nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒07‒05
nine papers chosen by
Andreas Koch
Institute for Applied Economic Research

  1. Geography and Firm Performance in the Japanese Production Network By Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
  2. The Agglomeration of Bankruptcy By Efraim Benmelech; Nittai Bergman; Anna Milanez; Vladimir Mukharlyamov
  3. Culture, Spatial Diffusion of Ideas and their Long-Lasting Imprints: Evidence from Froebel's Kindergarten Movement By Stefan Bauernschuster; Oliver Falck
  4. The role of external linkages and gatekeepers for the renewal and expansion of U.S. cities’ knowledge base, 1990-2004 By Stefano Breschi; Camilla Lenzi
  5. Electoral politics and regional development. Assessing the geographical allocation of public investment in Turkey By Davide Luca; Andrés Rodríguez-Pose
  6. Heterogeneous determinants of local unemployment in Poland By Ciżkowicz, Piotr; Kowalczuk, Michał; Rzońca, Andrzej
  7. World Input-Output Network By Federica Cerina; Zhen Zhu; Alessandro Chessa; Massimo Riccaboni
  8. Ecological Barriers and Convergence: A Note on Geometry in Spatial Growth Models By Giorgio Fabbri
  9. Dépendance individuelle forte et faible : une analyse en données de panel de la diffusion internationale de la technologie By Cem Ertur; Antonio Musolesi

  1. By: Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
    Abstract: Firms operate in complex supplier-customer networks that potentially range over long distances. However, the effects of supplier networks and supplier location on firm performance are largely unknown. This paper characterizes the domestic production network in Japan using detailed buyer-supplier data on over 950,000 firms. Beyond describing the characteristics of the Japanese production network, the paper examines the geographic features of the network links. Greater geographic distance plays an important role in reducing the probability of buyer-seller relations between pairs of firms. For a given firm, greater distance is associated with better performance measures of suppliers and customers. Geography, the density, and the quality of network connections are strongly correlated with downstream (customer) firm performance. Labor productivity, credit score, and size of a downstream firm are positively correlated with features of its upstream supply base including the number of suppliers and their average performance. In addition, geographic proximity of a firm's suppliers is associated with improved firm performance. The paper also provides the first evidence on the relationship between supplier network connections and downstream firm outcomes. Firm performance is better when its suppliers have more suppliers of their own. However, firm performance is lower when its suppliers are connected to more downstream customers.
    Date: 2014–06
  2. By: Efraim Benmelech; Nittai Bergman; Anna Milanez; Vladimir Mukharlyamov
    Abstract: This paper identifies a new channel through which bankrupt firms impose negative externalities on non-bankrupt peers. The bankruptcy and liquidation of a retail chain weakens the economies of agglomeration in any given local area, reducing the attractiveness of retail centers for remaining stores leading to contagion of financial distress. We find that companies with greater geographic exposure to bankrupt retailers are more likely to close stores in affected areas. We further show that the effect of these externalities on non-bankrupt peers is higher when the affected stores are smaller and are operated by firms with poor financial health.
    JEL: G33 G34 R12 R32 R33
    Date: 2014–06
  3. By: Stefan Bauernschuster; Oliver Falck
    Abstract: We document the spatial diffusion of Friedrich Froebel's radical invention of kindergartens in 19th-century Germany. The first kindergarten was founded at Froebel's birthplace. Early spatial diffusion can be explained by cultural proximity, measured by historical dialect similarity, to Froebel's birthplace. This result is robust to the inclusion of higher order polynomials in geographic distance and similarity measures with respect to industry, geography or religion. Our findings suggest that a common cultural basis facilitates the spill-over of ideas. We further show that the contemporaneous spatial pattern of child care coverage is still correlated with cultural similarity to Froebel's place of birth.
    Keywords: Culture, spatial diffusion, public child care
    JEL: N33 J13 Z13
    Date: 2014
  4. By: Stefano Breschi; Camilla Lenzi
    Abstract: This paper examines the role of external linkages and gatekeepers for the renewal and expansion of cities’ knowledge base, by presenting new evidence about co-invention networks in U.S. metropolitan areas based on European Patent Office (EPO) data for the period 1990-2004. We argue that the relative importance of direct external linkages and external relations mediated by gatekeepers varies according to specific local conditions. In particular, our findings suggest that external relations are on average a chief conduit to inject non-redundant knowledge at the local level and contribute to broadening and rejuvenating the local knowledge base. However, cities are quite heterogeneous in how they benefit from external relations. Whereas direct external connections outperform, on average, external links mediated by gatekeepers, the latter are especially important in cities with a localized and specialized knowledge base, as they enable the trans-coding and absorption at the local level of externally sourced knowledge.
    Keywords: networks, gatekeepers, knowledge base
    JEL: O31 R11
    Date: 2014–06
  5. By: Davide Luca; Andrés Rodríguez-Pose
    Abstract: One of the most important decisions that governments face is how to allocate the public resources necessary for development, given each countrys budget constraints. According to the literature on the links between wealth and institutional performance, highly kleptocratic countries are expected to show higher levels of politicisation of the public purse. The article tests the extent to which socioeconomic criteria (equity and efficiency) or electoral concerns determined the geographical distribution of public investment in the 81 provinces of Turkey between 2004 and 2012. Our results show that, although electoral concerns mattered for the allocation, socioeconomic measures remained the most relevant predictors of investment. Moreover, in contrast to official regional development policy principles, the Turkish state tended to favour areas with a higher level of development over those with greater ‘socioeconomic need’. Our results therefore challenge much of the distributive politics literature, which has overly emphasised the role of pork-barrel in public policy-making. At the same time, they underline the need of paying more attention to the political economy of regional development strategies.
    Keywords: Regional development policies, distributive politics, public investments, political geography, Turkey.
    JEL: H76 O12 O53 R12 R58
    Date: 2014–06
  6. By: Ciżkowicz, Piotr; Kowalczuk, Michał; Rzońca, Andrzej
    Abstract: We identify determinants of large disparities in local unemployment rates in Poland using panel data on NUTS-4 level (poviats). We find that the disparities are linked to local demographics, education and sectoral employment composition rather than to local demand factors. However, the impact of determinants is not homogenous across poviats. Where unemployment is low or income per capita is high, unemployment does not depend on the late working-aged share in the population but does depend relatively stronger on the share of early working-aged. Where unemployment is high or income per capita is low, unemployment does not depend on education attainment and is relatively less responsive to investment fluctuations. Where small farms are present, they are partial absorbers of workers laid off due to investment fluctuations.
    Keywords: local unemployment, Poland, panel data
    JEL: C23 J23 R23
    Date: 2014–04
  7. By: Federica Cerina (Department of Physics, University of Cagliari); Zhen Zhu (IMT Lucca Institute for Advanced Studies); Alessandro Chessa (IMT Lucca Institute for Advanced Studies); Massimo Riccaboni (IMT Lucca Institute for Advanced Studies)
    Abstract: Economic systems, traditionally analyzed as almost independent national systems, are increasingly connected on a global scale. Only recently becoming available, the World Input-Output Database (WIOD) is one of the first efforts to construct the multi-regional input-output (MRIO) tables at the global level. By viewing the world input-output system as an interdependent network where the nodes are the individual industries in different economies and the edges are the monetary goods ows between industries, we study the network properties of the so-called world input-output network (WION) and document its evolution over time. We are able to quantify not only some global network properties such as assortativity, clustering coeficient, and degree and strength distributions, but also its subgraph structure and dynamics by using community detection techniques. Over time, we detect a marked increase in cross-country connectivity of the production system, only temporarily interrupted by the 2008-2009 crisis. Moreover, we find a growing input-output regional community in Europe led by Germany and the rise of China in the global production system. Finally, we use the network-based PageRank centrality and community coreness measure to identify the key industries and economies in the WION and the results are different from the one obtained by the traditional final-demand-weighted backward linkage measure.
    Keywords: Complex Networks; Input-Output; PageRank Centrality; Community Detection
    JEL: C67 F10 F15
    Date: 2014–07
  8. By: Giorgio Fabbri (EPEE, Université d’Evry-Val-d’Essonne (TEPP, FR-CNRS 3126))
    Abstract: We introduce an AK spatial growth model with a general geographical structure. The dynamics of the economy is described by a partial differential equation on a Riemannian manifold. The morphology interacts with the spatial dynamics of the capital and is one determinant of the qualitative behavior of the economy. We characterize on the geographical structure the conditions that guarantee, in the long run, the convergence of the detrended capital across locations and those inducing spatial capital agglomeration
    Keywords: Dynamical spatial model, growth, agglomeration, convergence, infinite dimensional optimal control problems, Riemannian manifolds
    JEL: R1 O4 C61
    Date: 2014
  9. By: Cem Ertur (LEO - Laboratoire d'économie d'Orleans - CNRS : UMR7322 - Université d'Orléans); Antonio Musolesi (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Institut national de la recherche agronomique (INRA) : UMR1215 - Université Grenoble Alpes - Grenoble II)
    Abstract: This paper provides an econometric examination of geographic R&D spillovers among countries by focusing on the issue of cross-sectional dependence. By applying several unit root tests, we first show that when the number of lags of the autoregressive component of augmented Dickey Fuller test-type specifications or the number of common factors is estimated in a model selection framework, the variables (total factor productivity and R&D capital stocks) appear to be stationary. Then, we estimate the model using to complementary approaches, focusing on spatial autoregressive errors and unobserved common correlated factors. These approaches account for different types of cross-sectional dependence and are related to the concepts of weak and strong cross-sectional dependence recently developed in the literature.
    Keywords: Modèle de données de panel ; corrélation en coupe transversale ; économétrie spatiale ; modèles à facteurs ; racine unitaire ; diffusion internationale de la technologie
    Date: 2014–06–26

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