nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒04‒25
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Agglomeration Economies in China: Locations and Effects By Chao Li; John Gibson
  2. Functional and Sectoral Division of Labour within Central and Eastern European Countries: Evidence from Greenfield FDI By Teodora Dogaru; Martijn Burger; Bas Karreman; Frank van Oort
  3. Institutions and Diversification: Related versus Unrelated Diversification in a Varieties of Capitalism framework By Boschma, Ron; Capone , Gianluca
  4. Production Networks, Geography and Firm Performance By Bernard, Andrew B.; Moxnes, Andreas; Saito, Yukiko U.
  5. Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level By Mesbah J. Motamed; Raymond J.G.M. Florax; William A. Masters
  6. The Geographical Network of Bank Organizations: Issues and Evidence for Italy By Luca Papi; Emma Sarno; Alberto Zazzaro

  1. By: Chao Li (University of Waikato); John Gibson (University of Waikato)
    Abstract: The nature and location of urbanization economies and their effects on productivity per worker in China are examined. Unlike previous studies, more accurate resident-based measures of urban scale from the 2010 census are used. The size of urbanization economies is similar to those in other countries and they occur only in bigger cities and not in smaller towns, and operate only through tertiary sector activity. Efforts by government to disperse urbanization, through land use and migration restrictions and by stimulating construction and manufacturing in China’s counties, are unlikely to create beneficial agglomeration effects.
    Keywords: agglomeration; cities; population; productivity; urbanization; China
    JEL: R12 O15
    Date: 2014–04–01
  2. By: Teodora Dogaru (A Coruna University, Spain); Martijn Burger (Erasmus University Rotterdam); Bas Karreman (Erasmus University Rotterdam, ERIM); Frank van Oort (Utrecht University, the Netherlands)
    Abstract: In this paper, we analyse the sectoral and functional division of labour in Central and Eastern European (CEE) regions within the convergence debate. By analysing the investment decisions of multinational corporations in 49 NUTS-2 regions across 6 European CEE countries (Poland, Czech Republic, Slovakia, Hungary, Romania, and Bulgaria), we show that capital city regions not only receive more greenfield FDI but also attract a larger variety of investments in terms of sectors and functions. Capital cities are more likely to host higher-end sectors and functions, which provides an explanation for the existing regional disparities within CEE countries. These results highlight the importance of functional and sectoral divisions of labour in the view of regional profiling and contribute to the recent EU Cohesion Policy debate. Forthcoming in <A href="">Tijdschrift voor economische en sociale geografie</A>.
    Keywords: regional disparities, Central and Eastern Europe, greenfield FDI
    JEL: F23 R12 R58
    Date: 2014–03–28
  3. By: Boschma, Ron (CIRCLE, Lund University and URU, Utrecht University); Capone , Gianluca (IUSS, Pavia)
    Abstract: The Varieties of Capitalism literature has drawn little attention to industrial renewal and diversification, while the related diversification literature has neglected the institutional dimension of industrial change. Bringing together both literatures, the paper proposes that institutions have an impact on the direction of the diversification process, in particular on whether countries gain a comparative advantage in new sectors that are close or far from what is already part of their existing industrial structure. We investigate the diversification process in 23 developed countries by means of detailed product trade data in the period 1995-2010. Our results show that relatedness is a stronger driver of diversification into new products in coordinated market economies, while liberal market economies show a higher probability to move in more unrelated industries: their overarching institutional framework gives countries more freedom to make a jump in their industrial evolution. In particular, we found that the role of relatedness as driver of diversification into new sectors is stronger in the presence of institutions that focus more on ‘non-market’ coordination in the domains of labor relations, corporate governance relations, product market relations, and inter-firm relations.
    Keywords: varieties of capitalism; institutions; relatedness; diversification; evolutionary economic geography
    JEL: B52 L16 O43 P16 P51
    Date: 2015–04–12
  4. By: Bernard, Andrew B.; Moxnes, Andreas; Saito, Yukiko U.
    Abstract: This paper examines the importance of buyer-supplier relationships, geography and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down the firm's marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, consistent with the model.
    Keywords: firm-to-firm neworks; infrastructure; productivity; trade
    JEL: D22 D85 F14 L10 L14 R12
    Date: 2015–04
  5. By: Mesbah J. Motamed (United States Department of Agriculture, United States); Raymond J.G.M. Florax (Purdue University, United States; and VU University Amsterdam, the Netherlands); William A. Masters (Tufts University, United States)
    Abstract: This paper addresses the timing of a location's historical transition from rural to urban activity. We test whether urbanization occurs sooner in places with higher agricultural potential and comparatively lower transport costs, using worldwide data that divide the earth's surface at half-degree intervals into 62,290 cells. From an independent estimate of each cell's rural and urban population history over the last 2,000 years, we identify the date at which each cell achieves various thresholds of urbanization. Controlling for unobserved heterogeneity across countries through fixed effects and using a variety of spatial econometric techniques, we find a robust association between earlier urbanization and agro-climatic suitability for cultivation, having seasonal frosts, better access to the ocean or navigable rivers, and lower elevation. These geographic correlations become smaller in magnitude as urbanization proceeds, and there is some variance in effect sizes across continents. Aggregating cells into countries, we show that an earlier urbanization date is associated with higher per capita income today. "Agriculture, Transportation and the Timing of Urbanization: Global Analysis at the Grid Cell Level" has been published in the "Journal of Economic Growth" (DOI 10.1007/s10887-014-9104-x).
    Keywords: Economic growth, economic geography, urbanization, agriculture, transportation
    JEL: C21 N50 O11 O18 R1
    Date: 2014–01–02
  6. By: Luca Papi (Università Politecnica delle Marche and Money and Finance Research Group (MoFiR)); Emma Sarno (Università di Napoli “L’Orientale”); Alberto Zazzaro (Università Politecnica delle Marche, MoFiR and CSEF)
    Abstract: The evolution of the banking industry has always been affected by recurrent waves of technological, regulatory and organizational changes. All such changes have significant effects on the spatial organization of banks, the interconnectedness of geographical credit markets and the core-periphery structure of banking industry. In this chapter, we review the literature on the effects of geographical distances between the key actors of the credit market (the borrowing firm, the lending branch, the lending bank, and rival banks) on lending relationships and interbank competition. Using the metrics and graph techniques for network analysis we then provide evidence concerning the evolving geographical network of bank organizations in Italy. JEL Classification: G2
    Keywords: Distances in credit markets; spatial organization of banks; network analysis.
    Date: 2015–04–20

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