nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒11‒01
eight papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Do spinoff dynamics or agglomeration externalities drive industry clustering? A reappraisal of Steven Klepper’s work By Ron Boschma
  2. Growth Poles: Agglomeration Economies and Economic Growth in Switzerland from 1860 to 2008 By Christian Stohr;
  3. Space-filling location selection By Philippe Van Kerm
  4. On the sources of European regional convergence: Does social capital have an economic payoff? By Jesús Peiró-Palomino; Emili Tortosa-Ausina
  5. Decentralization in Colombia: Searching for social equity in a bumpy economic geography By Juan Mauricio Ramirez; Yadira Diaz; Juan Guillermo Bedoya
  6. Regional labor markets in Brazil: the role of skills and agglomeration economies By Ana Maria Bonomi Barufi
  7. The regional impact of EU association agreements: lessons for the ENP from the CEE experience By Vassilis Monastiriotis; Dimitris Kallioras; George Petrakos
  8. Getting a First Job: Quality of the Labor Matching in French Cities By Brahim Boualam

  1. By: Ron Boschma
    Abstract: Klepper’s theory of industry clustering based on organizational reproduction and inheritance through spinoffs challenged the Marshallian view on industry clustering. The paper provides an assessment of Klepper’s theoretical and empirical work on industry clustering. We explore how ‘new’ his spinoff theory on industry clustering was, and we investigate the impact of Klepper’s theory on the economic geography community. Klepper’s work has inspired especially very recent literature on regional branching that argues that new industries grow out of and recombine capabilities from local related industries. Finally, the paper discusses what questions on industry location are still left open or in need of more evidence in the context of Klepper’s theory.
    Keywords: Klepper, spinoff dynamics, agglomeration economies, Marshall, industry clustering, evolutionary economic geography
    JEL: B15 B52 O18 R11
    Date: 2014–09
  2. By: Christian Stohr;
    Abstract: This paper investigates the relation between agglomeration and economic growth in Switzerland from 1860 to 2008. I use a new detailed data set on regional employment, value added and labor productivity for two geographical levels with 97 and 16 regions respectively. I provide a description of spatial concentration and inequality in labor productivity over the entire time period and find that the Swiss economy was very dispersed around 1860 but spatial concentration of economic activity increased rapidly until 1930. Thereafter, a series of institutional settings limited spatial concentration. Regional inequality in terms of labor productivity followed a bell-¬â€shape evolution between 1860 and 1990 followed by a new upswing in regional inequality after 1990. I pursue by estimating the impact of agglomeration on labor productivity and employment growth and find that agglomeration economies contributed significantly to regional economic growth between 1888 and 1930. Thereafter, the Great Depression and regional redistribution policies have limited the effect of agglomeration economies. I argue that rapid urbanization has significantly contributed to Switzerland’s fast growth between 1860 and 1930, while anti-¬â€urban policies have contributed to the Swiss growth slack after 1970.
    Keywords: Switzerland, agglomeration economies, growth poles, historical economic geography
    Date: 2014–09
  3. By: Philippe Van Kerm (CEPS/INSTEAD, Luxembourg)
    Abstract: This presentation describes a Stata implementation of a space-filling location selection algorithm. The objective is to select a subset from a discrete list of locations so that the spatial coverage of the locations by the selected subset is optimized according to a geometric criterion. Such an algorithm designed for geographical site selection is useful more generally to determine a grid of points that "covers" a data matrix as needed in various nonparametric estimation procedures. Various examples illustrate usage of the user-written command spacefill.
    Date: 2014–09–28
  4. By: Jesús Peiró-Palomino (Department of Economics, University Jaume I, Castellón, Spain); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universidad Jaume I, Castellón, Spain)
    Abstract: Recent literature has shown how relevant social capital may be as an important determinant of economic growth. However, the empirical evidence in contexts such as Europe, particularly at the regional level, is still scant, and its likely implications for income convergence are entirely unexplored. We analyze how social capital has influenced per capita income convergence for 216 European Union (EU) regions, a relevant context not only in light of the cohesion policies but also due to the remarkable disparate social capital endowments at the regional level. By using the distribution dynamics approach to convergence analysis, results generally support the relevant conditioning role of social capital for per capita income convergence, although the impact varies depending on the dimension considered—social trust, participation in associations, or the quality of social norms.
    Keywords: distribution dynamics,European regions,income convergence, social capital
    JEL: C14 D31 O47 R11
    Date: 2014
  5. By: Juan Mauricio Ramirez (Fedesarrollo, Colombia); Yadira Diaz (ISER, University of Essex); Juan Guillermo Bedoya (Fedesarrollo, Colombia)
    Abstract: Colombia’s decentralization was conceived to improve population’s access to social services, reduce poverty and equalize well-being across the territory. However, after more than 20 years of its implementation a big gap across municipalities still remains. This paper analyses the impact of the Colombia’s fiscal decentralization process over the achievement of social minimums as depicted by the average multidimensional gap and the multidimensional deprivation headcount. We implement an instrumental variable spatial autoregressive model with spatial autoregressive disturbances to take into consideration the spatial interrelated behaviour of deprivation in the Colombian context. This, while accounting for the endogeneity that arises when evaluating the impact of fiscal decentralization. We find strong statistically significant results across all the proven specifications that confirm causal diminishing effect of the share of own resources over multidimensional deprivation. Counterfactual scenarios of spatially differentiated decentralization policies highlight their grater effectiveness over geographically mute designs.
    Keywords: Decentralization, multidimensional poverty, social equity, economic geography, spatial interdependence, Colombia.
    JEL: H71 I31 I38 O23 R58
    Date: 2014–08
  6. By: Ana Maria Bonomi Barufi
    Abstract: This paper aims to discuss how agglomerations economies are present in the equilibrium outcomes of the Brazilian formal labor market. There has been a wide discussion on how to correctly identify agglomeration economies given all the different types of endogeneity found in the labor market relationships, as well as taking into account all the relevant aspects that may affect the results. We make use of an individual-firm panel database from the Ministry of Labor (RAIS - Annual Report on Social Information) with information for six years (2003, 2004, 2005, 2008, 2009 and 2012). With the panel data setting, it is not only possible to account for individual unobserved characteristics constant in time, but also for sector and area effects. Moreover, by identifying skills according to the occupational position of the individuals in each firm, it is possible to control for the proximity to different skill levels (in the sector and municipality) to account for different levels of production knowledge externalities. Individual fixed effects control the potential endogeneity of the labor quality. In the case of labor quantity endogeneity, even if there is no consensus of how to best control for it, instruments based on long time lags are considered. The results show that there is a positive and significant effect of density over wages (Urban Economics literature), even when controlling for other relevant characteristics. Moreover, a measure of market potential, related to the New Economic Geography literature, does not capture this positive relationship with wages in the same way, changing sign in a specific setting. Finally, considering a quantile regression approach, there is an indication that agglomeration economies reinforce wage inequality, with a higher effect for the upper part of the wage distribution.
    Keywords: agglomeration economies; regional labor markets; wage equation
    JEL: R23 E24 R30
    Date: 2014–10–06
  7. By: Vassilis Monastiriotis; Dimitris Kallioras; George Petrakos
    Abstract: The Eastern Enlargement of the EU saw a proliferation of association agreements with countries in the Ônear abroadÕ under EUÕs European Neighbourhood Policy framework. Although such agreements are considered to be strictly welfare-enhancing, there is very little evidence to show their economic effects, including their distributional consequences across space, separately from other concurrent processes (transition, internationalisation, capital deepening, etc). This paper draws on the experience of pre-accession agreements in Central and Eastern Europe to estimate the effect that such agreements had on regional growth, and thus on the long-run evolution of regional disparities, in the associated countries. We apply an event-analysis and exploit the country variation in the timing of these agreements to identify their distinctive effect on regional growth, using regional data at the NUTS3 levels covering the period from the early transition phase (1991/92) until the eruption of the financial crisis (2008). Our results provide strong evidence that EU association agreements accelerate growth; but show that this is far from evenly distributed across space Ð with denser, larger and more diversified regional economies gaining the most. We discuss what these findings imply for regional growth and spatial imbalances in the new wave of associated countries under the ENP.
    Keywords: association agreements, event analysis, regional growth, Central Eastern Europe
    JEL: F15 F55 R11 R15 O43
    Date: 2014–10
  8. By: Brahim Boualam
    Abstract: This paper evaluates the influence of urban density on the quality of the match between workers' field of education and their first occupation. Using survey data on young individuals that entered the French labor market in 2004, I propose an original measure of skill matching and find that the quality of the match increases with urban density. I also show that a better skill match is associated with higher wages and that this matching premium comes in addition to the urban wage premium.
    Keywords: agglomeration, skills, labor matching, urban wage premium.
    Date: 2014–09

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