nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒11‒17
eighteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. On the Spatial Scale of Industrial Agglomerations By Tomoya Mori; Tony E. Smith
  2. Regional inflation, spatial location and the Balassa-Samuelson effect By Nagayasu, Jun
  3. Industrial Agglomeration and Spatial Persistence: Entry, Growth, and Exit of Software Publishers By Deltas, George; De Silva, Dakshina G.; McComb, Robert P.
  4. Infrastructure’s Long-Lived Impact on Urban Development: Theory and Empirics By Arthur Grimes; Eyal Apatov; Larissa Lutchman; Anna Robinson
  5. Intra-urban disparities in the quality of life in the city of Porto: a spatial analysis contribution By Luis Delfim Santos; Isabel Martins
  6. Beyond the north-south divide. The geography of strategic alliances in Italy By Simona De Rosa; Filippo Randelli; Luca Salvati
  7. Local Systems’ Strategies Copying with Globalization: Collective Local Entrepreneurship By Covi, Giovanni
  8. “Does absorptive capacity determine collaborative research returns to innovation? A geographical dimension” By Erika Raquel Badillo; Rosina Moreno
  9. Cultural Heritage and the Attractiveness of Cities: Evidence from Recreation Trips By Ruben van Loon; Tom Gosens; Jan Rouwendal
  10. Product differentiation and entry timing in a continuous time spatial competition model By Takeshi Ebina; Noriaki Matsushima; Daisuke Shimizu
  11. The Case of the Top Technology Region/Eindhoven-Leuven-Aachen Triangle (TTR-ELAt) – Regions and Innovation: Collaborating Across Borders By Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
  12. How Important are Local Inventive Milieus: The role of Birthplace, High School and University Education By Ejermo, Olof; Hansen, Høgni Kalsø
  13. The Case of Ireland-Northern Ireland (United Kingdom) – Regions and Innovation: Collaborating Across Borders By Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
  14. Estimating the Skill Bias in Agglomeration Externalities and Social Returns to Education: Evidence from Dutch Matched Worker-Firm Micro-data By Stefan P.T. Groot; Henri L.F. de Groot
  15. “Income inequality in Europe. Analysis of recent trends at the regional level” By Raul Ramos; Vicente Royuela
  16. Does Access to Foreign Markets shape Internal Migration? Evidence from Brazil By Laura Hering; Rodrigo Paillacar
  17. Explaining Cluster Evolution from an Institutional Point of View: Evidence from a French Beverage Cluster By Moodysson , Jerker; Sack , Lionel
  18. Análisis de potencialidades para el desarrollo local. Un método aplicado a regiones de Uruguay para priorizar recursos By Pedro Barrenechea; Adrián Rodríguez Miranda; Carlos Troncoso

  1. By: Tomoya Mori (Institute of Economic Research, Kyoto University); Tony E. Smith (Department of Electrical and Systems Engineering, University of Pennsylvania)
    Abstract: The standard approaches to studying industrial agglomeration have been in terms of summary measures of the “degree of agglomeration” within each industry. But such measures often fail to distinguish between industries that exhibit substantially different spatial scales of agglomeration. In a previous paper, Mori and Smith [45] proposed a new pair of quantitative measures for distinguishing both the scale and degree of industrial agglomeration based on an explicit method for detecting spatial clusters. The first, designated as the global extent (GE) of industrial clusters, measures the spatial spread of these clusters (within a given country) in terms of the areal size of their essential containment, defined to be the (convex-solid) region containing the most significant subset of these clusters. The second, designated as the local density (LD) of industrial clusters, measures the spatial extent of individual clusters within their essential containment in terms of the areal share of that containment occupied by clusters. The central purpose of the present paper is to apply these two measures to the manufacturing industries in Japan, and to demonstrate how they can be used in combination to distinguish both the relative scale and degree of agglomeration exhibited by cluster patterns for each industry. In addition, the information provided by this pair of measures (GE, LD) is systematically compared to that of the most prominent summary measures currently in use. Finally, it is shown that these measures also support certain predictions of new economic geography models in the sense that shipping distances for establishments in each industry tend to be negatively (positively) correlated with the GE (LD) measures of agglomeration in these industries.
    Keywords: Industrial Agglomeration, Cluster analysis, Spatial patterns of agglomeration, Shipment distances, New economic geography
    JEL: C49 L60 R12 R14
    Date: 2014–10
  2. By: Nagayasu, Jun
    Abstract: We empirically analyze regional inflation using data from Japan where there is no regulation to impede the free movement of labor, capitals, goods and services across regions. In particular, our analysis will focus on the geographical location of regions and the productivity effect as explanation for the dynamics of regional inflation. Technically, given that home inflation is often affected by that of neighbors, spatial models have been employed in order to explicitly capture this spillover effect. Similarly, the productivity spillover is modelled in the specification. Then we find that both spatial location and productivity are important determinants of regional inflation. Furthermore inflation persistence is reported to play an important role in explaining regional data.
    Keywords: Regional inflation, Balassa-Samuelson effect, transaction costs, spatial econometric models
    JEL: E3 F3 R1
    Date: 2014–09–01
  3. By: Deltas, George; De Silva, Dakshina G.; McComb, Robert P.
    Abstract: We use geocoded administrative data from Texas on all business establishments to estimate the effects of localization economies on the spatial persistence of industrial employment for the software industry. We decompose this persistence into components arising from entry rates, firm growth, and exit rates. Unlike previous research that has used geographies based on county and MSA divisions, this analysis takes place at a very high level of spatial resolution in which the industrial composition is identified within areas as small as one mile in radius. The choice of the software industry allows us to isolate the effects arising from human capital spillovers and the effects arising from the labor pool channel from other sources of agglomeration economies. Moreover, the decomposition of the employment persistence in entry, growth and exit, and the high level of spatial resolution allow us to distinguish between these two effects and has a number of other advantages. The results suggest that a location, defined as a 1-mile radium circle, with an initial concentration of software industry employment, retains a disproportionate number of software industry employees 6 years later. Software industry employment in the surrounding area has a small and often insignificant effect, i.e., any agglomeration effects dissipate rapidly over space. The results are not driven by higher growth rates of software establishments in high concentration locations or by differences in the survival probabilities. Rather, they are fully accounted for by two factors: (i) the retention of jobs lost by an establishment in a location by other establishments in that same location and (ii) an increased propensity of software establishments to enter in or near locations with prior software establishment presence. The entry effect diminishes sharply beyond one mile. These findings are mostly consistent with labor channel effects, including the possibility of spin-offs locating near existing firms, but disembodied human capital spillovers might also be present to some extent.
    Keywords: Agglomeration economies, labor pools, knowledge spillovers, firm growth
    JEL: R12
    Date: 2014–09–22
  4. By: Arthur Grimes (Motu Economic and Public Policy Research and the University of Auckland); Eyal Apatov (Motu Economic and Public Policy Research); Larissa Lutchman (The University of Auckland); Anna Robinson (Motu Economic and Public Policy Research)
    Abstract: We analyse impacts that infrastructure provision and other factors have on long run urban growth. Reflecting spatial equilibrium insights, growing cities have preferred attributes relative to other cities. These attributes may include natural characteristics, social amenities and transport infrastructure that have productive and/or amenity value. We outline a theoretical model that includes distance-related effects on individual utility and thence population location, and we test this model using historical data covering 1926 to 2006 across 56 New Zealand towns. Instruments dating back to 1880 are used to deal with potential endogeneity issues, and we use spatial-econometrics techniques to test for spatial spillovers between cities.
    Keywords: Infrastructure; city development; population growth; migration; spatial equilibrium
    JEL: H54 R12
    Date: 2014–10
  5. By: Luis Delfim Santos (University of Porto, Faculty of Economics and cef.up); Isabel Martins (University of Porto, CEGOT)
    Abstract: Geographical Information Systems (GIS) are an essential tool to integrate and manage large amounts of data (statistical and graphical) and to visualise the modelling efforts of the contemporary city. The further use of spatial analysis methods, in particular the exploratory analysis of data and spatial econometric models, is a promising way forward to analyse urban reality. In this analysis, we used a conceptual model and a geographical database developed for the city of Porto (Portugal) under a previous research on the topic of intra-urban disparities in the local quality of life. The aim of this paper is to contribute to the interdisciplinary debate on the relevance and use of this type of techniques, which enable us to describe spatial distributions, identifying patterns of spatial association, concentration areas or hot spots, in order to look into distributive features such as concentration, persistence and transitions that might provide interesting interpretations of complex territorial structures, such as the cities.
    Keywords: urban disparities; spatial analysis; quality of life
    JEL: R58 O21
    Date: 2014–10
  6. By: Simona De Rosa; Filippo Randelli; Luca Salvati
    Abstract: Strategic alliances are considered to be a way for private sector firms to fill production gaps and to improve performance through collaboration with partners. The creation of such alliances is indeed shown to increase the competitiveness of firms in national and international frameworks. Recently, such alliances have also been seen as one response of small and medium enterprises to the global economic crisis. This study aims to analyse the dynamics of recent Italian strategic alliances of this type by using a recent database of 333 alliances involving 1,800 companies. The companies and their alliances have been classified according to attributes including specialisation (classified using NACE-REV nomenclature) and location (administrative region and province). The spatial distribution of strategic alliances was studied, taking into account factors such as technological intensity, geographical distribution of companies, and agglomeration factors and networks, at both provincial and regional levels uusing descriptive, correlative and multivariate statistics. We show that the effects of various factors vary spatially, and the descriptors of the spatial distribution of strategic alliances across Italy extend beyond the traditional north/south divide.
    Date: 2014
  7. By: Covi, Giovanni
    Abstract: The paper aims at investigating the possible trajectories of regional clusters (industrial districts or local systems) in order to depict feasible strategies to cope with globalization. First, same relevant stylized facts on the new structure of global market are presented in order to illustrate the new competitive framework the SME must face. Second, the concept of ‘complete productive process’ is introduced to characterize the special setting is necessary for the survival of the regional systems of SME. Said briefly, a local cluster needs to co-produce values, capabilities, institutions: its very identity. Since local systems are essentially ‘cognitive systems’, they need to go global not as single firm but as a system. To accomplish this difficult task they must resort to a collective and cooperative behaviour. The paper tries to fill this gap introducing the concept of ‘Collective Local Entrepreneurship’, a reference point, a device to whom anchor the strategic pragmatism necessary to regional clusters to cope with globalization. The renewal of the local ‘ecosystems’ within the international networks (at all different levels) appears to be a general objective. A strong public-private partnership emerges as a strategic commitment. In this perspective the paper tries to capture, as a conclusion, the potential dynamics of the four evolutionary trajectories, which the regional clusters are called upon to deal with.
    Keywords: Industrial clusters; innovation; knowledge; industrial policy; entrepreneurship.
    JEL: L22 L26 O25 O31
    Date: 2014–01–31
  8. By: Erika Raquel Badillo (Faculty of Economics, University of Barcelona); Rosina Moreno (Faculty of Economics, University of Barcelona)
    Abstract: This paper aims to estimate the impact of research collaboration with partners in different geographical areas on innovative performance. By using the Spanish Technological Innovation Panel, this study provides evidence that the benefits of research collaboration differ across different dimensions of the geography. We find that the impact of extra-European cooperation on innovation performance is larger than that of national and European cooperation, indicating that firms tend to benefit more from interaction with international partners as a way to access new technologies or specialized and novel knowledge that they are unable to find locally. We also find evidence of the positive role played by absorptive capacity, concluding that it implies a higher premium on the innovation returns to cooperation in the international case and mainly in the European one.
    Keywords: Innovation cooperation; Technological partners; Geographical location; Performance; Absorptive Capacity; Spanish firms JEL classification: L25; O31; O33; R1
    Date: 2014–11
  9. By: Ruben van Loon (VU University Amsterdam); Tom Gosens (VU University Amsterdam); Jan Rouwendal (VU University Amsterdam)
    Abstract: Many cities are trying to attract tourists by investing in urban amenities. Cultural heritage is an important example and substantial investments are needed to keep ancient inner cities and characteristic monumental buildings in good shape. The costs of these policies are usually clear, the benefits are often much more difficult to assess. This paper attempts to fill part of this gap by studying the destination choices of urban recreation trips that have urban recreation as the main travel motive. We estimate a discrete choice model for destination choice that takes into account the potential importance of unobserved characteristics. The model allows us to compute the marginal willingness to travel for destinations offering more cultural heritage, which we measure as the area of the inner city that has a protected status because of the cultural heritage that is present there.
    Keywords: Cultural heritage, recreation, city marketing
    JEL: C31 D12 R12 R22 L83
    Date: 2014–04–28
  10. By: Takeshi Ebina; Noriaki Matsushima; Daisuke Shimizu
    Abstract: We extend the well-known spatial competition model (d'Aspremont et al., 1979) to a continuous time model in which two firms compete in each instance. Our focus is on the entry timing decisions of firms and their optimal locations. We demonstrate that the leader has an incentive to locate closer to the centre to delay the follower's entry, leading to a non-maximum differentiation outcome. We also investigate how exogenous parameters affect the leader's location and firms' values and, in particular, numerically show that the profit of the leader changes non-monotonically with an increase in the transport cost parameter.
    Date: 2014–10
  11. By: Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
    Abstract: The Top Technology Region/Eindhoven-Leuven-Aachen triangle (TTR-ELAt) is an initiative to support cross-border collaboration in a densely populated network of small and medium-sized cities located at the heart of western Europe with an annual economic output of USD 244 billion. The collaboration spans three countries, four science and technology policy regimes and six sub-regions. The collaboration centres on a shared recognition of technological strengths (chemicals and advanced materials, high-tech systems and health sciences). The area seeks to better capitalise on its skilled workforce, multinational enterprises and strong research facilities. While building on decades of cross-border activities, the TTR-ELAt seeks to overcome cumbersome governance issues to create the benefits of agglomeration with complementarity expertise so as to increase international attractiveness. This case study is part of the project Regions and Innovation: Collaborating Across Borders. A summary of this working paper appears in a report of the same name.
    JEL: L52 L53 O14 O18 O38 R11 R58
    Date: 2013–12–11
  12. By: Ejermo, Olof (CIRCLE, Lund University); Hansen, Høgni Kalsø (Department of Geosciences and Natural Resource Management, Geography Section, University of Copenhagen)
    Abstract: Using the whole population and almost all individuals in Sweden listed as inventors, we study how the probability of being listed on a patent as inventor is influenced by the density of other future inventors residing in the same region, while controlling for demographic and sector effects along with the educational characteristics of parents. We focus on three such densities: a) future inventors in the municipality around the time of birth, b) future inventors around the time of graduation from high school and c) future inventors at graduation from higher education. We find suggestive evidence that co-locating with future inventors impact on the probability of becoming an inventor in some cases. The most consistent of these effects is found for place of higher education, with some positive effects also most likely coming from birthplace, whereas no consistent positive effect is found from the individuals’ high school location. Formative influences to become an inventor therefore seem mainly to derive from family upbringing, birth region and from local milieu effects derived from conscious choices into higher education.
    Keywords: inventor; time-space; regional unevenness; context; local milieu
    JEL: I21 J24 O18 O31 O33 R12 Y91
    Date: 2014–09–09
  13. By: Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan
    Abstract: The island of Ireland, which includes both Ireland and Northern Ireland (United Kingdom), is home to 6.4 million people and has a combined economic output of USD 205 billion. Several cross-border institutions were created in response to the 1998 Belfast/Good Friday Agreement to recreate functional economic linkages across the border. InterTradeIreland is a rare example internationally of a cross-border entity to promote trade and innovation that is co-funded by respective governments. These efforts have led to stability in funding such programmes. The differences between the public sector driven economy in Northern Ireland and the dual economy of Ireland (outward looking multinationals and the local small and medium-sized enterprise base) are a challenge for cross-border efforts. This case study is part of the project Regions and Innovation: Collaborating Across Borders. A summary of this working paper appears in a report of the same name.
    JEL: L52 L53 O14 O18 O38 R11 R58
    Date: 2013–12–12
  14. By: Stefan P.T. Groot (Centraal Planbureau, The Hague, the Netherlands); Henri L.F. de Groot (VU University Amsterdam, the Netherlands)
    Abstract: This paper employs a unique set of micro-data covering almost one third of the Dutch labor force, to estimate the relationship between agglomeration externalities and the level of education. While the positive relationship between economic density and productivity and wages has long been established in the economic literature, less is known about the effects of density on the productivity of different types of workers. This paper shows that there is substantial heterogeneity in the relationship between density and productivity for workers with different types of education. Apart from estimating the impact of aggregate density, we also estimate whether the composition of the local labor market in terms of education is related to the productivity of different types of workers. Using the presence of universities as an instrument, we estimate the effect of the supply of university graduates on wages, i.e. the social return to education.
    Keywords: agglomeration, education, knowledge-spillovers, wages, local labor markets
    Date: 2014–07–11
  15. By: Raul Ramos (Faculty of Economics, University of Barcelona); Vicente Royuela (Faculty of Economics, University of Barcelona)
    Abstract: The evolution of income inequality is becoming a great concern all over the World, particularly since the start of the Great Recession. In this work we analyse the main trends of income inequality in Europe over the last decade, both at the national and regional level. Our results point to a large diversity in inequality patterns, as we observe both increases and decreases in inequality both at the regional and at the national level. The EU2020 Strategy aims achieving an inclusive economic growth, benefitting the largest possible number of people. We briefly analyse the main factors impacting inequality and finally derive several policy implications.
    Keywords: Inequality, Globalisation, Technological change, European regions. JEL classification: R11, R12, O15, O3, F61
    Date: 2014–10
  16. By: Laura Hering (Erasmus University Rotterdam, the Netherlands); Rodrigo Paillacar (University of Cergy-Pontoise, France)
    Abstract: This paper investigates how internal migration is a affected by Brazil's increased integration into the world economy. We analyze the impact of regional differences in access to foreign demand on sector-specific bilateral migration rates between the Brazilian states for the years 1995 to 2003. Using international trade data, we compute a foreign market access indicator at the sectoral level, which is exogenous to domestic migration. A higher foreign market access is associated with a higher local labor demand and attracts workers via two potential channels: higher wages and new job opportunities. Our results show that both channels play a significant role in internal migration. Further, we find a heterogeneous impact across industries according to their comparative advantage on the world market. However, the impact of market access is robust only for low-educated wor kers. This finding is consistent with the fact that Brazil is exporting mainly goods that are intensive in unskilled labor.
    Keywords: Regional migration, international trade, market access, Brazil
    JEL: F16 R12 R23
    Date: 2014–07–07
  17. By: Moodysson , Jerker (CIRCLE, Lund University); Sack , Lionel (CIRCLE, Lund University)
    Abstract: This study analyzes the evolution of a ‘protected label of origin’ cluster in France with a particularly homogeneous and explicit institutional framework, which has given birth to significant incremental and radical changes in recent decades. By providing insights into these change processes and their institutional preconditions, the study provides an operational framework that disentangles different types of institutional change that are shaped by preconditions in the cluster - but that also shape the cluster on an aggregate level. The study distinguishes between institutional triggers for change of incremental versus radical nature, mainly focusing on inefficiencies that emerge over time in a given institutional framework. It suggests that incremental change processes have their main origin in developments on the regulative and normative dimension of institutions within the cluster, whereas more radical change processes require a wider set of preconditions, of which change on the cognitive dimension is crucial.
    Keywords: cluster; evolution; institutions; path dependence
    JEL: L66 O31
    Date: 2014–11–05
  18. By: Pedro Barrenechea (Universidad de la República (Uruguay). Núcleo Interdisciplinario de Estudios de Desarrollo Territorial); Adrián Rodríguez Miranda (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Carlos Troncoso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Departamento de Economía)
    Abstract: Working with the ART Local Development Program of UNDP in Uruguay, trying to promote the productive resources available to local economies in terms of endogenous development, we developed a methodology applied to fifteen regions in the country. The methodology provide an overall view of the resources of a region and its contribution to development objectives. A multidimensional and integral approach of development is assumed (Sen, 2000; Brundtland Report, 1987). Moreover, development is understood from a territorial and endogenous perspective (Rodriguez Miranda, 2006). It refers to an economic, political and social project for the region, for what is fundamental the role and prominence of local actors and organizations. The methodology follows a series of stages. First, to identify, systematize and analyze socioeconomic resources (production and service sectors). Second, to define regional development objectives, using the prioritization matrix to choose the actions to further contribute to the objectives. While with the constraint matrix is identified the actions needed to eliminate obstacles and promote local development process. These tools were applied in Uruguay between 2007 and 2010. The article focuses on two cases, the departments of Cerro Largo and Paysandú, as a way to show the potential of the tools to facilitate a process of planning and action for local development. Finally, some concluding remarks on the methodology are presented.
    Keywords: regional development, regional planning and policy, prioritization matrix, constraint matrix, Uruguay
    JEL: R11 R58
    Date: 2014–10

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