nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒03‒13
five papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional heterogeneity and interregional research spillovers in European innovation: modeling and policy implications By Gianni Guastella; Frank van Oort
  2. Economic development according to Friedrich List By Armando J. Garcia Pires; José Pedro Pontes
  3. “Malthus living in a slum: urban concentration, infrastructures and economic growth” By David Castells-Quintana
  4. Innovation, R&D spillovers, and the variety and concentration of the local production structure By Leppälä, Samuli
  5. The Effect of Ethnic Clustering on Migrant Integration in Germany By Sandra Schaffner; Barbara Treude

  1. By: Gianni Guastella; Frank van Oort
    Abstract: In agglomeration studies, the effects of various regional externalities related to knowledge spillovers remain largely unclear. To explain innovation clustering, scholars emphasize the contribution of Localized Knowledge Spillovers (LKS) and, specifically when estimating the Knowledge Production Function (KPF), of (interregional) research spillovers. However, less attention is paid to other causes of spatial heterogeneity. In applied works, spatial association in data is econometrically related to evidence of research spillovers. This paper argues that, in a KPF setting, omitting spatial heterogeneity might lead to biased estimates of the effect of research spillovers. As an empirical test, a spatial KPF is estimated using EU25 regional data, including a spatial trend to control for unexplained spatial variation in innovation. Accounting for geographical characteristics substantially weakens evidence of interregional research spillovers.
    Keywords: Generalized Additive Models, Knowledge Spillovers, Regional Innovation, European Union
    JEL: R12 R58
    Date: 2015–03
  2. By: Armando J. Garcia Pires; José Pedro Pontes
    Abstract: In this paper, we develop a Listian model of economic development. The economy consists of a primary sector and a potential industrial sector that can arise via industrialization. Industrialization however depends on if the primary sector specializes on the primary product, which can lead to a division of labor between the primary and the industrial sector. In this case, the industrial sector will use a modern technology to produce industrial goods. If such does not occur, the primary sector continues to produce all goods with a traditional technology of production. In addition, the industrial sector has to decide if it concentrates production in one location or if it disperses production in two locations. We show that the level of transport costs matters for division of labor and for the degree of manufacturing agglomeration if and only if the refinement of the primary input is strong, i.e., if the raw material loses a lot of weight through industrial transformation. Otherwise, if the industrial process is not so much “weight-losing”, industrialization can begin with a decentralized symmetric spatial pattern independently of the transport costs level.
    Keywords: Friedrich List; Economic Development; Industrial Agglomeration; Division of Labor.
    JEL: O14 R11 R30
    Date: 2015–02
  3. By: David Castells-Quintana (Faculty of Economics, University of Barcelona)
    Abstract: The link between urban concentration and economic growth at country level is not straightforward, as there are benefits as well as costs associated with urban concentration. Indeed, recent empirical evidence suggests different effects of urban concentration on growth depending on the level of development and the world region under analysis. This paper revisits the literature on urban concentration and economic growth to shed some light on these previous results. In particular, differences in the process of urbanisation, and in the quality of the urban environment itself, have been suggested as most likely defining the balance between benefits and costs from urban concentration, and are probably behind differences in the relationship between concentration and growth. However, empirical evidence in this regard remains very limited. The aim of the paper is to fill this gap by paying special and explicit attention to differences between world regions in terms of urban infrastructure, essentially access to basic urban services. The main contribution of the paper is to therefore provide empirical evidence on the role that the urban environment plays in the relationship between urban concentration and economic growth.
    Keywords: Agglomeration, urbanisation, urban concentration, infrastructure, congestion diseconomies, growth, Sub-Sahara Africa JEL classification:O1, O4, R1.
    Date: 2015–01
  4. By: Leppälä, Samuli (Cardiff Business School)
    Abstract: This paper presents a Cournot oligopoly model with R&D spillovers both within and across industries. The aim is to provide an appropriate theoretical foundation for three different hypotheses regarding the impact of the local production structure on innovation and output, as well as addressing mixed empirical results in this area. Both the effective R&D and total industry output are shown to increase with the variety of industries, which is aligned with Jacobs externalities. With respect to the concentration, the outcome is more ambiguous, where it depends on the variety, both spillover rates, and the R&D efficiency. If the variety is limited, then partial support is given to both Marshall-Arrow-Romer externalities in the case of effective R&D, and to Porter externalities in the case of the total industry output. The use of a relative rather than an absolute measure of variety is also shown to be important.
    Keywords: concentration; innovation; knowledge spillover; regional economy; variety
    JEL: O33 R11 L13
    Date: 2015–02
  5. By: Sandra Schaffner; Barbara Treude
    Abstract: Since ethnic clustering is common in Germany, a better understanding of its effects on the integration of immigrants could be important for integration policies, especially in the light of rising immigration and a skilled worker shortage. Yet, both economic theory and empirical research for other countries cannot give a clear-cut answer to whether clustering is benefi cial or detrimental for immigrants’ integration. In this paper, the effect of residential clustering on the labour market outcome of first-generation immigrants in Germany is analysed empirically. It, thus, contributes to the literature by extending it to Germany on which hardly any research has been conducted. For the analysis, two measures for labour market integration are used: the employment probability and wage levels. In order to control for the endogeneity of the location decision, a two-step strategy is used, combining a control function and an instrumental variable (IV) approach. The results suggest a negative enclave effect on both employment and wages, that is even larger when sorting is taken into account.
    Keywords: Ethnic enclaves; residential clustering; labour market integration; migrants; wage differentials
    JEL: J61 J64 J31 R23
    Date: 2014–12

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