nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒08‒09
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Economic Geography, Endogenous Fertility, and Agglomeration By MORITA Tadashi; YAMAMOTO Kazuhiro
  2. Theoretical Perspectives on Localised Knowledge Spillovers and Agglomeration By Leppälä, Samuli
  3. The Economics of Density: Evidence from the Berlin Wall By Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
  4. Modelling the Impact of Fundamentals on County Housing Markets in Ireland By Morgenroth, Edgar
  5. The capitalization of non-market attributes into regional housing rents and wages: Evidence on German functional labor market areas By Hiller, Norbert; Lerbsy, Oliver
  6. Urban Vibrancy and Corporate Growth By Casey Dougal; Christopher A. Parsons; Sheridan Titman
  7. Ethnic Differentials on the Labor Market in the Presence of Asymmetric Spatial Sorting : Set Identification and Estimation By Roland Rathelot
  8. Cultural Diversity and Economic Policy By Dirk Dohse; Robert Gold
  9. The Geography of Financial Misconduct By Christopher A. Parsons; Johan Sulaeman; Sheridan Titman

  1. By: MORITA Tadashi; YAMAMOTO Kazuhiro
    Abstract: In this study, we construct an interregional trade model that includes endogenous fertility rates. The presented model shows that the agglomeration of manufacturing firms in a large region causes fertility rates to become lower than that in a small region. The agglomeration of firms in a region lowers the price of manufactured goods relative to child rearing costs, which reduces fertility rates. We also find that a decrease in transportation costs results in the agglomeration of manufacturing firms, which lowers fertility rates in both large and small regions. We then extend our two-region model to a multi-region model and find that the number of manufacturing firms in larger regions is always greater than that in smaller regions. Therefore, fertility rates in larger regions are always lower than in smaller regions.
    Date: 2014–07
  2. By: Leppälä, Samuli (Cardiff Business School)
    Abstract: There is substantial empirical evidence that innovation is geographically concentrated. Unlike what is generally assumed, however, it is not clear that localised knowledge spillovers provide a theoretically valid explanation for this. Studying spillovers of cost-reducing technology between Cournot oligopolists we show that 1) localised knowledge spillovers of any level do encourage agglomeration, but 2) whether this leads to higher levels of effective R&D depends on the type and level of knowledge spillovers, the number of firms, and the industry's R&D efficiency.
    Keywords: knowledge spillovers; agglomeration economies; innovation; location
    JEL: O33 R32 L13
    Date: 2014–07
  3. By: Gabriel M. Ahlfeldt; Stephen J. Redding; Daniel M. Sturm; Nikolaus Wolf
    Abstract: This paper develops a quantitative model of internal city structure that features agglomeration and dispersion forces and an arbitrary number of heterogeneous city blocks. The model remains tractable and amenable to empirical analysis because of stochastic shocks to commuting decisions, which yield a gravity equation for commuting flows. To structurally estimate agglomeration and dispersion forces, we use data on thousands of city blocks in Berlin for 1936, 1986 and 2006 and exogenous variation from the city's division and reunification. We estimate substantial and highly localized production and residential externalities. We show that the model with the estimated agglomeration parameters can account both qualitatively and quantitatively for the observed changes in city structure.
    JEL: N34 O18 R12
    Date: 2014–07
  4. By: Morgenroth, Edgar
    Abstract: Ireland experienced a recent boom-bust cycle in the housing market. While the housing market in Ireland has been analysed at the national level there has been no research on the relationship between fundamentals and the housing market at the sub-national level. In this paper the spatial distribution of household changes is projected for the period 2011 to 2021 and this is used to consider the impact on housing demand, taking into account the significant overhang of vacant properties. Given the assumptions used the demographic projections indicate that the growth in number of households will be concentrate in and around the large cities and particularly Dublin. Given a smaller vacant stock and the projected growth in conjunction with small number of housing completions implies that the Greater Dublin Region will experience housing shortages. Formal modelling of the change in house prices, the stock of housing and the vacancy rate confirms that fundamental drivers are important in shaping these variables. Importantly, the estimated parameters confirm the emerging shortage of housing in Dublin and predict consequent strong growth in house prices.
    Keywords: Regional housing market, house prices, demographic change
    JEL: R23 R31 R32
    Date: 2014–07–30
  5. By: Hiller, Norbert; Lerbsy, Oliver
    Abstract: This paper extends existing research on regional quality of life in Germany by newly estimating the role of region-specific (dis-)amenities in the determination of regional housing rents and wages. Different from previous studies, the empirical analysis draws on functional labor market areas recently delineated by Kosfeld and Werner [Raumf Raumordn (2012) 70: 49-64] rather than administrative jurisdictions, circumventing problems of spatial autocorrelation. Consistent with cross-region spatial equilibrium, the results indicate that labor market area heterogeneity in housing rents and wages is closely related to differences in non-market attributes that affect household utility. The results enable the construction of a comprehensive ranking of regional quality of life which can be directly compared to the findings of previous studies. --
    Keywords: Functional labor market areas,Non-market (dis-)amenities,Spatial equilibrium analysis,Quality of Life,Spatial autocorrelation
    JEL: R13 R21 R23
    Date: 2014
  6. By: Casey Dougal; Christopher A. Parsons; Sheridan Titman
    Abstract: We find that a firm's investment is highly sensitive to the investments of other firms headquartered nearby, even those in very different industries. It also responds to fluctuations in the cash flows and stock prices (q) of local firms outside its sector. These patterns do not appear to reflect exogenous area shocks such as local shocks to labor or real estate values, but rather suggest that local agglomeration economies are important determinants of firm investment and growth.
    JEL: G3 G31 R10 R12
    Date: 2014–07
  7. By: Roland Rathelot (CREST)
    Abstract: This paper aims to isolate the ethnic gap on the labor market that can be attributed to ethnicity and not to differences in individual characteristics or residential location. Controlling for residential location is important as ethnic minorities often live in distressed neighborhoods. It is also challenging because spatial sorting is likely to differ across ethnicities because of labor- or housing-market discrimination. This paper shows that controlling for neighborhoods and observed individual characteristics fails to pro-vide a consistent estimate for the component of the gap accountable to ethnicity only. However, under some assumptions, the quantity of interest is set identified even when heterogeneous sorting patterns across ethnicities are allowed for and the set estimate can still be informative. A two-step estimation method is presented and applied to explain the ethnic employment differential in France, between French individuals of North African ancestry and those with non-immigrant parents. Most of the gap is not due to differences in residential location or individual characteristics, but rather to ethnicity itself
    Keywords: ethnic employment gaps, spatial sorting, set identification, discrimination, spatial mismatch
    JEL: C23 J71 R23
    Date: 2014–04
  8. By: Dirk Dohse; Robert Gold
    Abstract: This paper discusses policy implications from the empirical results obtained in the preceding tasks and, in particular, from a survey among city representatives and representatives of migrant organizations in 40 European cities. It argues that cultural diversity is a distinct aspect of migration that must be taken into account when designing policies. Moreover, it pleads for integrating migration and innovation policies to better use the economic potentials linked to migration. In order to achieve this goal, local actors should be incorporated into the design and implementation of (future) integration policies to take adequately into account the regional heterogeneity in diversity effects observed.
    Keywords: Regional Development, Urban Development, Cultural Diversity
    JEL: M13 O18 R11
    Date: 2014–07
  9. By: Christopher A. Parsons; Johan Sulaeman; Sheridan Titman
    Abstract: We find that a firm’s tendency to engage in financial misconduct increases with the misconduct rates of neighboring firms. This appears to be caused by peer effects, rather than exogenous shocks like regional variation in enforcement. Effects are stronger among firms of comparable size, and among CEOs of similar age. Moreover, local waves of financial misconduct correspond with local waves of non-financial corruption, such as political fraud.
    JEL: G0 K42 M41 R0
    Date: 2014–07

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