nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒06‒22
twelve papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Transportation Costs and the Spatial Organization of Economic Activity By Stephen J. Redding; Matthew A. Turner
  2. Market Potential and the curse of distance in European regions By Bruna, Fernando; Faíña, Andrés; Lopez-Rodriguez, Jesus
  3. Are knowledge flows all alike? Evidence from European regions By F. Quatraro; S. Usai
  4. Correcting agglomeration economies: How air pollution matters By Marion Drut; Aurélie MAHIEUX
  5. Testing Spatial Causality in Cross-section Data By Herrera Gómez, Marcos; Ruiz Marín, Manuel; Mur Lacambra, Jesús
  6. Spatial disparities in hospital performance By Laurent Gobillon; Carine Milcent
  7. Coal and the European Industrial Revolution By Alan Fernihough; Kevin Hjortshøj O'Rourke
  8. The spatial distribution of workplace accidents in Spain: assessing the role of workplace inspections By Bande, Roberto; López-Mourelo, Elva
  9. An Ongoing Reversal Of Fortune Among Russian Cities: City Age, Natural Resources, And Changing Spatial Income Distribution By Alexander S. Skorobogatov
  10. Spillover Effects of Homicides across Mexican Municipalities: A Spatial Regime Model Approach By Flores, Miguel; Rodriguez-Oreggia, Eduardo
  11. Immigrants' location choice in Belgium By Hubert Jayet; Glenn Rayp; Ilse Ruyssen; Nadiya Ukrayinchuk
  12. Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example By Gärtner, Stefan; Flögel, Franz

  1. By: Stephen J. Redding; Matthew A. Turner
    Abstract: This paper surveys the theoretical and empirical literature on the relationship between the spatial distribution of economic activity and transportation costs. We develop a multi-region model of economic geography that we use to understand the general equilibrium implications of transportation infrastructure improvements within and between locations for wages, population, trade and industry composition. Guided by the predictions of this model, we review the empirical literature on the effects of transportation infrastructure improvements on economic development, paying particular attention to the use of exogenous sources of variation in the construction of transportation infrastructure. We examine evidence from different spatial scales, between and within cities. We outline a variety of areas for further research, including distinguishing reallocation from growth and dynamics.
    Keywords: Highways, market access, railroads, transportation
    JEL: F15 R12 R40
    Date: 2014–06
  2. By: Bruna, Fernando; Faíña, Andrés; Lopez-Rodriguez, Jesus
    Abstract: In the context of the New Economic Geography (NEG) wage equation, the ‘curse of distance’ is the tendency of peripheral regions to have lower income because of being far from the main markets, as captured by a variable Market Potential. This pattern is consistent with the core-periphery spatial distribution of the European regional economic activity. Nevertheless, during the last decades, the European Union has been implemented active transport and regional policies, which should mitigate the consequences of peripherality. This paper analyzes the changes of the cross-sectional effects of Market Potential on the European regional income per capita during the sample period 1995-2008. The paper finds evidence that the cross-sectional elasticity of per capita income to Market Po-tential has been decreasing over the sample period. However, some results are sensitive to changes in the specification of the wage equation or the estimation method.
    Keywords: NEG, wage equation, distance, core-periphery, regional policy, European regions
    JEL: C21 F12 R11 R12
    Date: 2014–06
  3. By: F. Quatraro; S. Usai
    Abstract: The paper investigates the impact of distance, contiguity and technological proximity on cross- regional knowledge flows, by comparing the evidence concerning co-inventorship, applicant-inventor relationships and citation flows. We find evidence of significant differences across these diverse kinds of knowledge flows for what concerns the role of distance, and the moderating role of contiguity and technological proximity. Moreover, we show that border effects may prove crucial in a twofold sense. On the one hand we show that contiguity between regions belonging to two different countries still plays a moderating role, although weaker as compared to that of within-country contiguity. On the other hand, regions sharing a frontier with a foreign country are more likely to exchange knowledge with this foreign country than other regions which are far away from the border.
    Keywords: regional competitiveness, Patents, knowledge flows, gravity, europe, Border regions
    JEL: R11 O33
    Date: 2014
  4. By: Marion Drut (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies - Université Lille II - Droit et santé - Université Lille III - Sciences humaines et sociales - PRES Université Lille Nord de France); Aurélie MAHIEUX (IFSTTAR/AME/DEST - Dynamiques Economiques et Sociales des Transports - IFSTTAR - PRES Université Paris-Est)
    Abstract: The aim of the paper is to correct standard measures of agglomeration economies in order to account for air pollution generated by commuting. This paper examines the impact of nitrogen oxide (NOX) on worker productivity. NOX emissions are primarily released by the transportation sector. Literature on agglomeration economies is abundant and highlights the positive role of density on productivity. Nevertheless, this literature does not take into account the environmental impact generated by a better accessibility, namely commuting. We rst develop a general framework to estimate the agglomeration economies for the 304 French employment areas. In line with the literature, we nd an estimate of 0.05 for the elasticity coe cient of productivity with respect to density. Then, we introduce NOX emissions. The estimates suggest that emissions reduce the positive e ect of density on productivity by more 13%. The model con rms that air pollution matters. Agglomeration economies should be corrected by the environmental impacts associated with the enhancement of accessibility such as the implementation of a new transport infrastructure or policy.
    Keywords: agglomeration economies ; accessibility ; atmospheric pollution ; transport policies
    Date: 2014
  5. By: Herrera Gómez, Marcos; Ruiz Marín, Manuel; Mur Lacambra, Jesús
    Abstract: The paper shows a new non-parametric test, based on symbolic entropy, which permits detect spatial causality in cross-section data. The test is robust to the functional form of the relation and has a good behaviour in samples of medium to large size. We illustrate the use of test with the case of relationship between migration and unemployment, using data on 3,108 U.S. counties for the period 2003-2008.
    Keywords: Spatial Econometrics, Causality, Non-parametric method
    JEL: C01 C21 C46
    Date: 2014
  6. By: Laurent Gobillon (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, INED - Institut National d'Etudes Démographiques Paris - INED); Carine Milcent (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CEPREMAP - Centre pour la recherche économique et ses applications - Centre pour la recherche économique et ses applications)
    Abstract: Using a French exhaustive dataset, this article studies the determinants of regional disparities in mortality for patients admitted to hospitals for a heart attack. These disparities are large, with an 80% difference in the propensity to die within 15 days between extreme regions. They may reflect spatial differences in patient characteristics, treatments, hospital characteristics and local healthcare market structure. To distinguish between these factors, we estimate a flexible duration model. The estimated model is aggregated at the regional level and a spatial variance analysis is conducted. We find that spatial differences in the use of innovative treatments play a major role whereas the local composition of hospitals by ownership does not have any noticeable effect. Moreover, the higher the local concentration of patients in a few large hospitals rather than many small ones, the lower the mortality. Regional unobserved effects account for around 20% of spatial disparities.
    Keywords: Spatial health disparities ; Economic geography ; Stratified duration model
    Date: 2013–09
  7. By: Alan Fernihough (Institute for International Integration Studies, Trinity College Dublin); Kevin Hjortshøj O'Rourke (All Souls College, Oxford)
    Abstract: We examine the importance of geographical proximity to coal as a factor underpinning comparative European economic development during the Industrial Revolution. Our analysis exploits geographical variation in city and coalfield locations, alongside temporal variation in the availability of coal-powered technologies, to quantify the effect of coal availability on historic city population sizes. Since we suspect that our coal measure could be endogenous, we use a geologically derived measure as an instrumental variable: proximity to rock strata from the Carboniferous era. Consistent with traditional historical accounts of the Industrial Revolution, we find that coal exhibits a strong influence on city population size from 1800 onward. Counterfactual estimates of city population sizes indicate that our estimated coal effect explains at least 60% of the growth in European city populations from 1750 to 1900. This result is robust to a number of alternative modelling assumptions regarding missing historical population data, spatially lagged effects, and the exclusion of the United Kingdom from the estimation sample.
    Keywords: Height, Stature Coal, Historical Population, Geography
    JEL: N13 N53 O13 O14 J10
    Date: 2014–01
  8. By: Bande, Roberto; López-Mourelo, Elva
    Abstract: This paper analyses the spatial distribution of workplace accidents in Spain and analyses the role of economic and institutional variables in this geographical outcome. After estimating an econometric model that explains regional variation in job accidents incidence, we compute conditional regional distributions of workplace accidents under the assumption of no regional variation in workplace inspections. Results show that much of the regional differences in severe and fatal accidents are explained by different inspection intensities. This calls for a regional homogenization of the inspection activities, in contrast to the current situation.
    Keywords: workplace accidents, Spanish regions, workplace inspections
    JEL: J28 J81
    Date: 2014–06–01
  9. By: Alexander S. Skorobogatov (National Research University Higher School of Economics)
    Abstract: This paper documents the negative link between the age of Russian cities and their average wage. This link is robust to various definitions of city age and sample censuring, the inclusion of regional and time fixed effects, dependent variable spatial lag and many urban characteristics. This link is revealed especially for cities founded after the Soviet industriali-zation and for upper quintiles of cities by their average wage. To determine a mechanism behind the established fact, hypotheses as to spatial patterns of economic performance are discussed, including the increasing return hypothesis, the institutions hypothesis and the geography hypothesis. Following the sophisticated version of the geography hypothesis, a model of growth in n-city and two-sector economy is developed. The model replicates the link between age and per capita income and contains testable hypotheses that enable one to check whether a mechanism outlined in the model is behind the link between city age and wage. Our empirical strategy is based on a quasi-experiment, in which the treat-ment effect is made by time and various age groups of the cities are broken up into treatment and control groups. The results are strongly in favor of the sophisticated geography hypothesis. The revealed mechanism suggests that the chang-ing spatial patterns of wage differentials are explained by the changing remaining stocks of natural resources. Older cit-ies are getting relatively poorer due to the shrinking of their remaining resource stocks, while new cities are emerging in resource-rich territories with the respective income advantages.
    Keywords: quasi-experiment, exhaustible resources, internal colonization, differences-in-differences, urban development
    JEL: R12 Q32 O13
    Date: 2014
  10. By: Flores, Miguel; Rodriguez-Oreggia, Eduardo
    Abstract: This paper investigates spatial diffusion patterns of high levels of violence across Mexican municipalities to nearby locations while also exploring the possible effect of increasing law enforcement resources in some regions of the country. Our approach consists of providing a framework based on spatial regime models to address spatial heterogeneity that indicates instability in the structural determinants of homicides. In this context, a distinction is made in relation to the regimes that are analyzed between those municipalities that were exposed to joint operations (‘operativos conjuntos’) and those that were not exposed to the operations. Spatial econometric models were estimated for each regime in light of investigating possible spillover effects arising from the covariates. The results point to differences in regard to the significance, magnitude, and sign of the effects related to some variables according to each spatial regime’s specification. While the direct effects show that socioeconomic variables tend to play an important role in explaining the variation of homicides in the non-joint operation regime, the historical level of homicides and closeness to the U.S. border operate in a more significant way for those municipalities in the joint operation regime. In regard to the indirect effects estimates, a positive and significant spillover effect upon homicide rates is attributed to our law enforcement variable as well as to the proxy variable of informality. These spillover effects are found to be greater in magnitude especially in those municipalities exposed to joint operations.
    Keywords: ESDA, spillover effects, homicides, spatial regime model
    JEL: C1 H7 O1 R1
    Date: 2014–06–12
  11. By: Hubert Jayet (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies - Université Lille II - Droit et santé - Université Lille III - Sciences humaines et sociales - PRES Université Lille Nord de France); Glenn Rayp (Department of Economics and SHERPPA - Ghent University); Ilse Ruyssen (UCL - universite catholique louvain - universite catholique louvain - Université Catholique de Louvain (UCL) - Belgique); Nadiya Ukrayinchuk (EQUIPPE - ECONOMIE QUANTITATIVE, INTEGRATION, POLITIQUES PUBLIQUES ET ECONOMETRIE - Université Lille I - Sciences et technologies - Université Lille II - Droit et santé - Université Lille III - Sciences humaines et sociales - PRES Université Lille Nord de France)
    Abstract: This paper analyses migratory streams to Belgian municipalities between 1994-2007. The Belgian population register constitutes a rich and unique database of yearly migrant inflows and stocks broken down by nationality, which allows us to empirically explain the location choice of immigrants at municipality level. Speci cally, we aim at separating the network ef- fect, captured by the number of previous arrivals, from other location-speci c characteristics such as local labor or housing market conditions and the presence of public amenities. We expect labor and housing market variables to operate at diff erent levels and develop a fixed eff ects nested model of location choice in which an immigrant fi rst chooses a broad area, roughly corresponding to a labor market, and subsequently chooses a municipality within this area. We fi nd that the spatial repartition of immigrants in Belgium is determined by both network eff ects and local characteristics. The determinants of local attractiveness vary by nationality, as expected, but for all nationalities, they seem to dominate the impact of network eff ects.
    Keywords: Migration ; Location choice ; Network e ffects, Nested logit ; Immigrants ; Belgium
    Date: 2014–06–16
  12. By: Gärtner, Stefan; Flögel, Franz
    Abstract: We are calling for comparisons of banking and banking systems from a spatial perspective. Therefore, this paper develops a classification identifying decentralized and centralized banking according to two characteristics: geographical market orientation (regional vs. supraregional) – to determine whether banks facilitate regional savings-investment cycles – and place of decision-making (proximity vs. distance) – to identify whether the flow of soft information is supported in SME lending. The degree of banks’ centralization is also approximated by the spatial concentration of bank employees and shows remarkable explanatory power in Germany, as de-centralized banks increase lending at the expense of centralized banks. --
    Keywords: comparing banking systems,SME finance in Germany,savings and cooperative banks,decentralized vs. centralized banking
    JEL: G21 P51 R51 O16
    Date: 2014–06–02

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