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on Economic Geography |
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Issue of 2015‒04‒02
thirteen papers chosen by Andreas Koch Institut für Angewandte Wirtschaftsforschung |
| By: | Roberto Antonietti (University of Padova); Raffaello Bronzini (Bank of Italy); Giulio Cainelli (Unicversity of Padova) |
| Abstract: | This paper investigates empirically whether inward greenfield foreign direct investment (FDI) is related to greater sectorial innovation in the host Italian provinces. We combine several sources of data to estimate panel count models, regressing the annual number of patents in each province and industry against a series of lagged FDI variables. Our results show that a positive relationship between FDI and local patenting emerges only for services. In particular, we find that greater inward FDI in services positively influences local patenting activity in knowledge-intensive business services. These results are robust to endogeneity and the inclusion of province controls and fixed effects. |
| Keywords: | inward greenfield FDI, innovation, patents, research and development, panel count models |
| JEL: | F14 F23 O31 C23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1006_15&r=geo |
| By: | Marti, Josep; Alguacil, Maite; Orts, Vicente |
| Abstract: | In this paper we investigate how the different characteristics of European multinational firms affect their decision to locate in different foreign markets. Considering the existence of n geographically separated markets with different attributes, in terms of entry or fixed costs, variable production costs and the market potential, our theoretical model shows that both firm and country characteristics determine the location of multinational firms. The model reveals that given the characteristics of the countries, the decision to enter a specific country in order to serve all markets globally will depend on all the sources of a firm’s heterogeneity. In the empirical analysis, we drawn on a dataset comprised of harmonized and detailed firm-level data across European countries for 2008 (EFIGE dataset). The results obtained confirm that firms’ international location decision reflects the underlying dissimilarities of European multinational firms, including the specific industry in which they operate. More specifically, our estimations show that among European firms investing in non-European countries, only the most productive firms invest in Latin America and those that decide to enter North America are more productive than firms that locate in China and India. However, we find that this ranking may vary across industries, depending not only on TFP, but also on the years of establishment and the firms’ human capital and R&D intensity. |
| Keywords: | multinational firms, firm heterogeneity, location choices, European FDI |
| JEL: | D24 F14 F21 F23 |
| Date: | 2015–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63178&r=geo |
| By: | Aiello, Francesco; Ricotta, Fernanda |
| Abstract: | This paper analyses the TFP heterogeneity of a sample of manufacturing firms operating in seven EU countries (Austria, France, Germany, Hungary, Italy, Spain and UK). TFP data refer to 2008. The empirical setting is based on the multilevel modelling which provides two main results. Firstly, we show that TFP heterogeneity is largely due to firm-specific features (85% of TFP variability in the empty-model). Interestingly, we find that some key-drivers of TFP (size, family-management, group membership, innovations and human capital) influence heterogeneity in productivity with the expect sign, but do not, on the whole, absorb much of firm-TFP variance, implying that differences in productivity are due to sizable yet unobservable firm characteristics. Secondly, as far the role of localization is concerned, we demonstrate that country-effect is more influential than region-effect in explaining individual productivity. Net of the country-effect, the localisation in different European regions explains about 5% of TFP firm heterogeneity. When considering the case of three individual countries (France, Italy and Spain), location in different regions explains 5.3% of TFP heterogeneity in Italy, while this proportion is lower (3.6%) in France and higher (9.9%) in Spain. |
| Keywords: | TFP heterogeneity, firm-behavior, localization, European countries, multilevel model |
| JEL: | C30 D22 D24 L60 R11 R15 |
| Date: | 2014–05–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63234&r=geo |
| By: | Bassanini, Andrea (OECD); Brunello, Giorgio (University of Padova); Caroli, Eve (Université Paris-Dauphine) |
| Abstract: | We investigate the role of local social pressure in shaping the geographical pattern of firms' firing decisions. Using French linked employer-employee data, we show that social pressure exerted by the local communities where firms' headquarters are located induces CEOs to refrain from dismissing at short distance from their headquarters. More specifically, we find that, within firms, secondary establishments located further away from headquarters have higher dismissal rates than those located closer, taking into account the possible endogeneity of plant location. We also find that the positive effect of distance on dismissals increases with the visibility of the firm in the local community of its headquarters. These effects are stronger the greater the degree of selfishness of the community in which the headquarters are located. This suggests that local social pressure at headquarters is a key determinant of the positive relationship between distance to headquarters and dismissals. We show that our results cannot be entirely accounted for by alternative explanations of the distance-dismissal relationship that are put forward in the literature – e.g. monitoring costs or asymmetric information. |
| Keywords: | social pressure, layoffs, adjustment costs, selfishness, firm visibility, distance to headquarters |
| JEL: | J23 J63 M51 R12 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8910&r=geo |
| By: | Crescenzi R.; Pietrobelli C.; Rabellotti R. (UNU-MERIT) |
| Abstract: | This paper contributes to the current debate in both Economic Geography and International Business on the nature and strategies of Multinational Enterprises MNEs from emerging countries EMNEs. The paper fills a very relevant gap in the existing literature by shedding new light on the location strategies of EMNEs at the national and regional level, looking at their investment drivers and systematically comparing them with those of multinationals from advanced countries AMNEs. The empirical analysis looks at the location choices of MNEs in the European Union EU-25 regions and unveils that EMNEs follow distinctive location strategies. Their attraction into large regional markets is similar to AMNEs as well as their irresponsiveness to efficiency seeking motives. Conversely, the most knowledge-intensive investments of EMNEs respond mainly to two attraction factors strategic assets in the form of local technological dynamism and the agglomeration of foreign investments in the same business functions. In addition, both the national and the regional levels are simultaneously relevant to EMNEs decisions. |
| Keywords: | International Investment; Long-term Capital Movements; Multinational Firms; International Business; Technological Change: Choices and Consequences; Diffusion Processes; Size and Spatial Distributions of Regional Economic Activity; Regional Development Planning and Policy; |
| JEL: | F21 F23 O33 R12 R58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:unm:unumer:2015009&r=geo |
| By: | Combes, Pierre-Philippe (GREQAM, University of Aix-Marseille); Démurger, Sylvie (CNRS, GATE); Li, Shi (Beijing Normal University) |
| Abstract: | We analyse the impact of internal migration in China on natives' labour market outcomes. We find evidence of a large positive correlation of the city share of migrants with natives' wages. Using different sets of control variables and instruments suggests that the effect is causal. The large total migrant impact (+10% when one moves from the first to the third quartile of the migrant variable distribution) arises from gains due to complementarity with natives in the production function (+6.4%), and from gains due to agglomeration economies (+3.3%). Finally, we find some evidence of a stronger effect for skilled natives than for unskilled, as expected from theory. Overall, our findings support large nominal wage gains that can be expected from further migration and urbanisation in China. |
| Keywords: | migration, urban development, agglomeration economies, wage disparities, China |
| JEL: | O18 J61 R23 J31 O53 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8923&r=geo |
| By: | Randall Jackson (Regional Research Institute, West Virginia University); Mulugeta Kahsai (College of Engineering and Technology, Virginia State University); Peter Schaeffer (Regional Research Institute, West Virginia University); Mark Middleton (Regional Research Institute, West Virginia University); Junbo Yu (School of Administration, Jilin University) |
| Abstract: | The study provides a framework to develop economic resilience index for West Virginia counties based on the premise that county economic resilience depends on its physical and human resources, structure and diversity of its economic base (employment and income diversity), entrepreneurial activity and business dynamics and scale and proximity (spatial issues). Using 17 indicators along four of the six pro-posed dimensions, a preliminary economic resilience index has been created for West Virginia counties between for the years 2000 and 2005. Geospatial maps are also developed to explore the evolution of the geographical patterns of economic resilience across time. The effectiveness of the index is further affirmed in correlation analyses where the contribution of economic resilience to unemployment reduction and employment growth is highly signi?cant. These preliminary results are encouraging and appear to be pointing in a useful direction. The discussion in this study can serve as a starting point for building a broad-based, standardized, and consistent de?nition and measure of economic resilience. |
| Keywords: | regional economic development, economic structure, resilience |
| JEL: | R11 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:rri:wpaper:2015wp03&r=geo |
| By: | Martin Heintel (University of Vienna; Department of Geography and Regional Research); Norbert Weixlbaumer (University of Vienna; Department of Geography and Regional Research) |
| Abstract: | Transboundary Protected Areas (TBPA) represent a potential strategy for sustainable cross border development. Experts consider them to be versatile tools for cross border cooperation in the areas of environmental protection and peacebuilding.Against the backdrop of public planning of these protected areas, the chapter will analyze the case of a TPBA nature park, Ãrottkő-Geschriebenstein, located alongside the Austro-Hungarian border. On the conceptual level, the analysis will focus on large scale protected areas and regional development, and on the organizational institutional level, on regional governance. Ãrottkő-Geschriebenstein nature park will serve as a model for discussing the framework conditions necessary for protected areas to play a role in cross border cooperation at the interface of different political systems. Which mechanisms need to be considered for TBPA to act as stimuli or even models of regional development based on regional governance?Despite common ideas and statements in support of the cross border nature park on the part of both Austria and Hungary, numerous barriers to cooperation seem to persist. From an analytical standpoint, trust, legal frameworks and jurisdictions, weak transfer links and bureaucracy, in addition to different manifestations of responsibilities as a civil society constitute those fields of action that are partly superimposed on the matters of content and need to be addressed on a deeper level in cross border cooperation. In conclusion, it can be said that in the case of cross border cooperation, regional governance tends to be sluggish in organization, not least due to the overarching EU targets that are only partly adaptable to voluntary self governance in a TBPA scenario. |
| Keywords: | Transboundary Protected Areas, Regional Development, Regional Governance, cross border cooperation, EU Structural Funds policy |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:0301403&r=geo |
| By: | TODO Yasuyuki; Petr MATOUS; INOUE Hiroyasu |
| Abstract: | This paper examines the effect of the structure of supply chain networks on productivity and innovation capability through knowledge diffusion, using large firm-level panel data for Japan. We find that ties with distant suppliers improve productivity, as measured by sales per worker, possibly attributed to intermediates from distant firms embodying more diversified knowledge than from neighboring firms. Ties with neighboring clients also improve productivity, which may be a result of diffusion of disembodied knowledge from neighboring clients being more effective than from distant clients. By contrast, ties with distant suppliers and clients improve innovative capability, as measured by the number of patent applications, suggesting the importance of a diversity of knowledge from distant firms for innovation. In addition, the density of a firm's ego network, which is measured by how densely its supply chain partners transact with each other, is found to have a negative effect on productivity and innovative capability, implying knowledge redundancy in dense networks. Overall, our results emphasize the importance of diversified partners in knowledge diffusion through supply chain networks. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15034&r=geo |
| By: | Falck, Oliver (Ifo Institute for Economic Research); Lameli, Alfred (University of Marburg); Ruhose, Jens (Ifo Institute for Economic Research) |
| Abstract: | Ever since Sjaastad (1962), researchers have struggled to quantify the psychic costs of migration. We monetize psychic cost as the wage premium for moving to a culturally different location. We combine administrative social security panel data with a proxy for cultural difference based on historical dialect dissimilarity between German counties. Conditional on geographic distance and pre-migration wage profiles, we find that migrants demand a (indexed with respect to local rents) wage premium of about 1 (1.5) percent for overcoming one standard deviation in cultural dissimilarity. The effect is driven by males and those who earn above average occupational wages before migration, more pronounced for geographically short moves, and persistent over time. |
| Keywords: | migration costs, culture, internal migration, psychic cost |
| JEL: | D51 J61 R23 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8922&r=geo |
| By: | Zaman, Gheorghe; Georgescu, George |
| Abstract: | The paper focuses on the issue of regional resilience against the recent financial and economic crisis in the case of Romania, taking the county as territorial unit of observation. Based on the idea that the shock of a crisis impact spreads asymmetrically in the territory, with different contagion effects, the study advance a new approach of the speed and duration of GDP decline recovering. Data analysis showed that, at macroeconomic level, Romania has not proved resilient to the crisis impact, after two years of recession and a recovery period of 4 years succeeding barely in 2014 to return to the GDP level achieved in 2008. The research highlighted the differentiated recovery duration of the economic decline in territory, in 2014 many counties having to recover in the coming years remained GDP gaps, up to 10 pp or even more. The study paid a specific attention to the crisis impact on employment, focusing on R&D sector as revealing the endogenous growth generating potential at county level. |
| Keywords: | global crisis; regional economic resilience; economic decline recovery; employment; knowledge-based re-industrialization |
| JEL: | G01 I28 O18 O33 R12 R58 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:63246&r=geo |
| By: | Guilherme Mendes Resende; Bruno de Oliveira Cruz; Aristides Monteiro Neto; César Nunes de Castro; Ana Maria Bonomi Barufi; Margarida Hatem Pinto Coelho; Carlos Wagner de Albuquerque Oliveira |
| Abstract: | Este trabalho aborda alguns fatos do desenvolvimento regional brasileiro na atualidade. Discute-se o padrão do desenvolvimento regional no Brasil nos anos 2000, analisando-se alguns fatos sobre a distribuição espacial dos investimentos, do crescimento econômico setorial, dos recursos de algumas políticas públicas, a evolução dos indicadores socioeconômicos, a convergência do produto interno bruto (PIB) per capita em múltiplas escalas regionais, migração de estudantes, turismo regional, entre outros. São analisados doze fatos recentes do desenvolvimento regional no Brasil. Por fim, são feitas considerações sobre os desafios e as oportunidades para as políticas públicas de planejamento e desenvolvimento regional, além de uma síntese dos fatos que marcaram o desenvolvimento regional recente no Brasil. |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ipe:ipetds:2054&r=geo |
| By: | Emilie Arnoult; Florent Sari |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tep:tepprr:rr15-02&r=geo |