nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒12‒08
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Empirics of Agglomeration Economies By Combes, Pierre-Philippe; Gobillon, Laurent
  2. Measuring the sorting effect of migration on spatial wage disparities By Kentaro Nakajima; Ryosuke Okamoto
  3. “Does absorptive capacity determine collaborative research returns to innovation? A geographical dimension” By Erika Raquel Badillo; Rosina Moreno
  4. Subnational Export Performance and Determinants: Evidence from Two Indian States By Pradhan, Jaya Prakash; Zohair, Mohammad
  5. Small-scale food production and location of gourmet restaurants in rural Sweden. By Johansson, Sara; Pettersson, Lars
  6. Wealth differences across borders and the effect of real estate price dynamics: evidence from two household surveys By Mathä, Thomas Y.; Porpiglia, Alessandro; Ziegelmeyer, Michael
  7. Innovation in creative cities: Evidence from British small firms By Neil Lee; Andrés Rodríguez-Pose
  8. Cross-border commuting and consuming: an empirical investigation By Mathä, Thomas Y.; Porpiglia, Alessandro; Ziegelmeyer, Michael
  9. Spatial Growth: The Distribution of Capital across Locations when Saving Rates are Exogenous By Anastasios Xepapadeas; Athanasios Yannacopoulos; Andreas Ioannidis
  10. A territorial approach to R&D subsidies: Empirical evidence for Catalonian firms By Segarra Blasco, Agustí, 1958-; Teruel, Mercedes; Bové Sans, Miquel Àngel
  11. Detecting Collusion in Spatially Differentiated Markets By Agnes Kügler; Matthias Firgo
  12. Foreign and Native-Born STEM Graduates and Innovation Intensity in the United States By Winters, John V.
  13. A Comparison of the Wage Structure between the Public and Private Sectors in Japan By Masayuki Morikawa

  1. By: Combes, Pierre-Philippe (GREQAM, University of Aix-Marseille); Gobillon, Laurent (INED, France)
    Abstract: We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and workers' endogenous location choices. We emphasise the impact of local density on productivity but we also consider many other local determinants supported by theory. Empirical issues are then addressed. Most important concerns are about endogeneity at the local and individual levels, the choice of a productivity measure between wage and TFP, and the roles of spatial scale, firms' characteristics, and functional forms. Estimated impacts of local determinants of productivity, employment, and firms' locations choices are surveyed for both developed and developing economies. We finally provide a discussion of attempts to identify and quantify specific agglomeration mechanisms.
    Keywords: agglomeration gains, density, sorting, learning, location choices
    JEL: R12 R23 J31
    Date: 2014–09
  2. By: Kentaro Nakajima (Graduate School of Economics, Tohoku University); Ryosuke Okamoto (National Graduate Institute for Policy Studies)
    Abstract: Observed spatial wage disparities reflect not only disparities in regional productivity but also an uneven geographical distribution of heterogeneous worker skills. We measure spatial skill disparities in Japan and evaluate how migration contributes to these disparities. For this purpose, we regress the individual wage on the residential region dummy variables and a series of individual characteristics to decompose the wage into regional productivity and the workers’ skills. The estimation illustrates that by removing the skill heterogeneities, the productivity disparity is approximately half of the observed wage disparity. Workers living in metropolitan areas have 9.7% higher skills than those in nonmetropolitan areas on average. The spatial skill disparity that stems from individuals’ hometowns is approximately 4.2%. Hence, migration increases the spatial skill disparity from 4.2% to 9.7%, which is an increase of 5.5 percentage points. Furthermore, we investigate migration effects in terms of the workers’ characteristics and find that most sorting effects of migration come from highly educated and regularly employed male workers.
    Date: 2014–10
  3. By: Erika Raquel Badillo (Department of Econometrics. University of Barcelona); Rosina Moreno (Department of Econometrics. 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: 2014–10
  4. By: Pradhan, Jaya Prakash; Zohair, Mohammad
    Abstract: Traditionally, the export performance of the economies were analysed taking individual countries as the locational unit, which were not able to explain the subnational, regional or spatial disparities within the geographically vast countries like India, because huge amount of heterogeneity exist among different states in terms of economic development, infrastructure, skill, knowledge and subnational policies. The analysis of the two selected states, namely Uttar Pradesh and Tamil Nadu indicates that their differential performance in manufacturing exports can be related to their contrasting heterogeneity in terms of above spatial factors. Findings also suggest that firms’ exporting in these two states are shaped by a number of firm level parameters such as firm age, firm size, R&D intensity, foreign and business group affiliation, etc.
    Keywords: Subnational Exports; spatial factors; India
    JEL: F10 O53 R10
    Date: 2014–11–17
  5. By: Johansson, Sara (Jönköping International Business School (JIBS) and Centre of Excellence for Science and Innovation Studies (CESIS).); Pettersson, Lars (Jönköping International Business School (JIBS))
    Abstract: This study explore the location pattern of gourmet restaurants in Sweden by using information about restaurant quality from the White Guide. The purpose of the paper is to analyze which factors that influence the location pattern of gourmet restaurants, with particular focus on the influence of small-scale food producers. This variable can be expected to be of substantial importance in creating comparative advantages related to geographical location. Econometric estimates of a zero-inflated Poisson regression show that the number of small-scale food producers in a location significantly increases the number of gourmet restaurants in locations with non-zero count. Moreover, factors related to the demand side, such as market size and tourism significantly increases the number of gourmet restaurants in a municipality once the probability of a non-zero count is accounted for. The tourism sector appears to be of particular strong importance in rural areas where the size of the permanently residing population is insufficient for creating business opportunities for restaurateurs striving for the upper quality segment.
    Keywords: Culinary markets; restaurants; small-scale food production; tourism; regional development; innovation systems; agglomeration economies
    JEL: L66 R10
    Date: 2014–11–07
  6. By: Mathä, Thomas Y.; Porpiglia, Alessandro; Ziegelmeyer, Michael
    Abstract: Crossing borders, be it international or regional, often go together with price, wage or indeed wealth discontinuities. This paper identifies substantial wealth differences between Luxembourg resident households and cross-border commuter households despite their similar incomes. The average (median) net wealth difference is estimated to be €367,000 (€129,000) and increases for higher percentiles. Using several different regression and decomposition techniques, spatial (regional) differences in real estate price developments, and thus differences in accumulated nominal capital gains are shown to be one main driving factor for these wealth differences. Other factors contributing to the observed wealth differences are differences in age, income, education and other household characteristics. JEL Classification: D31, J61, F22, R23, R31
    Keywords: cross-border commuting, household survey, real estate price dynamics, wealth
    Date: 2014–05
  7. By: Neil Lee; Andrés Rodríguez-Pose
    Abstract: Creative cities are seen as important sites for the generation of new ideas, products and processes. Yet, beyond case studies of a few high-profile cities, there is little empirical evidence on the link between local creative industries concentration and innovation. This paper addresses this gap with an analysis of around 1,300 UK SMEs. The results suggest that firms in local economies with high shares of creative industries employment are significantly more likely to introduce entirely new products and processes than firms elsewhere, but not innovations which are simply new to the firm. This effect is not exclusive to creative industries firms and seems to be largely due to firms in medium sized, rather than large, cities. The results imply that creative cities may have functional specialisations in new content creation and so firms are more innovative in them.
    Keywords: Creativity, Creative Cities, Creative Industries, Cities, Innovation
    JEL: O31 O38 R1 R11 R58
    Date: 2014–11
  8. By: Mathä, Thomas Y.; Porpiglia, Alessandro; Ziegelmeyer, Michael
    Abstract: This paper analyses empirically how cross-border consumption varies across product and services categories and across household characteristics. It focuses on the part of cross-border sales that arise due to work-related cross-border crossings; it analyses the cross-border consumption behaviour of cross-border commuter households residing in Belgium, France and Germany and working in Luxembourg. In total, it is estimated that these households spend €925 million per annum in Luxembourg, reflecting about 17% of their gross annual income from Luxembourg and contributing about 10% to total household final consumption expenditure in Luxembourg. Cross-border consumption expenditure is shown to depend on individual and household characteristics, such as total household income, the number of cross-border commuters in the household, distance between home and work, as well as price level (index) differences between Luxembourg and its neighbouring countries. Cross-border commuters take advantage of existing arbitrage opportunities. JEL Classification: F15, R12, R23, J61
    Keywords: commuting, consumption, cross-border shopping, expenditure, households
    Date: 2014–03
  9. By: Anastasios Xepapadeas; Athanasios Yannacopoulos; Andreas Ioannidis
    Abstract: Economic growth has traditionally been analyzed in the temporal domain, while the spatial dimension is captured by cross-country income differences. Data suggest great inequality in income per capita across countries, with a slight but noticeable increase over time (Acemoglu 2009). Seeking to explore the mechanism underlying the temporal evolution of the cross sectional distribution of economies, we develop a spatial growth model where saving rates are exogenous. Capital movements across locations are governed by having capital moving towards locations of relatively higher marginal productivity, with a velocity determined by the existing stock of capital and its marginal productivity. This mechanism leads to a capital accumulation equation augmented by a nonlinear diffusion term, which characterizes spatial movements. Our results suggest that under diminishing returns, the growth process leads to a stable spatially non-homogenous distribution for per capita capital and income in the long run. AK production functions and increasing returns lead to strong persistent and increasing concentration of capital in a very few locations. Insufficient savings may lead to the emergence of poverty cores where capital stock is depleted in some locations.
    Keywords: Economic growth, space, capital flows, nonlinear diffusion, Solow model, steady-state distributions, stability
    JEL: O4 R1 C6
    Date: 2014–11–08
  10. By: Segarra Blasco, Agustí, 1958-; Teruel, Mercedes; Bové Sans, Miquel Àngel
    Abstract: Using a database of 2,263 responses to R&D public calls in Catalonia, during the period 2007–2010, this paper proceeds to analyse the potential interaction of the territorial and policy dimensions with the propensity to apply for, and be awarded, a public R&D subsidy. Controlling for characteristics at the firm and project level, we estimate models using a two-step procedure. In the first step, our results suggest that large firms which export and which belong to high-tech manufactures are more likely to participate in a public R&D call. Furthermore, both urban location and past experience of such calls have a positive effect. Our territorial proxy of information spillovers shows a positive sign, but this is only significant at intra-industry level. Membership of one of the sectors prioritized by the Catalan government, perhaps surprisingly, does not have a significant impact. In the second step, our results show that cooperative projects, SMEs or old firms shows a positive effect on the probability of obtaining a public subsidy. Finally, the cluster policy does not show a clear relationship with the public R&D call, suggesting that cluster policies and R&D subsidies follow different goals. Our results are in line with previous results in the literature, but they highlight the unequal territorial distribution of the firms which apply and the fact that policymakers should interlink the decision criteria for their public call with other policies. Keywords: Evaluation, R&D policies, territorial approach, clusters JEL Classifications: L53, L25, O38
    Keywords: Innovacions tecnològiques -- Política governamental, Sistemes productius locals, Política industrial, Empreses -- Dimensió -- Catalunya, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2014
  11. By: Agnes Kügler (Department of Economics, Vienna University of Economics and Business); Matthias Firgo (WIFO - Austrian Institute of Economic Research)
    Abstract: The empirical literature on mergers, market power and collusion in differentiated markets has mainly focused on methods relying on output and/or panel data. In contrast to this literature we suggest a novel approach that allows for the detection of collusive behavior among a group of firms making use of information on the spatial structure of horizontally differentiated products. By estimating best response functions using a spatial econometrics approach, we focus on differences in the strategic interaction in pricing between different groups of firms as well as on differences in price levels. We apply our method to the market for ski lift tickets using a unique data set on ticket prices and detailed resort-specific characteristics covering all ski resorts in Austria.
    Keywords: tacit collusion, strategic alliances, spatial differentiation, ski lift ticket prices
    JEL: C21 D43 L11 L41 L83 R32
    Date: 2014–10
  12. By: Winters, John V. (Oklahoma State University)
    Abstract: This paper examines the effects of foreign- and native-born STEM graduates and non-STEM graduates on patent intensity in U.S. metropolitan areas. I find that both native and foreign-born STEM graduates significantly increase metropolitan area patent intensity, but college graduates in non-STEM fields have a smaller and statistically insignificant effect on patenting. These findings hold for both cross-sectional OLS and 2SLS regressions. I also use time-differenced 2SLS regressions to estimate the effects of STEM-driven increases in native and foreign college graduate shares and again find that both native and foreign STEM graduates have statistically significant and economically large effects on innovation. Together these results suggest that policies that increase the stocks of both foreign and native STEM graduates increase innovation and provide considerable economic benefits to regions and nations.
    Keywords: STEM, innovation, patents, human capital, higher education
    JEL: I25 J24 J61 O31 R12
    Date: 2014–10
  13. By: Masayuki Morikawa
    Abstract: This paper compares the wage structure between the public and private sectors in Japan by using a large microdata set covering public and private sector employees. Rather than comparing overall wage levels, we examine the differences in relative wages by gender, age, education, and region. According to the estimation of wage functions, wage gaps by gender and educational attainment are smaller in the public sector than in private companies. The public sector’s age-wage profile is steeper than that of the private sector. Public sector wages are more compressed; the wages are relatively higher at the lower end of the wage distribution and relatively lower at the higher end. The regional wage differential is smaller in the public sector. As a result, the wage level of public sector workers is relatively higher in rural regions and relatively lower in large metropolitan regions. To ensure the efficient provision of public services, it is inappropriate to compare only average wages. We should carefully observe the differences in wage structure by individual characteristics and by region.
    JEL: J31 J45 R23
    Date: 2014

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