nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒08‒25
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Spatial Methods By Steve Gibbons; Henry G. Overman; Eleonora Patacchini
  2. “Phantom of the Opera” or “Sex and the City”? – Historical Amenities as Sources of Exogenous Variation By Thomas K. Bauer; Philipp Breidenbach; Christoph M. Schmidt
  3. Perspectives on Cluster Evolution: Critical Review and Future Research Issues By Trippl, Michaela; Grillitsch, Markus; Isaksen, Arne; Sinozic, Tanja
  4. The role of universities in regional development: conceptual models and policy institutions in the UK, Sweden and Austria By Trippl, Michaela; Sinozic, Tanja; Lawton Smith , Helen
  5. The Diffusion of Development: Along Genetic or Geographic Lines? By Campbell, Douglas L.; Pyun, Ju Hyun
  6. Regional productivity in a multi-speed Europe By Don J. Webber; Min-Hua Jen; Eoin O'Leary
  7. Does Culture Affect Local Productivity and Urban Amenities? By Brahim Boualam; ;
  8. Labour Market Integration, Human Capital Formation, and Mobility By Alexander Haupt; Silke Übelmesser
  9. Global Connectivity and Export Performance By Jean-François Arvis; Ben Shepherd
  10. Integrating border regions : connectivity and competitiveness in South Asia By Cali, Massimiliano; Farole, Thomas; Kunaka, Charles; Wagle, Swarnim
  11. Industry space and skill-relatedness of economic activities : comparative case studies of three eastern German automotive regions By Otto, Anne; Weyh, Antje
  12. Export performance and geography in Croatia By Artuc, Erhan; Iootty, Mariana; Pirlea, Ana Florina
  13. Indirect Job Creation and the Informal Sector in Mexico By Mariana Pereira-López
  14. Foreign direct investment and local spillovers in the apparel sector in Sub-Saharan Africa By Staritz, Cornelia
  15. Finite Element Model of the Innovation Diffusion: An Application to Photovoltaic Systems By Karakaya, Emrah

  1. By: Steve Gibbons; Henry G. Overman; Eleonora Patacchini
    Abstract: This paper is concerned with methods for analysing spatial data. After initial discussion on the nature of spatial data, including the concept of randomness, we focus most of our attention on linear regression models that involve interactions between agents across space. The introduction of spatial variables in to standard linear regression provides a flexible way of characterising these interactions, but complicates both interpretation and estimation of parameters of interest. The estimation of these models leads to three fundamental challenges: the reflection problem, the presence of omitted variables and problems caused by sorting. We consider possible solutions to these problems, with a particular focus on restrictions on the nature of interactions. We show that similar assumptions are implicit in the empirical strategies - fixed effects or spatial differencing - used to address these problems in reduced form estimation. These general lessons carry over to the policy evaluation literature.
    Keywords: Spatial analysis, spatial econometrics, neighbourhood effects, agglomeration, weights matrix
    JEL: R C1 C5
    Date: 2014–08
  2. By: Thomas K. Bauer; Philipp Breidenbach; Christoph M. Schmidt
    Abstract: Using the location of baroque opera houses as a natural experiment, Falck et al. (2011) claim to document a positive causal effect of the supply of cultural goods on today’s regional distribution of talents. This paper raises serious doubts on the validity of the identification strategy underlying these estimates, though. While we are able to replicate the original results, we proceed to show that the same empirical strategy also assigns positive causal effects to the location of historical brothels and breweries. These estimated effects are similar in size and significance to those of historical opera houses. We document that all these estimates reflect the importance of institutions for longrun economic growth, and that the effect of historical amenities on the contemporary local share of high skilled workers disappears upon controlling for regions’ historical importance.
    Keywords: Human capital; historical amenities; regional competiveness
    JEL: R11 H42 J24
    Date: 2014–07
  3. By: Trippl, Michaela (CIRCLE, Lund University); Grillitsch, Markus (CIRCLE, Lund University); Isaksen, Arne (Department of Working Life and Innovation, University of Agder); Sinozic, Tanja (Institute for the Environment and Regional Development, Vienna University of Economics and Business)
    Abstract: The past two decades have witnessed an ever-growing scholarly interest in regional clusters. The focus of research has mainly been on why clusters exist and what characteristics “functioning” clusters hold. Although the interest in more dynamic views on clusters is not new, in recent years, however, more attention has been paid to providing better explanations of how clusters change and develop over time, giving rise to an increasing popularity of different variants of the cluster life cycle approach. This article offers a critical review of various cluster life cycle models. We discuss the key ideas and arguments put forward by their main protagonists and we identify several shortcomings – such as the problematic predefinition of development phases, indifference to context-specific factors and neglect of multi-scalar impacts – that surround these models. Based on this critical assessment the article identifies several core issues for future research. In particular, we argue that there is a need to gain a better understanding of the context sensitivity of cluster evolution, to explore how cluster development paths are influenced by a multiplicity of factors and processes at various spatial scales and their interactions, and to investigate the role of human agents and to unravel how they shape the long-term development of regional clusters.
    Keywords: cluster evolution; life cycle approaches; context sensitivity; multi-scalar frameworks; human agency
    JEL: P48 R10 R11 R50 R58
    Date: 2014–07–23
  4. By: Trippl, Michaela (CIRCLE, Lund University); Sinozic, Tanja (Institute for Multilevel Governance and Development, Vienna University of Economics and Business); Lawton Smith , Helen (Department of Management; Birkbeck, University of London)
    Abstract: The literature on universities’ contributions to regional development is broad and diverse. A precise understanding of how regions can potentially draw advantages from various university activities and the role of public policy institutions (imperatives and incentives) in promoting such activities is still missing. The aim of this paper is to advance a more nuanced view on universities’ contributions to regional economic and societal development. We identify and review four conceptual models: (i) the entrepreneurial university model, (ii) the regional innovation system model, (iii) the mode 2 university model, and (iv) the engaged university model. The paper demonstrates that these four models emphasise very different activities and outputs by which universities are seen to benefit their regions. We also find that these models differ markedly with respect to the policy implications that can be drawn. Analysing public policy imperatives and incentives in the UK, Austria and Sweden the paper highlights that in the UK national policies encourage and have resulted in all four university models. In Sweden and Austria policy institutions tend to privilege in particular the RIS university model, whilst at the same time there is some evidence for increasing support of the entrepreneurial university model.
    Keywords: universities; regional development; public policy; UK; Sweden; Austria
    JEL: I28 R10 R58
    Date: 2014–07–29
  5. By: Campbell, Douglas L.; Pyun, Ju Hyun
    Abstract: Why are some peoples still poor? Recent research suggests that a society’s “genetic distance”—a measure of the time elapsed since two populations had common ancestry—to the United States is a significant predictor of development even after controlling for an ostensibly exhaustive list of geographic, historical, religious and linguistic variables. We find, by contrast, that the correlation of genetic distance from the US and GDP per capita disappears with the addition of controls for geography including distance from the equator and a dummy for sub-Saharan Africa.
    Keywords: Genetics, Economic Development, Geography, Climatic Similarity
    JEL: O10 O33 O40
    Date: 2014–08
  6. By: Don J. Webber (University of the West of England, Bristol); Min-Hua Jen (Imperial University); Eoin O'Leary (University College Cork)
    Abstract: This paper examines productivity dynamics at different spatial scales across European countries. Application of non-parametric simultaneous estimation techniques to a hierarchical dataset permits us to consider explicitly the extent to which the national-level is important for understanding regional-level productivity variation. The results show considerable national and regional level productivity variation which is not constant and evolves over time. There is divergence at all spatial scales and groups of regions that follow different growth trajectories with group membership not being confined by national borders. The results imply that policymakers need to take cognizance of the multi-layered economic geographies in which they are located. There are also group dynamics that challenge the dominance of the national economic positions and should be considered when shaping policy.
    Keywords: Multi-level modelling; Regional productivity; Groups
    JEL: R11 O47
    Date: 2014–01–08
  7. By: Brahim Boualam; ;
    Abstract: Does a better cultural milieu make a city more livable for residents and improve its business environment for firms? I compute a measure of cultural specialization for 346 U.S. metropolitan areas and ask if differences in cultural environment capitalize into housing price and wage differentials. Simple correlations replicate standard results from the literature: cities that are more specialized in cultural occupations enjoy higher factor prices. Estimations using time-series data, controlling for city characteristics and correcting for endogeneity weaken the magnitude of this effect. Even though the arts and culture might be appealing to some people and firms, such determinants are not strong enough to affect factor prices at the city level.
    Keywords: Urban economics, location choice, local amenities, culture.
    Date: 2014–01
  8. By: Alexander Haupt (Plymouth University and CESifo); Silke Übelmesser (School of Economics and Business Administration, Friedrich-Schiller-University Jena, and CESifo)
    Abstract: In this paper, we analyse the implications of labour market integration in a two-region model with local human capital externalities and congestion eects. We show that integration can be a double-edged sword. Integration and the ensuing agglomeration of skilled labour can reduce 'real' income in both regions. Even if there is a 'winning' region, human capital and real income in the two regions together might decline (but need not). However, integration can increase total real income even if it depresses human capital formation. We further explore how the degree of labour mobility and the strength of the congestion eects shape the impact of integration on human capital and income.
    Keywords: Human capital, migration, labour market integration, agglomeration
    JEL: F22 R23 J24 R12
    Date: 2014–08–19
  9. By: Jean-François Arvis; Ben Shepherd
    Keywords: Private Sector Development - E-Business Private Sector Development - Emerging Markets Economic Theory and Research Transport Economics Policy and Planning Geographical Information Systems Macroeconomics and Economic Growth Transport
    Date: 2013–03
  10. By: Cali, Massimiliano; Farole, Thomas; Kunaka, Charles; Wagle, Swarnim
    Abstract: Deeper regional integration can be beneficial especially for regions along international borders. It can open up new markets on opposite sides of borders and give consumers wider access to cheaper goods. This paper uses data from five contiguous districts of India, Nepal, and Bangladesh in the northeast of the subcontinent to measure the degrees of trade complementarity between districts. The paper illustrates that the regions are underexploiting the potential of intraregional commerce. Price wedges of up to 90 percent in some important consumption products along with measures of complementarity between households'production and consumption suggest the potential for relatively large gains from deeper trade integration. Furthermore, an examination of a specific supply chain of tea highlights factors that help industries scale up, aided by institutions such as an organized auction and decent physical and legal infrastructure. However, districts alike in geography but located across international boundaries face different development prospects, suggesting that gains from reduced"thickness of borders"would not accrue automatically. Much rests on developing intrinsic industry competitiveness at home, including the reform of regulatory and business practices and infrastructural bottlenecks that prevent agglomeration of local economies.
    Keywords: Transport Economics Policy&Planning,Markets and Market Access,Economic Theory&Research,Regional Economic Development,Emerging Markets
    Date: 2014–07–01
  11. By: Otto, Anne (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Weyh, Antje (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "The resilience and growth prospects of a region depend crucially on the extent to which industry-specific human capital can be redeployed across the industries of a regional economy. To this end, we present a toolbox to analyse a region's industrial structure, development prospects and economic resilience. With the help of this toolbox human capital similarities, or skill-relatedness, among industries are highlighted. The core of these analyses is the so-called industry space, a network that connects industries with similar human capital requirements. For the time period 1999 to 2008, a regional comparative analysis of three eastern German automobile regions, namely south-west Saxony (SWS), Eisenach region (EIS) and Leipzig region (LEI), is conducted. The objective is to highlight similarities and differences in the composition of the general automobile-oriented knowledge bases between these regions. In addition, the region-specific growth prospects of economic activities, in general and with a closer look at car manufacturers and automotive suppliers, are scrutinized and evaluated in greater detail for each region. This regional comparison is complemented by an investigation of the regional and industrial origins of labour inflows and by a simulation of labour shifts between shrinking and growing industries to figure out as to what extent redundant labour can be reallocated between skillrelated pairs of industries in each region under examination." (Author's abstract, IAB-Doku) ((en))
    Keywords: Resilienz, Automobilindustrie, Regionalentwicklung, Qualifikationsstruktur, Wirtschaftszweige, Zulieferer, Netzwerk, Wirtschaftsstruktur, Innovation, Eisenach, Leipzig, Südwestsachsen, Sachsen, Thüringen, Bundesrepublik Deutschland
    Date: 2014–08–18
  12. By: Artuc, Erhan; Iootty, Mariana; Pirlea, Ana Florina
    Abstract: This paper uses the gravity model to analyze whether the varying export performance of Croatian counties can be explained by their proximity to border gates, ports, and other county-specific characteristics. The analysis finds that longer distances to border gates increase trade frictions significantly for many product categories, although these frictions have been decreasing between 2007 and 2012. The paper analyzes the county specific factors that are associated with variation in export performance, net of distance. Results show that exports are strongly and positively correlated with motorway and road density, the size of the labor force, low-skill ratio, and the number of patents. These variables are also associated with a greater diversity of exports in terms of products and destinations. Several general policy implications are highlighted. The significant association between motorway and road density and export volume, number of destinations, as well as the diversity of exported products may indicate that improvements in connectivity and facilitation of transport could still play a significant role in enhancing regional trade outcomes. Similarly, good performance in research and development may significantly help to spur competitiveness and allow local producers to enter new markets in products and destinations, which in turn can increase the level of diversification and boost resilience to global economic shocks.
    Keywords: Economic Theory&Research,Free Trade,Transport Economics Policy&Planning,Trade Policy,Tax Law
    Date: 2014–08–01
  13. By: Mariana Pereira-López (Universidad Iberoamericana, Ciudad de México)
    Abstract: This paper analyzes the effects of localized labor demand shocks in the tradable sector, such as the establishment of a large tradable firm in a municipality, over nontradable formal and informal jobs in the case of Mexico. Results indicate that locations that experienced this shock have between 8 and 13 thousand more jobs than other municipalities over a ten-year period. Indirect job creation is similar in both the formal and the informal sectors, but informality appears to be more vulnerable to negative shocks. Furthermore, the effects of shocks are symmetric in the formal sector but not in the informal, where negative shocks have greater effects over nontradable employment.
    JEL: J23 R11 R12 R23
    Date: 2014–08–20
  14. By: Staritz, Cornelia
    Abstract: Foreign direct investment (FDI) in the apparel sector in several Sub-Saharan African (SSA) countries has experienced significant growth in the context of preferential market access. But expectations of FDI leading to spillovers to the local economy and the development of locally-embedded apparel export industries have not materialized. A shift from FDI attraction through fiscal incentives to more strategic industrial policies that target FDI spillovers, local value added and linkages is urgently needed for broader local development effects. --
    Date: 2013
  15. By: Karakaya, Emrah (Technical University of Madrid & KTH Royal Institute of Technology)
    Abstract: This paper presents a Finite Element Model, which has been used for forecasting the diffusion of innovations in time and space. Unlike conventional models used in diffusion literature, the model considers spatial heterogeneity. The implementation steps of the model are explained by applying it to the case of diffusion of photovoltaic systems in a local region in southern Germany. The applied model is based on a parabolic partial differential equation that describes the diffusion ratio of photovoltaic systems in a given region over time. The results of the application suggest that the Finite Element Model could be a powerful tool to improve our understanding on the diffusion of innovations as a simultaneous space-time process. For future research, model limitations and possible extensions are also discussed.
    Keywords: Innovation; Adoption; Spatiotemporal; prediction; solar photovoltaics
    JEL: C02 C63 O33 Q55 R00
    Date: 2014–07–24

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