this question has so far been weak: in the existing literature, trade policies are poorly measured (or not measured as when trade volumes are used spuriously). Here, we use new disaggregated tariff measures to empirically test the hypothesis. We also employ a treatment-and-control analysis of pre- versus post-liberalization performance of the cities in liberalizing and non-liberalizing countries. We find evidence that, controlling for, among others, largest cities that have ports and, thus, have better access to external markets, liberalizing trade does lead to a reduction in urban concentration. Finally, by using a cross-country level of analysis we provide some external validity to the more careful empirical studies that rely on single country data.
    Date: 2014–05
  6. By: Andersson, Martin (CIRCLE, Lund University); Klaesson , Johan (Department of Economics, Finance and Statistics, Jönköping International Business School); Larsson , Johan P (Department of Economics, Finance and Statistics, Jönköping International Business School)
    Abstract: We estimate the respective importance of spatial sorting and agglomeration economies in explaining the urban wage premium for workers with different sets of skills. Sorting is the main source of the wage premium. Agglomeration economies are in general small, but are larger for workers with skills associated with non-routine job tasks. They also appear to involve human capital accumulation, as evidenced by the change in the wage of workers moving away from denser regions. For workers with routine jobs, agglomeration economies are virtually non-existent. Our results provide further evidence of spatial density bringing about productivity advantages primarily in contexts when problem-solving and interaction with others are important.
    Keywords: spatial sorting; selection; learning; non-routine skills; spatial wage disparities; density; agglomeration economies; innovation
    JEL: J24 J31 R12
    Date: 2014–05–22
  7. By: Jose Claudio Linhares 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 clusters
    Date: 2013–10
  8. By: Backman, Mikaela (Centre for Entrepreneurship and Spatial Economics (CEnSE) Center for Science and Innovation Studies (CESIS), Jönköping International Business School, Jönköping, Sweden); Karlsson, Charlie (Centre for Entrepreneurship and Spatial Economics (CEnSE) Center for Science and Innovation Studies (CESIS), Jönköping International Business School, Jönköping, Sweden)
    Abstract: In this paper, we analyse the determinants of the decision to become self-employed among commuters and non-commuters. In the entrepreneurship literature it is claimed that the rich-ness and quality of an individual’s business, professional and social networks play an im-portant role for the decision to become self-employed. People that commute between localities in the same region or between localities in different regions will most proba¬bly be able to develop richer personal networks than non-commuters, since they can develop network links both in the locality where they live and in the locality where they work. In this paper, we test this hypothesis using micro-data for around three million individuals in Sweden. As far as we know, this is the first time this hypothesis is tested. In our empirical analysis, we make a distinction between three groups of individuals: non-com¬muters, intra-regions commuter and inter-region commuters. For each of this groups we test how the probability of becoming self-employed is influenced by a number of characteristics of individuals, characteristics of home and work localities and regions. Our results indicate a significant difference between non-commuters and commuters in terms of the role of networks for becoming self-employed. On the one hand, we find for non-commuters that living and working in a locality with rich business networks reduce the probability of becoming self-employed. For commuters, on the other hand we find that working in a locality with rich business networks increase the probability to become self-employed. In this latter case, living in a municipality with rich business networks has a non-significant effect on the probability of becoming self-employed. Our results indicate that it is the business networks where people work, rather than where they live that exerts a positive influence on the probability of becoming self-employed.
    Keywords: entrepreneurship; individual attributes; regional attributes; networks; micro-level data
    JEL: C21 J24 L26 R12
    Date: 2014–05–21
  9. By: Regnier Camille; Sophie Legras
    Abstract: The objective of this paper is to analyze policy design for air pollution management in the spatial context of urban development. We base our analysis on the paper of Ogawa and Fujita (1982), which offers a proper theoretical framework of non-monocentric urban land use using static microeconomic theory where the city structure is endogenous. First, we show that when households internalize industrial pollution in their residential location choice, spatialization within the city is reinforced. This impacts directly the emissions of greenhouse gases from commuting. Then, we analyze policy instruments in order to achieve optimal land use pattern when the policy maker has to manage both industrial and commuting related polluting emissions, that interact through the land market.
    Keywords: Environmental externalities, Land use pattern, Air pollution
    JEL: Q53 D62 R14
    Date: 2014–05–05
  10. By: Sougata Ray (cef.up, University of Porto, Portugal and Amrita School of Business, Coimbatore, India); Sushanta Kumar Mahapatra (Department of Economics, University of Bologna, Bologna, Italy and Amrita School of Business, Amrita University, Coimbatore, India)
    Abstract: The Indian Microfinance Industry witnessed one of the fastest growths in the recent times. However, the sticking feature of the growth is that the Microfinance Institutions (MFIs) are concentrated in only some regions of the country. There is a huge geographical skew in the distribution of the MFIs. In this paper an attempt has been made to explain these geographical skew by using the macro variables at the state levels. The purpose of this study is to identify the causes for the regional disparity of the growth of MFIs. The analysis is likely to help in identifying factors which need attention for developing the MFIs in states which are lagging behind and also in framing necessary regulations which can ensure uniform growth of MFIs among all the states. The study suggests that state level macro factors are significant in explaining the geographical skew. MFIs in India have concentrated in states which are richer, have good rural infrastructure, lack adequate banking facility and have low human capital.
    Keywords: Microfinance Institutions, Penetration, Regional disparity, Macro variables
    JEL: G21 E44 R5 E44
    Date: 2014–05
  11. By: Dimitrios Xefteris; Nicholas Ziros
    Abstract: This paper employs the theory of strategic market games (enhanced with a spatial dimension) in order to study the issue of market location in a perfectly competitive setup. In this framework, each player decides strategically where and what quantities she wishes to trade and, hence, the market structure (or simply the distribution of the active trading posts and prices) emerges endogenously. We conduct a comprehensive analysis for a class of simple games with a continuum of traders and we show that (i) not all market structures can support a Nash equilibrium, (ii) at least some multi-market structures can support a Nash equilibrium and (iii) prices in a multi-market Nash equilibrium, generically, diverge.
    Keywords: Spatial model; Market locations; Strategic market games; Perfect competition.
    Date: 2014–05
  12. By: Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
    Abstract: We investigate the differences and connections between discrete-space and continuous-space social interaction models. Although our class of continuous-space model has a unique equilibrium, we find that discretized models can have multiple equilibria for any degree of discretization, which necessitates a stability analysis of equilibria. We present a general framework for characterizations of equilibria and their stability under a broad class of evolutionary dynamics by using the properties of a potential game. Although the equilibrium population distribution in the continuous space is uniquely given by a symmetric unimodal distribution, we find that such a distribution is not always stable in a discrete space. On the other hand, we also show that any sequence of a discrete-space model's equilibria converges with the continuous-space model's unique equilibrium as the discretization is refined.
    Keywords: Social interaction; Agglomeration; Discrete space; Potential game; Stability; Evolutionary game theory
    JEL: C62 C72 C73 D62 R12
    Date: 2014–05–08
  13. By: Hirte, Georg; Stephan, Andreas
    Abstract: Wir untersuchen mittel- und langfristige regionale Beschäftigungseffekte von Veränderungen der Verkehrsinfrastruktur in den deutschen Kreisen. Dabei stehen die indirekten Effekte der Investitionen im Mittelpunkt, die sich mittelbar über die Wirkung der Veränderungen von Erreichbarkeiten ergeben. Die Erreichbarkeit und ihre Effekte auf die regionale Beschäftigung stehen daher im Fokus der Studie. Erreichbarkeit ist dabei ein Maß für die gewichtete Summe der Transportkosten, die entstehen, wenn eine Region mit allen anderen Regionen wirtschaftliche Interaktionen eingeht, die in ihrem Umfang proportional zur jeweiligen Marktgröße oder Kaufkraft der Quell- und Zielregionen sind. Die Transportkosten werden daher mit der Bevölkerungsgröße oder der wirtschaftlichen Stärke der Regionen, d.h. mit dem Bruttoinlandsprodukt (BIP) gewichtet. Veränderungen der Infrastruktur beeinflussen die Erreichbarkeit dabei über die Veränderung der Transportkosten. Daraus folgt unmittelbar, dass Infrastrukturinvestitionen sehr unterschiedlich auf die Erreichbarkeiten wirken können. Ein Ausbau der Infrastruktur in einer Region, auf wichtigen Verbindungen zu anderen Regionen oder an wichtigen Knoten oder Kanten eines überregional bedeutenden Netzwerkes können die Erreichbarkeit einer Region relativ stark erhöhen, während der Ausbau von Nebenstrecken oder leichte Qualitätsverbesserungen an vorhandenen Strecken erheblich geringere Auswirkungen haben wird... -- Employment effects of infrastructure investment depend in particular on their effect on regional accessibility. Therefore, we examine the impact of accessibility via rail and road on regional employment in German counties (Kreise, NUTS3). According to economic theory an increase in accessibility raises productivity and output. While the first effect lowers employment the latter expands labor demand. It is an empirical question which of both is stronger. The base for the regressions is the employment dynamic approach of Combes et al. (2004) which we adjust to our purpose and extend by considering accessibility. We use new calculated accessiblity data of Spiekermann & Wegener as well as employment data of the IAB (Institute of Employment Research, Nuremberg) for our econometric study on German counties and on the sectors on the county level. We apply robust estimates, spatial regressions and consider endogeneity, confounding and unobserved heterogeneity. The data show strong changes in road accessibility in East Germany as well as changes in rail accessibility mainly in West Germany between 1996 and 2011. The extension of the high speed rail network focused on West Germany, while investments in the road networks were predominately occurring in East Germany. In addition, investment in the high speed network in Western neighboring countries primarily affected rail accessibility in the border regions to France and Belgium...
    Date: 2014

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