nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒05‒16
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The location of new firms - Influence of commuting behaviour By Backman, Mikaela; Karlsson, Charlie
  2. A spatial analysis of health and pharmaceutical firm survival By Giuseppe Arbia; Giuseppe Espa; Diego Giuliani; Rocco Micciolo
  3. Islands as ‘Bad Geography’. Insularity, Connectedness, Trade Costs and Trade By A.M. Pinna; L. DeBenedictis
  4. Productivity and employment dynamics: new evidence from Italian regions By B. Biagi; MG. Ladu
  6. Why Do Cities Matter? Local Growth and Aggregate Growth By Chang-Tai Hsieh; Enrico Moretti
  7. What drives China’s outward FDI? A regional analysis By You , Kefei
  8. The Importance of Mittelstand Firms for Regional Apprenticeship Activity - Lessons for Policy - By Jahn, Vera
  9. Spurring Growth in Lagging Regions in Slovak Republic By Lilas Demmou; Martin Haluš; Gabriel Machlica; Fusako Menkyna
  11. Human capital agglomeration and social returns to education in Colombia By Luis Eduardo Arango; Gabriela Bonilla
  12. Econometría espacial usando Stata. Breve guía aplicada para datos de corte transversal By Marcos Herrera Gómez

  1. By: Backman, Mikaela (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School, & Centre of Excellence for Science and Innovation Studies (CESIS)); Karlsson, Charlie (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, Blekinge Institute of Technology, & University of Southern Denmark)
    Abstract: In this paper, we analyse where people who become self-employed actually start their firms. In the entrepreneurship literature, it is generally assumed that individuals who start a firm start it where they live. We question this general assumption and show that this does not hold for commuters. Our results show that of those individuals that were short-distance commuters in 2007 and become self-employed in 2008, 90.1 percent started their firm in their work munici-pality. Only 9.4 percent started their firm in their residence municipality. For long-distance commuters, the figures were 93.6 and 6.4 percent, respectively. Our econometric estimations show that the probability to start a firm in the work municipality increases with the number of years as a commuter, with commuting to a larger municipality, and with the relative size of the work municipality compared to the municipality of residence. Our results indicate that the entrepreneurship literature must reconsider its general statement that individuals start firms where they live.
    Keywords: Entrepreneurship; self-employment; location; commuting; networks; micro-level data
    JEL: C21 J24 L26 R12
    Date: 2015–05–07
  2. By: Giuseppe Arbia; Giuseppe Espa; Diego Giuliani; Rocco Micciolo
    Abstract: The presence of knowledge spillovers and shared human capital is at the heart of the Marhall-Arrow- Romer externalities hypothesis. Most of the earlier empirical contributions on knowledge externalities, however, considered data aggregated at a regional level so that conclusions are based on the arbitrary definition of jurisdictional spatial units: this is the essence of the so-called Modifiable Areal Unit Problem. A second limitation of these studies is constituted by the fact that, somewhat surprisingly, while concentrating on the effects of agglomeration on firm creation and growth, the literature has, conversely, largely ignored its effects on firm survival. The present paper aims at contributing to the existing literature by answering to some of the open methodological questions reconciling the literature of Cox proportional hazard with that on point pattern and thus capturing the true nature of spatial information. We also present some empirical results based on Italian firm demography data collected and managed by the Italian National Institute of Statistics (ISTAT).
    Keywords: Agglomeration, Firm survival, Spatial econometrics
    Date: 2015
  3. By: A.M. Pinna; L. DeBenedictis
    Abstract: In this paper we explore the geographical dimension of insularity, measuring its effect on a comprehensive measure of trade costs (Novy 2012). Controlling for other geographical characteristics, connectedness (spatial proximity) and the role of historical events in shaping modern attitudes towards openness (measured through a quantification of routes descriptions in logbooks between 1750 and 1850), we give evidence that to be an island is not bad per se in terms of trade costs. Bad geography can be reversed by connectedness and open institutions.
    Keywords: trade, Islands, gravity model, Geography, Connectedness
    JEL: F14 F10
    Date: 2015
  4. By: B. Biagi; MG. Ladu
    Abstract: When productivity growth accelerates job destruction and job creation occurs simultaneously. However the results for the whole economy depend on which effect eventually dominates. We investigate what occurs in Italy during the time span 1977-2003, when some waves of labor market reforms have been introduced towards more flexibility. We also investigate if there are any systematic regional differences in the employment/productivity dynamics and whether these dynamics experience any sort of spatial externalities. Findings suggest that overall in Italy job destruction effect prevails and that the labor market reforms have a negative impact on employment.
    JEL: J01 J20 O30 R11 R23
    Date: 2015
  5. By: Romão, João (Lusíada University)
    Abstract: Despite the close relationship between tourism and territory, the application of spatial analysis methods in tourism is not abundant in the literature. Nevertheless, the recent developments in the analysis of space-time models, the existence of geo-referenced information and the availability of suitable software tools has created new opportunities for studying the role of space in tourism activities. A space-time panel data model is developed in this work in order to analyse the relations between tourism demand and the existence of infrastructures, cultural assets and natural resources in European regions, including the analysis of spatial effects. The results reveal the positive impacts of the explanatory variables on tourism demand and the clear existence of spatial correlations, suggesting that regional tourism demand benefits from the dynamics registered in neighborhood regions. Policy implications - including the need for a multi-regional approach for planning and promotion of tourism - are discussed.
    Keywords: Space-time Model; Panel Data; Spatial Analysis; Tourism Demand
    JEL: C21
    Date: 2015–05–08
  6. By: Chang-Tai Hsieh; Enrico Moretti
    Abstract: We study how growth of cities determines the growth of nations. Using a spatial equilibrium model and data on 220 US metropolitan areas from 1964 to 2009, we first estimate the contribution of each U.S. city to national GDP growth. We show that the contribution of a city to aggregate growth can differ significantly from what one might naively infer from the growth of the city’s GDP. Despite some of the strongest rate of local growth, New York, San Francisco and San Jose were only responsible for a small fraction of U.S. growth in this period. By contrast, almost half of aggregate US growth was driven by growth of cities in the South. We then provide a normative analysis of potential growth. We show that the dispersion of the conditional average nominal wage across US cities doubled, indicating that worker productivity is increasingly different across cities. We calculate that this increased wage dispersion lowered aggregate U.S. GDP by 13.5%. Most of the loss was likely caused by increased constraints to housing supply in high productivity cities like New York, San Francisco and San Jose. Lowering regulatory constraints in these cities to the level of the median city would expand their work force and increase U.S. GDP by 9.5%. We conclude that the aggregate gains in output and welfare from spatial reallocation of labor are likely to be substantial in the U.S., and that a major impediment to a more efficient spatial allocation of labor are housing supply constraints. These constraints limit the number of US workers who have access to the most productive of American cities. In general equilibrium, this lowers income and welfare of all US workers.
    JEL: E24 J01 R0
    Date: 2015–05
  7. By: You , Kefei (BOFIT)
    Abstract: Our study examines home drivers of China’s regional outward FDI. We propose a theoretical framework that incorporates an extended Investment Development Path (IDP) theory, home locational constraints, policy incentives and geographic factors. Empirically, we employ the Bayesian Averaging Maximum Likelihood Estimates method to address model uncertainty. All proposed theories (except for geographic aspects) are found to provide important perspectives explaining China’s regional outward FDI. Our results highlight the importance of government policies but do not support the original IDP hypothesis that outward investment is automatically generated as income grows. Our findings have implications for both regional and central-government policy.
    Keywords: China; regional outward FDI; home determinants; extended IDP theory; home locational constraints; government policies; Bayesian
    JEL: C11 C23 F21 R11
    Date: 2015–05–05
  8. By: Jahn, Vera (Helmut Schmidt University, Hamburg)
    Abstract: Politicians frequently emphasize the importance of Mittelstand firms for the economy, thereby parti- cularly referring to their enormous engagement in training apprentices. However, there is yet almost no empirical evidence on the question whether Mittelstand firms are in fact excessively active in trai- ning apprentices. This paper contributes to the literature by studying whether the relative importance of owner-managed SMEs has an effect on firms’ apprenticeship activity. Using a cross section of West German NUTS-3-regions, we find a significantly positive relation between the relative importance of Mittelstand firms and apprenticeship activity on the regional level. However, on the national level an increase in the share of Mittelstand firms turns out to be without effect on apprenticeship activity.
    Keywords: apprenticeship; Mittelstand firms; owner-management; SMEs; Germany; regional spillovers
    JEL: C21 D23 I21
    Date: 2015–05–05
  9. By: Lilas Demmou; Martin Haluš; Gabriel Machlica; Fusako Menkyna
    Abstract: Regional inequality in Slovakia is among the highest in the OECD and is increasing. The main reason for regional disparity is the combination of low economic growth and job creation in the eastern and central part of the country and insufficient labour mobility to the west, in particular by low-skilled workers. As a result, jobs shortage and lack of technological capacities in the central and eastern regions persist alongside skills shortages in the Bratislava regions. Boosting convergence requires a multi-pronged approach involving innovation, labour market and educational policies. Completing the transport infrastructure network in Slovakia will be both important for removing expansion bottlenecks in the Bratislava region and reducing obstacles for job creation in the central and eastern regions.<P>Stimuler la croissance dans les régions les moins dynamiques en République Slovaque<BR>Les inégalités entre régions slovaques figurent parmi les plus fortes de la zone OCDE et s'accentuent. Ces disparités régionales s'expliquent principalement par la conjonction d'une croissance économique atone, de faibles créations d'emplois dans l'est et le centre du pays et d'une mobilité insuffisante de la main-d'oeuvre vers l'ouest, en particulier pour les travailleurs peu qualifiés. En conséquence, une pénurie d'emplois et un manque de capacités technologiques perdurent dans les régions du centre et de l'est, parallèlement à des pénuries de qualifications dans la région de Bratislava. Le renforcement de la convergence entre régions passe par une approche pluridimensionnelle, axée sur l'innovation, le marché du travail et les politiques d'éducation. Il importe de compléter le réseau d'infrastructures de transport en Slovaquie à la fois pour supprimer les goulets d'étranglement qui limitent l'expansion économique dans la région de Bratislava, et pour réduire les obstacles à la création d'emplois dans les régions du centre et de l'est.
    Keywords: unemployment, active labour market policies, innovation, education, Roma, transport infrastructure, EU funds, life-long learning, VET, employment services, regional inequality, infrastructures de transport, politiques actives du marché du travail, population Rome, fonds Européens, service public de l’emploi, enseignement et formation professionnelle, inégalité, formation, formation continue, chômage, éducation
    JEL: I2 I3 J21 J24 J31 J61 O3 R3 R4
    Date: 2015–05–28
  10. By: Maldonado, Mauricio (University of Chile); Noronha Vaz, Teresa (University of Algarve)
    Abstract: Studies of local knowledge spillovers have often focused on empirical evidence for core regions, and been related largely to manufacturing, neglecting behavior in less innovative economic sectors in peripheral regions. Tourism in the Algarve region is the main engine of its regional economy. Although frequently considered as a low-moderate innovative sector, competitive tourism firms are becoming increasingly Knowledge Intensive, which may create positive advantages for regional growth. This may improve conditions for the creation and diffusion of knowledge, with cooperative and collaborative interaction contributing to the consolidation of a regional innovation system (RIS). The goal of this study is to provide preliminary evidence of the main sources and vehicles of regional knowledge spillovers affecting tourism firms in the Algarve, generally considered to be a peripheral region. The main sources of knowledge used by micro and small tourism firms (MSTF) are human resources and formal and informal networks. This study detected specific features of a regional innovation platform which, eventually, may give way to a RIS.
    Keywords: Tourism; Innovation; Knowledge Spillover; Knowledge Intensive Services; Regional Innovation System; Algarve Region
    JEL: P25
    Date: 2015–05–08
  11. By: Luis Eduardo Arango; Gabriela Bonilla
    Abstract: We provide evidence of private returns to education and externalities which jointly render social returns in the labor market of Colombia. The spillover in the cities is generated by the share of college educated workers in the working-age population. Thus, the higher is this share in the cities, the higher the wages. The size of the externality is about 0.66; that is, an increase in the share of one percentage point will increase the wage in 0.66%. For highly educated workers the externality is about 0.75 while for low educated it is not significant. The results change in an important way if Bogotá, the capital city of the country, is excluded from the sample. Resources destined by the Colombian Institute for Educational Credit and Technical Studies Abroad (ICETEX) to fund undergraduate and postgraduate studies in provinces affect the outcomes if Bogotá is within the sample. A positive correlation between the size of cities and human capital agglomeration is also observed in such a way that if the former is substituted for the latter, we can still find the spillover.
    Keywords: social returns, private returns, externalities.
    JEL: J2 J3
    Date: 2015–05–07
  12. By: Marcos Herrera Gómez (CONICET-IELDE/UNSa)
    Abstract: This document aims to present the common tools within Stata to estimate and test spatial econometric models. This paper contains an exploratory analysis of spatial data and a range of simple and complex spatial regression models. The guide can be used as a manual to apply spatial econometrics in the context of Stata software. The database and codes used in the different sections are available to replicate step by step procedure.
    Date: 2015–04

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