nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒02‒28
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Research clusters: How public subsidies matter?. By Marie-Laure Cabon-Dhersin ; Emmanuelle Taugourdeau
  2. Strategic Location Choice under Dynamic Oligopolistic Competition and Spillovers By Luca Colombo ; Herbert Dawid
  3. Politics and investment: Examining the territorial allocation of public investment in Greece By Andrés Rodríguez-Pose ; Yannis Psycharis ; Vassilis Tselios
  4. A Linkage between Firm Agglomeration and Poverty Reduction First evidence in Vietnam By Long Thanh Giang ; Cuong Viet Nguyen ; Tuyen Quang Tran
  5. Mapping the occupational segregation of white women in the U.S.: Differences across metropolitan areas By Olga Alonso-Villar ; Coral del Rio
  6. Income Taxes, Sorting, and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland By Christoph Basten ; Maximilian von Ehrlich ; Andrea Lassmann
  7. Simulating micro behaviours and structural properties of knowledge networks: toward a “one size fits one” cluster policy By Joan Crespo ; Frédéric Amblard ; Jérôme Vicente
  8. Inference on higher-order spatial autoregressive models with increasingly many parameters By Abhimanyu Gupta ; Peter M. Robinson
  9. Dynamic agglomeration patterns in a 2-country NEG model with 4 regions By Pasquale Commendatore ; Ingrid Kubin ; Pascal Mossay ; Iryna Sushko
  10. Dynamics in ICT cooperation networks in selected German ICT clusters By Christian Schröder
  11. The Challenge of Combinatorial Knowledge Dynamics to Study of Institutions, Towards an Actor-centric Bottom-up View of Institutions By Sotarauta, Markku
  12. The Quality of Distance: Quality sorting, Alchian-Allen effect, and geography By TAKECHI Kazutaka
  13. Agglomeration vs. dispersion of economic activities in the districts of Paris By Arauzo Carod, Josep Maria
  14. Agglomeration effects of informal sector: evidence from Cambodia By Tanaka, Kiyoyasu ; Hashiguchi, Yoshihiro
  15. How do related variety and differentiated knowledge bases influence the resilience of local production systems? By Sedita , Silvia Rita ; de Noni , Ivan ; Pilotti , Luciano

  1. By: Marie-Laure Cabon-Dhersin (CREAM - Université de Rouen ); Emmanuelle Taugourdeau (Centre d'Economie de la Sorbonne - Paris School of Economics )
    Abstract: This paper investigates the factors underlying the emergence of Research Cluster (RC), i.e. cooperation (or coordination of research efforts) through spatial proximity between public and private research teams. A ‘public lab’ and a ‘private lab’ interact in a two-stage game to decide on ‘location’ and ‘research effort’. A high level of public subsidies associated to a low asymmetry in the ‘valorisation capability’ between both labs is necessary for the formation of a cluster. We find that RC performs better than non-cooperation in terms of research efforts in a ‘public lab’ (but not in a ‘private lab’) and output gains that can be appropriated by each lab.
    Keywords: Research cooperation, spatial location, public subsidy.
    JEL: C7 H2 H4 L3 L5 O3
    Date: 2015–02
  2. By: Luca Colombo (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore ); Herbert Dawid (Universität Bielefeld )
    Abstract: This paper investigates firms' optimal location choices explicitly accounting for the role of inwards and outwards knowledge spillovers in a dynamic Cournot oligopoly with firms that are heterogeneous in their ability to carry out cost-reducing R\&D. Firms can either locate in an industrial cluster or in isolation. Technological spillovers are exchanged between the firms in the cluster. It is shown that a technological leader has an incentive to locate in isolation only if her advantage exceeds a certain threshold, which is increasing in firms' discount rate, in industry dispersion, and in the intensity of knowledge spillovers. Scenarios are identified where although it is optimal for the technological leader to locate in isolation, from a welfare perspective it would be desirable that she locates in the cluster.
    Keywords: Location Choice, Knowledge Spillovers, Technological Leadership, Markov-perfect Equilibrium
    JEL: L13 C73 O31 R12
    Date: 2013–11
  3. By: Andrés Rodríguez-Pose ; Yannis Psycharis ; Vassilis Tselios
    Abstract: This paper discusses how electoral politics shapes the regional allocation of public investment expenditures per capita in Greece. Using regional public investment data for 10 political periods (1975-2009), combined with electoral data by constituency, a model is proposed which captures the influence of politics on the regional distribution of public investment expenditures. The results of the analysis point to a strong relationship between electoral results and regional public investment spending. Greek governing parties have tended to reward those constituencies returning them to office. Moreover, an increase in both the absolute and relative electoral returns of the governing party in a region has traditionally been followed by greater public investment per capita in that region. Regions where the governing party (whether Liberal or Socialist) has held a monopoly of seats have been the greatest beneficiaries of this type of pork-barrel politics.
    Keywords: public investment, elections, pork-barrel politics, political geography, Greece
    JEL: H77 H50 R12 R58 Z18
    Date: 2015–02
  4. By: Long Thanh Giang ; Cuong Viet Nguyen ; Tuyen Quang Tran
    Abstract: In this paper, we examine the linkage between the firm agglomeration and welfare of local households in Vietnam. We measured the firm agglomeration by per capita firm outputs at the district level, and household welfare by per capita income, expenditure and poverty. We find that the firm agglomeration helps households move from the informal sector to the formal sector. As a result, there is a positive effect of the firm agglomeration on per capita income, per capita expenditure, and poverty reduction, albeit at a small and time-decreasing magnitude. The effect of the firm agglomeration on per capita expenditure tends to be higher for households with male, younger and more educated heads than households with female, older and less educated heads. Households who live in rural areas and do not have crop land are more likely to benefit from the firm agglomeration than those living in urban areas and having cropland.
    Keywords: agglomeration, firm performance, poverty, household survey, panel data, Vietnam.
    JEL: L11 I31 I30
    Date: 2015–02–10
  5. By: Olga Alonso-Villar (Universidade de Vigo, Spain ); Coral del Rio (Universidade de Vigo, Spain and EQUALITAS )
    Abstract: This paper seeks to investigate the occupational segregation of white women in the U.S. at the local labor market level, exploring whether the segregation of this group is a homogeneous phenomenon across the country or there are important disparities in the opportunities that these women meet with across American urban areas. An important contribution of this paper is that, apart from quantifying the extent of segregation it also assesses the consequences of that segregation taking into account the ''quality'' of occupations that the group tends to fill or not to fill. The analysis shows that between 20% and 40% of white women working in a metropolitan area would have to shift occupations to achieve zero segregation in that area. Differences regarding the nature of that segregation are even stronger. In some metropolitan areas, the uneven distribution of white women across occupations brings them a per capita monetary gain of about 21% of the average wage of the area while in other metropolitan areas this group has a per capita loss of nearly 11%.
    Keywords: Occupational segregation, well-being, metropolitan areas, race, gender, U.S.
    JEL: R23 J15 J16 J71 D63
    Date: 2015–01
  6. By: Christoph Basten (KOF Swiss Economic Institute, ETH Zurich, Switzerland ); Maximilian von Ehrlich (University of Berne, Switzerland ); Andrea Lassmann (KOF Swiss Economic Institute, ETH Zurich, Switzerland )
    Abstract: This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the effects of tax differentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for unobservable location characteristics such as environmental amenities or the access to public goods and thereby reduces the estimated response of housing prices by one half compared to conventional estimates: we identify an income tax elasticity of rents of about 0.26. We complement this approach with census data on local sociodemographic characteristics and show that about one third of this effect can be traced back to a sorting of high-income households into low-tax municipalities. These findings are robust to a matching approach (MBDD) which compares identical residences on opposite sides of the boundary and a number of further sensitivity checks.
    Keywords: Local taxation, income taxation, housing prices, income sorting, boundary discontinuity design, spatial differencing
    JEL: H71 H24 R21 R38 C14
    Date: 2014–07
  7. By: Joan Crespo ; Frédéric Amblard ; Jérôme Vicente
    Abstract: The economic return of cluster policies has been recently called into question. Essentially based on a “one size fits all” approach consisting in boosting R&D collaborations and reinforcing network density in regions, cluster policies are suspected to have failed in reaching their objectives. The paper proposes to go back to the micro foundations of clusters in order to disentangle the links between the long run performance of clusters and their structural properties. We use a simple agent-based model to shed light on how individual motives to shape knowledge relationships can give rise to emerging structures with different properties, which imply different innovation and renewal capabilities. The simulation results are discussed in a micro-macro perspective, and the findings suggest reorienting cluster policy guidelines towards more targeted public-funded incentives for R&D collaboration.
    Keywords: cluster policy, networks, micro-behaviours, structural properties, agent-based model
    JEL: B52 O32 R12 Z13
    Date: 2015–02
  8. By: Abhimanyu Gupta ; Peter M. Robinson
    Abstract: This paper develops consistency and asymptotic normality of parameter estimates for a higher-order spatial autoregressive model whose order, and number of regressors, are allowed to approach infinity slowly with sample size. Both least squares and instrumental variables estimates are examined, and the permissible rate of growth of the dimension of the parameter space relative to sample size is studied. Besides allowing the number of parameters to increase with the data, this has the advantage of accommodating some asymptotic regimes that are suggested by certain spatial settings, several of which are discussed. A small empirical example is also included, and a Monte Carlo study analyses various implications of the theory in finite samples
    Keywords: spatial autoregression; increasingly many parameters; central limit theorem; rate of convergence; spatial panel data
    JEL: C21 C31 C33
    Date: 2015–05
  9. By: Pasquale Commendatore (University of Naples ‘Federico II’, Italy ); Ingrid Kubin (Vienna University of Economics and Business ); Pascal Mossay (Newcastle University ); Iryna Sushko (National Academy of Science of Ukraine )
    Abstract: We introduce a 2-country New Economic Geography model with 4 regions. It is defined by a 2D piecewise smooth map that depends on 8 parameters. Using reductions of this map to 1D maps defined on invariant straight lines we obtain stability conditions of the Core-Periphery fixed points, and show how such reductions can be used to describe basins of attraction of coexisting attractors. Typical bifurcation sequences obtained when varying some parameters are discussed. We find patterns that are much richer than those observed in standard NEG models: there are more types of fixed points including fixed points attracting in Milnor’s sense; their basins of attraction are quite complicated; and coexistence is pervasive.
    Date: 2015–02
  10. By: Christian Schröder (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW) )
    Abstract: High innovation capability is indispensable for generating economic growth in developed economies. Cooperations in the innovation process are entered into by companies for reasons of risk diversification or costs and often considered to be an efficient strategy to increase a company’s knowledge basis. Regional economic literature very often believes that regional agglomeration of companies, i.e. cluster formation, will also lead to increased local networking, i.e. also to cooperations between companies or between company and research institutes in the innovation process. A social network analysis of the two German ICT regions performed with patent data was able to show that cluster formation coincides with a dynamic increase of cooperations measured by joint patent applications. However, the cooperations are characterized by integration of extra-regional companies and research institutes rather than being intraregional.
    Keywords: Regional science, Cluster, ICT, Knowledge spillover, Social network analysis, Innovation networks
    JEL: L10 O18 L63 L86
    Date: 2013–08
  11. By: Sotarauta, Markku (University of Tampere, School of Management )
    Abstract: This paper argues that obstruction of agency, intention and interest is a weakness in institutional studies in geography. There is a need to systematically anchor a role for agency in institutionally oriented combinatorial knowledge dynamics studies, and thus to reach beyond snapshots of top-down institutions, and to produce a more nuanced view on institutions bottom up. Without in-depth studies on how actors perceive institutions, reflect upon them and either comply with them or aim to push for institutional change, it may impossible to fully understand the true impact of them. The aim here is to construct a link between agency and institutions in the context of combinatorial knowledge dynamics. To elaborate the conceptual link between institutions and combinatorial knowledge dynamics, this paper discusses three intertwined theoretical lenses. First, a conceptual distinction between cumulative and combinatorial knowledge dynamics is introduced; second, the basic tenets of institutions in regional economic development are discussed; and, third, a conceptual framework to study institutions in the context of combinatorial knowledge dynamics is constructed. The main scientific motivation here is to open a bottom-up view on institutions by linking them to the combinatorial knowledge dynamics approach by using agency as an intermediating framework.
    Keywords: Institution; agency; knowledge base; combinatorial knowledge; institutional entrepreneurship
    JEL: B52 O30 O38 O43 R11 R50
    Date: 2015–02–08
  12. By: TAKECHI Kazutaka
    Abstract: Either quality sorting or the presence of a specific cost (the so-called Alchian-Allen effect) is considered to be the main mechanism for the positive relationship between product quality and the distance to market. However, the reduced-form regressions found in the literature generally fail to reveal which of these two mechanisms (or even whether both are) is the main driving force. In this study, we employ unique Japanese individual goods price data to identify separately the effects of quality sorting and specific costs. Our empirical analysis shows that while high-cost producers produce high-quality goods, as suggested in Baldwin and Harrigan (2011), the quality-sorting mechanism solely is not sufficiently strong to account for the purported positive link between quality and distance. Moreover, we do find that the technology parameter that relates costs to quality is overestimated in the absence of specific costs. On this basis, we confirm that the presence of specific costs is significant, which may generate the positive relationship between quality and distance. We also find that the specific-cost components in transport costs are more distance elastic than any ad valorem components, a finding qualitatively consistent with the trade cost specification in Hummels and Skiba (2004). Finally, our results are robust with respect to various measures of distance and specification.
  13. By: Arauzo Carod, Josep Maria
    Abstract: The spatial distribution of economic activity has often been analysed for wide geographical areas such as regions or metropolitan areas, but it has rarely been subject to microanalysis, especially outside the U.S. In this paper we focus on what happens within a large European city (Par is), and analyse how the industrial composition of its districts differs and how these districts evolve. We also analyse suburbanization process for both residents and the workforce and provide empirical evidence about the changing roles of the core and intramuros periphery. Keywords: agglomeration, suburbanization, Paris, micropolitan analysis
    Keywords: París (França) -- Condicions econòmiques, Localització industrial, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2015
  14. By: Tanaka, Kiyoyasu ; Hashiguchi, Yoshihiro
    Abstract: The presence of a large informal sector in developing economies poses the question of whether informal activity produces agglomeration externalities. This paper uses data on all the nonfarm establishments and enterprises in Cambodia to estimate the impact of informal agglomeration on the regional economic performance of formal and informal firms. We develop a Bayesian approach for a spatial autoregressive model with an endogenous explanatory variable to address endogeneity and spatial dependence. We find a significantly positive effect of informal agglomeration, where informal firms gain more strongly than formal firms. Calculating the spatial marginal effects of increased agglomeration, we demonstrate that more accessible regions are more likely than less accessible regions to benefit strongly from informal agglomeration.
    Keywords: Cambodia, Informal sector, Economic conditions, Agglomeration, Bayesian
    JEL: C11 C21 H26 O17 R12 C26
    Date: 2015–02
  15. By: Sedita , Silvia Rita (University of Padova, Department of Economics and Management ); de Noni , Ivan (University of Milan, Department of Economics, Management and Quantitative Methods ); Pilotti , Luciano (University of Milan, Department of Economics, Management and Quantitative Methods )
    Abstract: This contribution attempts to systematize some first evidence on the sustainability and resilience of local production systems in the economic recession and first hypothetical phases of recovery, 2007 to 2013, focusing on the role played by diversified economy, related and unrelated variety and differentiated knowledge bases, as drivers for territorial resilience. The results confirm the importance of related variety to growth and stability during recessions and support the creative capacity of culture, providing evidence that a moderate concentration in cultural/creative economic activities contributes to resilience and that industrial districts and international development play a positive role.
    Keywords: Regional economic growth; industrial districts; sustainability; creative capacity of culture; resilience
    JEL: O18 R11 R12
    Date: 2015–02–08

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