nep-geo New Economics Papers
on Economic Geography
Issue of 2014‒12‒24
28 papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Scholarly Publication and Collaboration in Brazil: The Role of Geography By Otavio Sidone; Eduardo Haddad; Jesus Mena-Chalco
  2. The innovation and its territorial factors: An analysis in the micro-regions of São Paulo. By Suelene Mascarini
  3. Industrial Agglomeration and Dispersion in China: Spatial reformation of the "workshop of the world" By ITO Asei
  4. Closure in inter-regional knowledge networks: An application to the European co-publication network By Laurent Bergé
  5. The Economics of Density: Evidence from the Berlin Wall By Ahlfeldt, Gabriel; Redding, Stephen J.; Sturm, Daniel M; Wolf, Nikolaus
  6. Welfare Benefits of Agglomeration and Worker Heterogeneity By De Groot, Henri L.F.; Ossokina, Ioulia V.; Teulings, Coen N
  7. The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy By Caliendo, Lorenzo; Parro, Fernando; Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel
  8. Regional labour markets in Brazil: the role of skills and agglomeration economies By Ana Maria Bonomi Barufi
  9. Does the EU have homogeneous urban structure area? The role of agglomeration and the impact of shocks on urban structure By Marco Modica
  10. The Spatial Dimension of US House Price Developments By Katharina Pijnenburg
  11. New firm formation and its effect on employment growth in declining regions By Heike Delfmann; Sierdjan Koster
  12. European Cluster Networks ? Insights from 7th EU Framework Program By Mirko Titze; Matthias Brachert
  13. Does Connectivity Impact Innovation Performance in Rural Regions? By Pia Wassmann; Daniel Schiller; Stephan Thomsen
  14. Innovation in creative cities: Evidence from British small firms By Lee, Neil; Rodriguez-Pose, Andres
  15. Testing and explaining economic resilience with an application to Italian regions By Di Caro, Paolo
  16. The Determinants of Agglomeration Redux: Transportation, Trade, and Input-Output Linkages By Kristian Behrens; Mark Brown; Théophile Bougna
  17. Market potential, start-up size and the survival of new firms By Klaesson, Johan; Klaesson, Charlie
  18. Local quality of government and migration. Evidence for European regions By Ketterer, Tobias; Rodriguez-Pose, Andres
  19. What types of firms tend to be more innovative: A study on Germany By Stephan Brunow; Valentina Nafts
  20. The role of proximity relations in regional and territorial development processes By André Torre; Fred Wallet
  21. Determinants of Local Multipliers By Jasper Van Dijk
  22. Spatial Typology of the Ageing Process in the European Union on the Level NUTS 2 Regions By Ivan ?otkovský
  23. Spatial impacts of economic crisis. Scenarios for the Portuguese Regions By Tomaz Dentinho; João Borba
  24. The Concept of Fuzzy Central Place as the Approach to Analyze Distribution of Central Functions within Urban Agglomerations By Pavel Em
  25. Technological progress and regional disparities in (un)employment By Uwe Blien; Oliver Ludewig
  26. Research intensive clusters and regional innovation systems: a case study of mechatronics in Apulia By Massimo Florio; Julie Pellegrin; Emanuela Sirtori
  27. The Motives for the FDI Location Choice in the `Old' and `New' Europe By Ilona Elzbieta Serwicka; Jonathan Jones; Colin Wren
  28. Multi-level Governance in rural development: Analysing experiences from LEADER for a Community-Led Local Development (CLLD) By Pollermann, Kim; Raue, Petra; Schnaut, Gitta

  1. By: Otavio Sidone; Eduardo Haddad; Jesus Mena-Chalco
    Abstract: Brazilian scholarly outputs have had rapid growth that was accompanied by an expansion of domestic research collaboration. In this paper, we identify spatial patterns of research collaboration in Brazil, as well as measure the role of geographical proximity in determining the interaction among Brazilian researchers. Using a database comprised of over one million researchers and seven million publications registered in the Brazilian Lattes Platform, we collect and consolidate information on inter-regional research collaboration in terms of scientific co-authorship networks among 4,616 municipalities over the period between 1992 and 2009, which enabled a range of data analysis unprecedented in literature. The effects of geographical distance on collaboration are measured for different knowledge areas under the estimation of spatial interaction models. The main results suggest strong evidence of geographical deconcentration of collaboration in recent years with an increased participation of authors in scientifically less traditional regions, such as South and Northeast Brazil. Additionally, the distance still is significant in determining the intensity of knowledge flows in scientific collaboration networks in Brazil since the increase of 100 kilometers between two researchers implies the average reduction on 16% of the probability of collaboration and there is no evidence that its effect has diminished over time, although the magnitude of such effects varies among networks of different knowledge areas.
    Keywords: spatial scientometrics; scientific collaboration; co-authorship networks; spatial interaction models;
    JEL: R12
    Date: 2014–11
  2. By: Suelene Mascarini
    Abstract: This paper aims to examine empirically, through the application of the Knowledge Production Function, how the innovation in micro-region of São Paulo can be affected for some territorial factors. In the literature, and assumed here, the innovative results, measured by patents, are linked to the quantity and quality of innovative inputs and characteristics of the regions that are configured as an input. In this sense, stands the importance of positive externalities that are generated by the spatial concentration of producers and support institutions that are able to contribute to the efforts of innovative firms. In addition, this paper emphasizes the role of local production structures in the regions of São Paulo, since both the regional diversification and regional specialization are mentioned as important factors in the innovation process. The main results suggested that although the level of R&D investments were important for generating local innovation, ie, the generation of local patents, this relationship does not occur clearly in the regions of São Paulo. In addition, local productive structure or density linkages of firms that interacts are certainly important factors and compensatory for innovation process.
    Keywords: Geography and Innovation; Patents; Knowledge Production Function.
    JEL: O31 R12 R15
    Date: 2014–11
  3. By: ITO Asei
    Abstract: With rising labor costs in China, some scholars assert that its labor-intensive industries will succumb to latecomer economies, and China's era as the "workshop of the world" will end. There is, however, little agreement regarding whether labor-intensive industries, now concentrated along the coast, are relocating to other regions. How does agglomeration affect this relocation? How does this relocation process affect the Asian Production Network (APN)? To approach these issues, this paper examines the determinants of industrial relocation in China by using province- and city-level data from 2004 to 2010, which some scholars call the "post-Lewisian turning point." We particularly focus on the significant gap in economic development in China, especially in regard to industrial agglomeration and dispersion. The results show that the capital-labor ratio is positively related to industrial growth in the coastal areas but negatively related in the central regions. Although agglomeration economies have been weak, the absolute scale of local industry includes a positive effect. In sum, both dispersion and agglomeration forces are observed, suggesting the existence of multi-force dynamics of spatial relocation in China.
    Date: 2014–11
  4. By: Laurent Bergé
    Abstract: The question of the determinants of inter-regional knowledge flows has received a growing interest in the recent past. Particularly, the question of the relationship between geography and networks has been debated. Yet, at the inter-regional level, there is no study assessing the effect of networks on the the value of knowledge flows. This may come from the fact that methodological tools assessing network characteristics at the dyadic level are lacking for aggregated networks (such as the network of inter-regional knowledge flows). This paper aims to fill this gap and contribute to the debate on the determinants of knowledge flows. To do so we first define a new measure to assess 'network proximity' at the level of the regional dyad, based on the concept of inter-regional bridging path. Here a bridging path is a path at the micro-level between two regions via a third one. For instance, if an agent from region B has collaborated with an agent from region A and an agent from region C, then there is a bridging path between A and C via B. By using the information at the aggregated level, and assuming a 'random matching process' of the agents at the micro level, we are able to derive a closed form of the total expected number of bridging paths between two given regions. By the concept of triadic closure at the micro-level, the regional pairs having a high number of bridging paths should be more prone to collaborate. We then illustrate the measure theoretically defined by making use of co-publications data from chemistry journals for the period 2001-2005, within the five largest European countries (France, Germany, Italy, Spain, the United Kingdom). The studied network is then composed of all the regional pairs among 386 active NUTS3 regions. Using a zero-inflated negative binomial regression model along gravity equations, we then assess the effect of geographical distance, spatial contiguity and national borders. We also assess the effect of 'network proximity' by using the expected number of bridging paths as a proxy. As in previous studies, the effects of the geographical distance or the national borders are negative. But we show that the measure of 'network proximity' has a positive and significant effect. All the more, it also significantly alleviates the impeding effect of national borders on cross-countries collaborations, then suggesting that 'network proximity' is a channel favored for international collaborations.
    Keywords: network formation; gravity model; regional closure; aggregated networks; spatial proximity; network proximity; co-publication; research collaboration
    JEL: D85 O31 R12
    Date: 2014–11
  5. By: Ahlfeldt, Gabriel; Redding, Stephen J.; Sturm, Daniel M; Wolf, Nikolaus
    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.
    Keywords: agglomeration; cities; commuting; density; gravity
    JEL: N34 O18 R12
    Date: 2014–08
  6. By: De Groot, Henri L.F.; Ossokina, Ioulia V.; Teulings, Coen N
    Abstract: The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these effects. The model is estimated using data on transport infrastructure, commuting behavior, wages, land use and land rents for 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits are shown to differ sharply by workers' educational attainment.
    Keywords: agglomeration; land rates; local public goods; residential sorting; spatial equilibrium
    JEL: H4 H54 R13 R23 R4
    Date: 2014–10
  7. By: Caliendo, Lorenzo; Parro, Fernando; Rossi-Hansberg, Esteban; Sarte, Pierre-Daniel
    Abstract: We study the impact of regional and sectoral productivity changes on the U.S. economy. To that end, we consider an environment that captures the effects of interregional and intersectoral trade in propagating disaggregated productivity changes at the level of a sector in a given U.S. state to the rest of the economy. The quantitative model we develop features pairwise interregional trade across all 50 U.S. states, 26 traded and non-traded industries, labor as a mobile factor, and structures and land as an immobile factor. We allow for sectoral linkages in the form of an intermediate input structure that matches the U.S. input-output matrix. Using data on trade flows by industry between states, as well as other regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We find that such elasticities can vary significantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the US economy.
    Keywords: input-output; linkages; migration; propagation; trade
    JEL: E0 F1 F16 R12 R13
    Date: 2014–06
  8. By: Ana Maria Bonomi Barufi
    Abstract: The study of disparities in the equilibrium of regional labor markets is crucial in a developing country as Brazil, where personal and regional inequalities are extremely pronounced, even with the recent efforts to alleviate them. Following the recent literature on the determinants of productivity differentials in a regional context, 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 employer-employee panel database from the Ministry of Labor (RAIS - Annual Report on Social Information, filled by all registered firms in Brazil) with information for six year (2003, 2004, 2005, 2008, 2009 and 2012). The first part of the paper presents a discussion how higher wages can be found in denser areas, where the economic activity is more concentrated. Then, a literature review of agglomeration economies provides the main line of analysis to be pursued With the panel data setting, it is not only possible to account for individual unobserved characteristics constant in time, but also for sectorial and municipal fixed effects. Moreover, identifying skills according to the occupational position of the individuals in each firm, we 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: Regional Economic Activity (R11); Skills (J24); Wage Differentials (J31)
    Date: 2014–11
  9. By: Marco Modica
    Abstract: The urban structures between the Member States of the European Union is very different for historical, geographical, economic reasons. However, the population is spread across geographic areas in a way that, although continuously changing, is not possible to define as random. Indeed, countries have faced a strong tendency toward agglomeration, namely population gathers within proper areas like cities, and currently the agglomeration within cities "is an extremely complex amalgam of incentives and actions taken by millions of individuals, businesses, and organizations" Eeckhout (2004, p. 1429). Then, the creation of the European Union, the distortions caused by the introduction of a single currency in countries structurally so different and the expansion of mobility of people, capital and services due to the constitution of the so-called Schengen Area from the beginning of '90s might have had some impacts on the dynamics of city populations. This paper provides a study of the hierarchical structure of the cities within the EU Member States with particular attention on agglomeration forces by means of two very well-known empirical regularities: Zipf's law, as a proxy for agglomeration forces, and Gibrat's law as a test for stationarity. Indeed, the Zipf coefficient can be seen as a measure of urbanization: the larger the value of the coefficient, the more even the population of cities in the urban system. There are several potential explanations for variations in its value, one of these can be found in a model of economic geography a la Krugman (1991) and Fujita et al. (1999). These models can be viewed as models of unevenness in the distribution of economic activity and moreover, they state that for certain parameter values, economic activity is agglomerated, while for other parameter values, economic activity is dispersed (i.e. a city system will be more agglomerated the greater are scale economies, the lower are transport costs and the lower the share of international trade in the economy) By means of parametric and non-parametric analysis the main conclusions of this paper are the following: the hierarchical structures of Member States is more even than expected. Moreover, the European Union seems to be split in three distinct areas: an area characterized by the validity of Gibrat's law (temporary idiosyncratic shocks might have permanent impacts on the city structure); an area characterized by the presence of mean reversion (any exogenous shock is used up in certain amount of time); a small area where the effects of the shocks is magnified in the big cities. Finally, we find that only the constitution of the Schengen Area and the share of international trade seem to have a weak impact on the hierarchical structures of Member States.
    Keywords: City size distributions; European city growth; Zipf?s Law; Gibrat?s Law
    JEL: C46 D30 R11 R12
    Date: 2014–11
  10. By: Katharina Pijnenburg
    Abstract: Spatial heterogeneity and spatial dependence are two well established aspects of house price developments. However, the analysis of differences in spatial dependence across time and space has not gained much attention yet. In this paper we jointly analyze these three aspects of spatial data. We apply a panel smooth transition regression model that allows for heterogeneity across time and space in spatial house price spillovers and for heterogeneity in the effect of the fundamentals on house price dynamics. We find evidence for heterogeneity in spatial spillovers of house price developments across space and time: house price developments in neighboring regions spill over stronger in times of increasing neighboring house prices compared to declining neighboring house prices. This is interpreted as evidence for the disposition effect. Moreover, heterogeneity in the effect of the fundamentals on house price dynamics could not be detected for all variables; real per capita disposable income and the unemployment rate have a homogeneous effect across time and space.
    JEL: C23 R12 R31
    Date: 2014–11
  11. By: Heike Delfmann; Sierdjan Koster
    Abstract: New firm formation is often highly prioritized by local governments, particularly for regions that are declining. Entrepreneurship can play an important role in keeping declining regions vital through job creation. Yet, the way in which new firm formation exerts its influence on employment growth is not yet evident. Are start-ups in those areas equally productive in influencing employment change as they are in growing regions? Although there is a large and growing body of research on new firm formation and employment, there is still a knowledge gap concerning the impact of the context on the effect of new firm formation. Previously the focus has been on growth. New firm formation can contribute direct and indirectly to regional employment. The indirect effects are thought to have a larger impact on the long term, and indirect effects are not per sé positively related to employment growth. Focusing on the regional context, we investigate whether the relationship differs depending decline or growth, and by the degree of urbanization, to determine both long and short term employment effects. In order to establish the impact of new firm formation on employment rates, the paper examines panel data of firm dynamics and employment growth retrieved from the LISA database covering the whole of the Netherlands on a municipality level (418 regions) between 1996-2010. This data is complemented with data on population density, size, growth and decline from the Statistic Netherlands.
    Keywords: Employment growth; population decline; new firm formation; urban and rural regions; direct and indirect effects;
    JEL: M13 R11 O18
    Date: 2014–11
  12. By: Mirko Titze; Matthias Brachert
    Abstract: The EU Framework Programme (FP) belongs to the most important instruments promoting transnational collaborative R&D projects in Europe. Its main objective is to initiate cross-border complementarities in order to exploit knowledge resources and to conduct large scale research. Within the EU FPs the applicants are free to choose partners from all over Europe. The key question of our paper is: Which determinants affect the emergence of intra- and interregional collaborations within EU Framework Programmes? One might assume that geographical factors do not matter since trade barriers have been eliminated in the Single European Market. Though, there is a controversial debate on the importance of geographical proximity for the exchange of knowledge. Our paper relies on two theoretical concepts. First, we apply the global cluster networks conception developed by Bathelt and Li (2013). Within this concept it is argued that clustered organizations are more likely to set up collaborative R&D efforts with other similar clustered organizations to keep up with wider industry developments. Conversely, non-cluster organizations are less likely to get integrated cluster destinations. Second, we tie in with the proximity debate discussed in Boschma (2005). According to this concept geographical proximity addresses only one facet. Beyond physical distance other forms of proximity are existent such as social, cognitive, organisational and institutional proximity. It is argued that physical distance is neither a necessary nor a sufficient condition for interactive learning processes. Though, it may facilitate the other dimensions of proximity. In line with these strands of research we investigate the determinants of the number of cross-region collaborations within EU FPs. The analysis is focused on regional level (NUTS 2). Moreover, we differentiate between two technology fields, biotechnology and aerospace. In doing so, we are capable to capture technology specific characteristics. We apply a spatial interaction modelling framework that bases on a gravity type (Scherngell and Barber 2009). The empirical analysis is carried out using a negative binomial specification. We found evidence that geographical factors still matter ? but technological proximity seems to be more importantly. Moreover, we prove that the mere size in terms of employment and establishments is not necessarily required to establish cross-region collaborations. Also small actors have been chosen as partners in collaborative R&D networks across Europe.
    JEL: D85 L14 R12 R15
    Date: 2014–11
  13. By: Pia Wassmann; Daniel Schiller; Stephan Thomsen
    Abstract: There is a broad consensus in the literature in that R&D is a precondition for innovation and in turn, for economic growth. On the regional level, this implies that regions with a high stock of R&D should reveal better results when it comes to economic performance. This presumption has lead policy-makers to focus especially on strengthening the regional stock of R&D as an instrument to foster the regional innovation performance. However, the relation between regional R&D and economic growth may not be as straightforward and an exclusive concentration on R&D may not be appropriate for stimulating regional innovation. Thus, empirical evidence shows that some regions perform well in economic terms, irrespective of their relatively low values of R&D. One of these regions is the German region of Lower Bavaria. This region performs well above the German average in terms of economic growth and employment. At the same time, the regional performance on the traditional R&D indicators as patents or the share of human resources in science and technology is below average. Yet, despite the disadvantageous values on the latter, a recent study of regional firms has indicated that over 60% have introduced either a technological or non-technological innovation in the past three years. One explanation for this contra-intuitive finding emerges from the potential connectivity of regional firms, enabling them to acquire R&D from external knowledge sources. This aspect is in focus of this paper. Thus, based on original firm-level data, we investigate how connectivity impacts innovation performance of firms in the low R&D region of Lower Bavaria. The idea that innovation is a result of an interactive process and that firms have to acquire external knowledge in order to innovate is certainly not new. However, despite the fact that regional connectivity especially of low R&D regions has gained considerable importance, not at least reflected by the current EU innovation policy debate, there are only a few studies that assess the association between cooperation and innovation in regions with low internal R&D in a systematic, quantitative manner. Rather, the majority of studies focus on high-tech regions with strong initial R&D. With the emphasis on a rural region with mainly low- and medium-tech industries, this paper aims to bridge this gap and to study the relation in a type of region that has not been comprehensively examined, yet. Moreover, by distinguishing between the geographical and functional dimension of cooperation as well as by the consideration of both, technological and non-technological forms of innovation, we provide a more encompassing view on how firms in this type of regions use cooperation to increase their innovation potential.
    Keywords: innovation; connectivity; low-tech industries; rural region; R&D; Germany;
    JEL: R11 O18 O31 L25
    Date: 2014–11
  14. By: Lee, Neil; Rodriguez-Pose, Andres
    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: cities; creative cities; creative industries; creativity; innovation
    JEL: O31 O38 R11 R58
    Date: 2014–11
  15. By: Di Caro, Paolo
    Abstract: This paper studies regional economic resilience by exploiting the properties of the nonlinear smooth-transition autoregressive model. A testing procedure to distinguish between engineering and ecological resilience is presented, and a measurement of economic resilience is provided. Regional differences in economic resilience are explained by the presence of spatial interactions and by adopting a set of determinants like economic diversity, export performance, financial constraints, and human and social capital. An empirical investigation is conducted for analysing regional employment evolution in Italy from 1992 to 2012. Some concluding suggestions propose possible future areas of research.
    Keywords: regional resilience, hysteresis, smooth transition regression
    JEL: C34 R1
    Date: 2014
  16. By: Kristian Behrens; Mark Brown; Théophile Bougna
    Abstract: We study the determinants of agglomeration of Canadian manufacturing industries from 1990 to 2009. In so doing, we revisit the seminal contribution by Rosenthal and Strange (2001, "The determinants of agglomeration", J Urban Econ 50(2), 191?229) using a long panel and continuous measures of localization. We pay particular attention to the role of transporation costs ? constructed using extensive Canadian trucking microdata ? international trade exposure, and input sharing ? constructed using micro-geographic location patterns of plants. We find that between 1990 and 2009, industry localization has persistently fallen. The average degree of localization decreased by 36% within 10km, by 22.6% within 100km, and by 11.3% within 500km. Declining localization is associated with import competition, particularly from low wage countries, increasing transportation costs and the spreading out of upstream input suppliers and downstream demand for intermediate inputs. While we find strong evidence of trade-driven changes in localization, we find less evidence for knowledge spillovers and labour market pooling as drivers in changes in localization.
    JEL: R12 R30 L11
    Date: 2014–11
  17. By: Klaesson, Johan (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS)); Klaesson, Charlie (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: Abstract: Many phenomena in the economy are influenced by geography. The size of new firm start-ups vary in many dimensions, among them industry and geography. The purpose of this paper is to explore the determinants of the geographical distribution of the size of new firms. Re¬gional size itself can be expected to influence the size of the new firm. Given that there are fixed costs present in the new firms small and low-density regions will demand a larger size of the new firm. The reason for this is that in small regions the firm may not be able to find customers nearby, but need to sell its produce over some distance. This means that the firm must house capacities to do so and this increases the fixed cost component and hence forces the firm to produce a larger amount of the output. Another possible reason can be found in the availability of producer services. In small regions, the number of producer services is more limited and, hence, force the firms to produce some of these services in-house. Gener¬ally, the overall diversity found in small regions is smaller compared to large re-gions. This means that the variation in goods and services available in the market will be smaller, once again forcing the new firm to do more things within the firm. In addition, it is ex¬pected that there is a relationship between entry rate and the size of the entrants.
    Keywords: Entry; Start-up size; Market Potential; Region; Industry; Sweden
    JEL: C21 L11 M13 R11 R12
    Date: 2014–11–26
  18. By: Ketterer, Tobias; Rodriguez-Pose, Andres
    Abstract: In this paper we investigate the impact of local quality of government on the attractiveness of European regions to migrants. The analysis is based on panel data estimations of 254 regions for the period between 1995 and 2009. Different instrumental variable techniques have been employed in order to assess the extent to which differences in local quality of government affect migration decisions and to account for potential endogeneity concerns. The results point towards an important influence of specific factors related to the regional quality of government, such as the fight against corruption or government effectiveness, on the ability of European regions to attract future residents.
    Keywords: Europe; Institutions; Net migration; Population change; Quality of Government; Regions
    JEL: O43 R23 R50
    Date: 2014–05
  19. By: Stephan Brunow; Valentina Nafts
    Abstract: Innovation is a key driver of technological progress and growth in a knowledge-based economy. There are various motives for individual firms to innovate: improving quality secures market leadership, introducing new products leads the firm into new markets, adopting new technologies could be seen as a catch-up strategy within an industry or an improvement of the firm's own products when the technology adopted is based on ideas from other industries. Firms can perform innovation activities in one or more of these areas or in none of them. We therefore raise the question of what types of firms tend to be more innovative, i.e. which firms innovate in more of these areas. For this purpose we employ firm-level survey data and combine it with administrative data from Germany's social security system. An ordered logit model is estimated using a variety of characteristics which describe the workforce employed and other firm-related variables, the regional environment where the firm is located, as well as industry and region fixed effects.
    Keywords: firm innovation; labor diversity; ordered logit; regional economic environment
    JEL: J O R
    Date: 2014–11
  20. By: André Torre; Fred Wallet
    Abstract: Proximity analyses have nowadays turned out to be a part of the toolbox of regional scientists and this notion recently became very popular in the position of politics, and private or public stakeholders. In parallel, the notion of proximity spread in the academic literature and is now commonly used by scholars in regional science, geography or spatial economics. Interest is affecting now the works dedicated to innovation process, links between science and industry, relations between users and producers or sub-contractors, national systems of innovation, innovative milieus, about also local labour markets or urban policies. But despite the substantial literature on proximity processes and relations, only a few academic works have been devoted to studying the link between regional development and proximity relations. We consider that the integration of the notion of proximity into the framework of regional development analysis provides interesting input due to its plasticity and ability to draw connections between spatial, economic and social dimensions; but also suggests ways of possible changes for regional and territorial policies. The main outline is to try to assess the importance of proximity relations (or obstacles led by proximity relations) in regional development processes, and discuss approaches of different disciplines. We aim to re-situate the analysis of proximity within the various theoretical approaches to the territory and, in particular, to highlight its place and the role it could play in the study of regional and territorial development processes, and possibly its contribution to public policies or collective action. It seems interesting to investigate the relation between proximity analyses and regional or local and territorial development; taking into account long distance relations and clusterisation processes has led to a renewal of development approaches. This investigation consists of three main axes of inquiry related to the ability to go beyond the sterile opposition between the local only and the decisive influence of distance relations. Are the themes addressed in these approaches wide and diverse enough to account for the mechanisms that reflect the diversity and complexity of the processes of local development (or are they, on the contrary, too specific to certain areas)? Are the (conceptual and analytical) tools, models and applied (qualitative and quantitative) studies based on an analysis of the phenomena of regional development through proximity sufficiently robust and objectifiable (and can they be used to generate valuable measures)? Can the results of proximity based analyses be translated into recommendations for decision-making and coordination between stakeholders, including in the field of public action or policies?
    Keywords: Regional development; proximity; innovation; governance
    JEL: R1 R5
    Date: 2014–11
  21. By: Jasper Van Dijk
    Abstract: A key aspect of understanding how regions grow is the interplay between jobs in the tradable and jobs in the non-tradable sector. Jobs in the tradable sector supply the world market and can therefore move from region to region, but every region has a local demand for non-tradable goods and the size of the non-tradable sector is directly dependent on the size of the tradable industries. I analyse regions in different parts of the world and regions of different scale. I show that an exogenous increase in the number of jobs in the tradable sector of a region has a significant multiplier on the number of jobs in the non-tradable sector of that same region. This results holds for U.S. counties and European TL2 and TL3 regions. The size of the multiplier is significantly higher in the U.S. than in Europe and the size of the multiplier increases with the scale of the regions considered. Specifically I find multipliers of 1.12 and 1.10 for European TL2 and TL3 regions respectively. In a more detailed analysis of Sweden I find a local multiplier of 0.71. Finally I find a multiplier of 1.91 for United States counties. In short the increased employment in the tradable sector increases the total income in a region and therefore allows for more consumption by the local inhabitants. Depending on the preferences of the inhabitants this will increase demand for non-tradable goods and depending on the technology required to produce these goods, this will increase employment and wages in the non-tradable sector. Therefore the size of the local multiplier will depend on many factors, such as the type of new jobs in the tradable sector, the unemployment rate in a region and whether it is urban or rural. An accurate estimate of the size of the local multiplier is interesting academically, but it is also very useful for policy makers as they need to know the multiplier in the region they are designing policy for and the multiplier of the jobs they would like to attract.
    JEL: J23 R11 R12 R23 R58
    Date: 2014–11
  22. By: Ivan ?otkovský
    Abstract: The article is deal with the spatial differences of the demographic events between European Union regions. We are research spatial diferencies of ageing process between 272 NUTS 2 regions today. The analyses on this spatial level are working with the creation of cartogram method for processing of the demographical data. We can use ArcGIS 10.2 and his version ArcMap 10.2 as a complete system for authoring, serving, and using geographic informations for better processing the spatial data by the help of cartogram method. Our principal main is to group the all 272 EU NUTS 2 regions on the basis children and elderly substitution in population and evaluation of the ageing process. Therefore we are using the basic measurement methods for examination of the age structure. The spatial typology is carried out on the basis of a series of values of the following three basic demographical indices: the children ration, the eledrely ratio, the ageing index (IA) and the dynamic ageing index (DAI). The world's current ageing index is about 30. And only in Europe is more than 100 and in European Union actually 117. This mean, that in Europe we have more elderly people than children. Only eight countries has ageing index less than 100 in European Union now. Ageing index 125 and more has six countries yet.
    JEL: C46 J11 J13 J14 R23
    Date: 2014–11
  23. By: Tomaz Dentinho; João Borba
    Abstract: Unemployment and migration are known effects of financial and economic crisis. This paper tries to understand the spatial patterns of those effects in a city and its surroundings considering the direct and induced impacts, the migration flows between the city, the surroundings and the outside and the multiplier effects that come from the changing rents of the economic landscape. We use a spatial interaction model with rent calibration and the cyclical results of the distribution of rents and unemployment subsidies. We apply the model to Portuguese NUTS 3 regions where the reduction of some basic economic activities is producing direct and induced impacts on unemployment, reduction of active population and migration.
    JEL: R10
    Date: 2014–11
  24. By: Pavel Em
    Abstract: The conception of fuzzy central places (FCP), proposed by P. Em, made possible the understanding of the central functions' (CF) heterogenic distribution inside the urban agglomerations. The FCP is a bounded region of a set of points with CF. The correlation analysis proved a strong relation between the density of service enterprises and the population density. It is assumed that CF value is in direct proportion to the average population density. The index of key centers equilibrium (IKCE) permits to estimate the equilibrium between positions of expected and real focuses of the CF localization. The CF quasi-relief (QR) is a graphic model of a non-uniform dispersal CF spatial distribution. The steadiest modifications of the system with the minimum deviation from the theoretically determined IKCE are found by means of the analysis of the CF QR different relative elevations. "Flooded" areas performed the service area. The range of CF values at a higher level in the FCP system is twice as great as that at the next lower level. With a rising to a higher level, not only the number of facilities increases, but also the quality of provided services grows. The urban agglomerations are the greatest CF focuses. They can be studied as FCP systems. A considerable differentiation of CF value has been found within the limits of the Capital agglomerations of two Korean countries. It has been revealed that average CF values in agglomerations do not necessarily tend to decrease from the center to periphery. The constructed profiles of CF QF show conspicuous variations in CF values between the system elements in agglomerations. An analysis of the CF QR profile averaged over the agglomerations under study reveals a similarity between the CF distribution curve and the curve in the Clark's model. The fractal theory is a useful tool to study FCP systems. The fractal dimension (D) allows defining the degree of the CF distribution's uniformity. The analysis showed that degree of the CF distribution's uniformity in elements of Capital agglomeration of the Republic of Korea in new-built areas is higher than in regions with traditional building. Also, it was found that CF value and D in elements of FCP system have a strong relation: the higher the CF volume in one FCP, the higher the degree of CF distribution's uniformity in neighbor elements is. Analyzing the indexes, a hypothesis about the presence of exponential relationship between the CF value and D was made.
    Keywords: fuzzy central place; central functions quasi relief; index of the key centers equilibrium; urban agglomeration; Korea; fractal
    JEL: R12
    Date: 2014–11
  25. By: Uwe Blien; Oliver Ludewig
    Abstract: One of the key issues in economics is the explanation of unemployment and its variation across different economies. Doing so, modern mainstream macroeconomics refers to the effects of financial crises and to institutional structures and their variation across countries. However, unemployment within the European states varies nearly as much as between these countries. In the interior of a country, however, there are only minor differences in institutions. Therefore, the large variation in regional unemployment and in the development of employment is puzzling. Our explanation of this regional variation of unemployment builds on the regional industry composition and technological progress. It is shown formally that under very general and standard preconditions the elasticity of demand on product markets is decisive: Technological progress leads to an expansion of employment if product demand is elastic. It is accompanied, however, by shrinkage of employment if product demand is inelastic. A transition from the elastic into the inelastic range of the demand function for the most important product(s) can already suffice to plunge a region into crisis. In our empirical analysis we use industry level time series data on output, prices, employment and national income for Germany provided by the Federal Statistical Office and the OECD. We estimate Marshallian type demand functions using an instrumental variables estimator to derive the price elasticities for different industries and link this information to the regional labour market performance of the respective industries and regions.
    JEL: Q33 R11 J23
    Date: 2014–11
  26. By: Massimo Florio (DEAS, Universita' di Milano); Julie Pellegrin (CSIL Centre for Industrial Studies); Emanuela Sirtori (CSIL Centre for Industrial Studies)
    Abstract: This paper discusses some conditions under which the Cohesion Policy of the European Union can effectively contribute to enhance R&I in Europe and the extent to which it offers a relevant framework for devising Research & Innovation policies at regional level overcoming possible tensions and maximising potentials for synergy. To do so, the paper mainly relies on an in-depth illustrative case study of an Italian Southern region, Apulia. The paper describes the regional innovation system put in place by the Apulia Region and analyses the value added that can be attributed to such a system as far as innovation and economic development promotion are concerned; on this basis, findings from the case study are generalised in a set of lessons learned with hopefully more general relevance: these are discussed in Section 4.
    Keywords: Research intensive clusters; regional innovation systems; mechatronics
    JEL: L26 L62 R58
    Date: 2014–11–07
  27. By: Ilona Elzbieta Serwicka; Jonathan Jones; Colin Wren
    Abstract: This paper adds to the scarce cross-country evidence on FDI location decisions between the EU-15 Member States and the ten new Members that joined the European Union (EU) in 2004 and 2007 from the Central and East European Countries (CEECs). To capture the discrete nature of the location choice, a conditional logit methodology is used to analyze the determinants of FDI location decisions across these EU-25 countries. The study uses the European Investment Monitor database, which contains information on the location of over 35,000 individual cross-border investment projects that were implemented in the EU between 1997 and 2010. The purpose is to understand the factors an investing firm considers when choosing a location within the EU-25, and to understand the effect of the European Union accession process on the amount and nature of this investment. A distinction is made between market-based and resource-based factors, while macroeconomic, industry and institutional variables are included to control for other country-level factors that affect FDI location. Overall, allowing for heterogeneity in preferences of investors locating in the ‘old' versus the ‘new' EU Member States, the results show that FDI tends to avoid congested locations in the EU-15 by locating in the periphery away from main markets, but this tendency is not evident for the CEECs. Investment in the EU-15 is predominantly knowledge-seeking, as better educated workforce attracts FDI, whereas in the CEECs the efficiency-seeking motive dominates, as greater education attainment and higher labour costs both deter FDI. An analysis by industrial sector indicates that these factors apply to manufacturing FDI, but that a better educated workforce is actually more attractive for service FDI in the CEECs, indicating that the knowledge-seeking motive may be more important for FDI in the CEECs in future. The estimates on the controls are plausible and they indicate that EU membership increased the flow of FDI to the CEECs. The results show that membership changed the importance of the market-based and resource-based motives for FDI location in the CEECs.
    Keywords: foreign direct investment; location choice; European Union; conditional logit;
    JEL: F23 R30 O52
    Date: 2014–11
  28. By: Pollermann, Kim; Raue, Petra; Schnaut, Gitta
    Abstract: In the last funding periods there was steady increase in the number of LEADER-regions in Europe, and, at least in Germany, it is already evident that this gain will continue: for the 2014-2020 funding period there around 300 LAGs expected in comparison to 244 LAGs in the last period. For the new funding period new regulations envisages a Common Strategic Framework (CSF) to provide all EU Funds with a set of basic rules in line with the general principles - partnership, multi-level governance, equality and sustainability. Now there are common options for a so-called “Community-Led Local Development” (CLLD). Although LEADER is commonly called a bottom-up approach, it has to be pointed out that there is a high influence through a superordinated framework of funding regulations. So more precisely LEADER is neither "top-down" nor "bottom-up", but can classified as a “down up”-approach. This clarifies the basic understanding for the terms used in the context of multi-level governance. Second there is a look on the state of the art of LEADER-related research in the view of LEADER as a "down up" approach. Anyhow the experiences with LEADER in the last 25 years can give valuable insights. Altogether, the literature review already supports the need to have a multi-level-view on CLLD.
    Keywords: Multi level Governance,LEADER,CLLD,rural development
    JEL: R1 R5 R0
    Date: 2014–08

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