nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒02‒11
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Corporate Taxation and Firm Location in Germany By Götz Zeddies
  2. Small-area measures of income poverty By Alex Fenton
  3. Do inventors talk to strangers? on proximity and collaborative knowledge creation By Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose
  4. Cultural diversity, cities and innovation: firm effects or city effects? By Neil Lee
  5. Joint R and D subsidies, related variety, and regional innovation. By Tom Broekel; Matthias Brachert; Matthias Duschl; Thomas Brenner
  6. Monocentric city redux By Rappaport, Jordan
  7. Here be startups: exploring a young digital cluster in inner East London By Max Nathan; Emma Vandore
  8. My Precious! the location and diffusion of scientific research: evidence from the synchrotron diamond light source By Christian Helmers; Henry G. Overman
  9. The EU Cohesion policy in context: regional growth and the influence of agricultural and rural development policies By Riccardo Crescenzi; Mara Giua
  10. Regional growth and national development: transition in Central and Eastern Europe and the regional Kuznets curve in the East and the West By Vassilis Monastiriotis
  11. Do upcoming “Smart cities” need to provide smart distribution of higher urban economic growth? Evidence from Urban India By Tripathi, Sabyasachi
  12. Natural Disasters, Industrial Clusters and Manufacturing Plant Survival By Matthew A. COLE; Robert J R ELLIOTT; OKUBO Toshihiro; Eric STROBL
  13. Convergencia social en Colombia: el rol de la geografía económica y de la descentralización By Juan Mauricio Ramírez; Juan Guillermo Bedoya; Yadira Díaz
  14. Convergencia regional en Colombia: a través de diferentes metodologías utilizando el PIB per cápita departamental (1975 – 2012) By Miguelangel Ramírez Suarez; Jair Ayala Aguilera

  1. By: Götz Zeddies
    Abstract: German Fiscal Federalism is characterized by a high degree of fiscal equalization which lowers the efficiency of local tax administration. Currently, a reform of the fiscal equalization scheme is on the political agenda. One option is to grant federal states the right to raise surtaxes on statutory tax rates set by the central government in order to reduce the equalization rate. In such an environment, especially those federal states with lower economic performance would have to raise comparatively high surtaxes. With capital mobility, this could further lower economic performance and thus tax revenues. Although statutory tax rates are so far identical across German federal states, corporate tax burden differs for several reasons. This paper tries to identify the impact of such differences on firm location. As can be shown, effective corporate taxation did seemingly not have a significant impact on firm location across German federal states.
    Keywords: fiscal equalization, corporate taxation, surtaxes, firm location
    JEL: H25 H32 H71 H77
    Date: 2015–01
  2. By: Alex Fenton
    Abstract: This paper considers techniques for measuring the prevalence of income poverty within small areas, or “neighbourhoods”, in Britain. The ultimate purpose is applying such statistics to investigating how the micro-spatial distribution of poverty within cities and regions changes over time as a consequence of political decisions and economic events. In the paper, some general criteria for small-area poverty measures are first set out, and two broad methods, poverty proxies and modelled income estimates, are identified. Empirical analyses of the validity and coverage of poverty proxies derived from UK administrative data, such as social security benefit claims, are presented. The concluding section assesses a new poverty proxy that will be used within a wider programme of analysis of the spatial-distributional effects of tax and welfare changes and of economic trends in Britain from 2000 to 2014. Particular attention is paid to the relationship between the proxy values and other local poverty measures in different kinds of places. These suggest that the proxy is an adequate, albeit imperfect, tool for investigating changes in intra-urban distributions of poverty.
    Keywords: small-area poverty estimates; small-area poverty estimation; poverty proxies; poor neighbourhoods; deprivation indices
    JEL: I32 I38 R23
    Date: 2013–05
  3. By: Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose
    Abstract: This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these ‘proximities’ on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes.
    Keywords: innovation; patents; proximities; cities; regions; knowledge spillovers; collaboration; ethnicity
    JEL: O31 O33 R11 R23
    Date: 2014–01
  4. By: Neil Lee
    Abstract: Growing cultural diversity is seen as important for innovation. Research has focused on two potential mechanisms: a firm effect, with diversity at the firm level improving knowledge sourcing or ideas generation, and a city effect, where diverse cities helping firms innovate. This paper uses a dataset of over 2,000 UK SMEs to test between these two. Controlling for firm characteristics, city characteristics and firm and city diversity, there is strong evidence for the firm effect. Firms with a greater share of migrant owners or partners are more likely to introduce new products and processes. This effect has diminishing returns, suggesting that it is a ‘diversity’ effect rather than simply the benefits of migrant run firms. However, there is no relationship between the share of foreign workers in a local labour market and firm level innovation, nor do migrant-run firms in diverse cities appear particularly innovative. But urban context does matter and firms in London with more migrant owners and partners are more innovative than others.
    Keywords: cultural diversity; innovation; cities; SMEs; migration
    JEL: J61 L21 M13 O11 O31 R23
    Date: 2013–10
  5. By: Tom Broekel (1 Institute of Economic and Cultural Geography, Leibniz University of Hanover, Germany,; Matthias Brachert (Department Structural Economics, Halle Institute for Economic Research, Germany;; Matthias Duschl (Department of Geography, Philipps University of Marburg, Germany,; Thomas Brenner (Department of Geography, Philipps University of Marburg, Germany, Philipps University of Marburg, Germany,
    Abstract: Subsidies for R and D are an important tool of public R and D policy, which motivates extensive scientific analyses and evaluations. The paper adds to this literature by arguing that the effects of R and D subsidies go beyond the extension of organizations’ monetary resources invested into R and D. It is argued that collaboration induced by subsidized joint R and D projects yield significant effects that are missed in traditional analyses. An empirical study on the level of German labor market regions substantiates this claim showing that collaborative R and D subsidies impact regions’ innovation growth when providing access to related variety and embedding regions into central positions in cross-regional knowledge networks.
    Keywords: collaborative R and D projects, related variety, regional innovation
    JEL: L14 O31 R12
    Date: 2015–01–26
  6. By: Rappaport, Jordan (Federal Reserve Bank of Kansas City)
    Abstract: This paper argues that centralized employment remains an empirically relevant stylization of midsize U.S. metros. It extends the monocentric model to explicitly include leisure as a source of utility but constrains workers to supply fixed labor hours. Doing so sharpens the marginal disutility from longer commutes. The numerical implementation calibrates traffic congestion to tightly match observed commute times in Portland, Oregon. The implied geographic distribution of CBD workers' residence tightly matches that of Portland. The implied population density, land price, and house price gradients approximately match empirical estimates. Variations to the baseline calibration build intuition on underlying mechanics.
    Keywords: Urban Land Use; Commuting; Leisure; Value of Time
    JEL: R12 R14 R41
    Date: 2014–11–01
  7. By: Max Nathan; Emma Vandore
    Abstract: The digital industries cluster known as 'Silicon Roundabout' has been quietly growing in East London since the 1990s. Now rebranded 'Tech City', it is now the focus of huge public and government attention. National and local policymakers wish to accelerate the local area's development: such cluster policies are back in vogue as part of a re-awakened interest in industrial policy in many developed countries. Surprisingly little is known about Tech City's firms or the wider ecosystem, however, and existing cluster policies have a high failure rate. This paper performs a detailed mixed-methods analysis, combining rich enterprise-level data with semi-structured interviews. We track firm and employment growth from 1997-2010 and identify a number of distinctive features: branching from creative to digital content industries, street-level sorting of firms, the importance of local amenities and a lack of conventional cluster actors such as universities or anchor businesses. We also argue that the existing policy mix embodies a number of tensions, and suggest areas for improvement.
    Keywords: digital economy; cities; clusters; innovation; London; silicon roundabout; tech city
    JEL: L2 L52 M13 O18 O31 R11
    Date: 2013–11
  8. By: Christian Helmers; Henry G. Overman
    Abstract: We analyze the impact of the establishment of a GBP 380 million basic scientific research facility in the UK on the geographical distribution of related research. We investigate whether the siting of the Diamond Light Source, a 3rd generation synchrotron light source, in Oxfordshire induced a clustering of related research in its geographic proximity. To account for the potentially endogenous location choice of the synchrotron, we exploit the availability of a `runner-up' site near Manchester. We use both academic publications and patent data to trace the geographical distribution of related knowledge and innovation. Our results suggest that the siting of the synchrotron in Oxfordshire created a highly localized cluster of related scientific research.
    Keywords: synchrotron; location; innovation; patents defaults; unobserved components model
    JEL: O31 O38 R12 R58
    Date: 2013–03
  9. By: Riccardo Crescenzi; Mara Giua
    Abstract: This paper looks at the Cohesion Policy of the European Union (EU) and investigates how the EU agricultural and rural development policies shape its influence on regional growth. The analysis of the drivers of regional growth shows that the EU Regional Policy has a positive and significant influence on economic growth in all regions. However, its impact is stronger in the most socio-economically advanced areas and is maximised when its expenditure is complemented by Rural Development and Common Agricultural Policy (CAP) funds. The top-down funding of the CAP seems to be able to concentrate some benefits in the most deprived areas. Conversely only the most dynamics rural areas are capable of leveraging on the bottom-up measures of the EU Rural Development Policy. This suggests that EU policy makers in all fields should constantly look for the best mix of bottom-up and top-down measures in order to tackle structural disadvantage.
    Keywords: regional policy, European Union, regional growth, rural development, Common Agricultural Policy
    JEL: O18 R11 R58
    Date: 2014–12
  10. By: Vassilis Monastiriotis
    Abstract: Regional disparities in Central and Eastern Europe rose substantially since 1990. Still, prima facie evidence of beta-convergence is often found in the CEE data. To reconcile this seeming paradox, we sketch out and test empirically a hybrid model of regional growth that draws on the regional Kuznets curve and incorporates aspects of cumulative causation and neoclassical convergence. In both CEE and the ‘old’ EU15, regional convergence is strongly linked to the level of national development, non-linearly. But while in the EU15 convergence speeds-up at intermediate/high levels of development, in CEE we find divergence at intermediate levels of national development and no significant return to convergence thereafter. Although this may show that overall development levels are not sufficient yet to mobilise regional convergence, it is also possible that non-convergence is attributable to centripetal forces instigated by the process of transition.
    Keywords: Regional growth; convergence; regional Kuznets curve; Central and Eastern Europe
    JEL: O11 O18 R11 R15
    Date: 2014
  11. By: Tripathi, Sabyasachi
    Abstract: The present paper tries to understand the causes behind the emergence of India‘s large agglomeration (or giant cities) and how these large agglomerations are linked with economic growth. In addition, the distribution of urban economic growth is measured by the estimation of poverty, inequality and pro-poorness. The paper suggests that the upcoming ―Smart cities‖ in India will emerge as a greater platform for future development of urban India, only if these cities surely ensure smart distribution of the fruits of urban economic growth to the poorer section of urban dwellers.
    Keywords: Agglomeration, Economic growth, Poverty, Inequality, Urban India
    JEL: D63 O18 R11
    Date: 2015–01–10
  12. By: Matthew A. COLE; Robert J R ELLIOTT; OKUBO Toshihiro; Eric STROBL
    Abstract: In this paper, we examine the role of industrial clusters and infrastructure in mitigating or magnifying the impact of the 1995 Kobe earthquake on the survival of manufacturing plants and their post-earthquake economic performance. Our methodological approach is to use information on building-level and infrastructure damages and other plant and building-characteristics including district-level variables to control for spatial dependencies to estimate a cox-proportional hazard model. Our results show that plants that were members of existing clusters were less likely to survive although we found some evidence that damaged plants in stronger clusters had a better survival probability. Further analysis shows that the strength of the cluster had no impact on a number of performance indicators including productivity, employment and output. Road damage in the nearby locality has a negative impact on plant survival.
    Date: 2015–01
  13. By: Juan Mauricio Ramírez; Juan Guillermo Bedoya; Yadira Díaz
    Abstract: En este estudio se evalúa la convergencia social en Colombia a nivel municipal medida a través del Índice de Pobreza Multidimensional, explorando el efecto de la geografía como condicionante de los resultados sociales a nivel municipal, y el papel que la descentralización puede haber jugado para contrabalancear dichos efectos.
    Keywords: Municipios, Descentralización, Convergencia Social, Geografía Económica
    JEL: H11 H21 H7 R58
    Date: 2014–10–30
  14. By: Miguelangel Ramírez Suarez; Jair Ayala Aguilera
    Abstract: Este documento trata de analizar la relación del PIB per cápita departamental con la existencia de convergencia regional en Colombia tomando 24 de las 33 regiones colombianas y a Bogotá como región centro, en comparación con las demás, también se aborda la persistencia en las desigualdades regionales basados en la noción de convergencia y la evolución de la brecha entre regiones, con datos tomados del DANE y CEGA entre 1975 – 2012. Examinando datos panel y la evidencia de series de tiempo de convergencia regional, se utilizan cuatro metodologías diferentes de análisis econométrico, se observa evidencia empírica a favor de la existencia de convergencia regional en Colombia mediante técnicas de análisis estático, dinámico y en los resultados del panel; mientras que al utilizar la estacionariedad de sigma se rechaza la posibilidad de convergencia ya que la brecha de la serie no es estacionaria.
    JEL: R11 R12 R23
    Date: 2014–12–05

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