nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒08‒13
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Production Networks, Geography and Firm Performance By Yukiko Saito; Andreas Moxnes; Andrew Bernard
  2. Creative Industries: a Preliminary Insight to their Location Determinants By Coll Martínez, Eva; Arauzo Carod, Josep Maria
  3. How do firms acquire knowledge in different sectoral and regional contexts? By Tödtling, Franz; Trippl, Michaela
  4. Geography and Demography: New Economic Geography with Endogenous Fertility By Hiroshi Goto; Keiya Minamimura
  5. When Geography Matters for Growth: Market Inefficiencies and Public Policy Implications By Benjamin Montmartin
  6. Trade and the Spatial Distribution of Transport Infrastructure By Alexander Tarasov; Gabriel Felbermayr
  7. Clusters and Collective Learning Networks: The Case of the Competitiveness Cluster 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region By Christian Longhi
  8. Do Tax Incentives Affect Business Location? Evidence from Motion Picture Production Incentives By Patrick Button
  9. Econometric modelling of the regional knowledge production function in Europe By Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
  10. Southwest as the new internal migration destination in Turkey By Akarca, Ali T.; Tansel, Aysit
  11. R&D Policies in France: New Evidence from a NUTS3 Spatial Analysis By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  12. Mod\'{e}lisation spatiale de la formation des agglom\'{e}rations dans la zone alg\'{e}roise By Smicha Ait Amokthar; Nadjia El Saadi; Yacine Belarbi
  13. An NEG approach to verifying the Straw Effect: Evidence from the Akashi-Kaikyo Bridge in Japan (Japanese) By IHARA Ryusuke; NAKAMURA Ryohei; MORITA Manabu

  1. By: Yukiko Saito (RIEITI); Andreas Moxnes (Dartmouth College); Andrew Bernard (Dartmouth College)
    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. Firms located in close proximity to other markets, and firms that face low search costs, will 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.
    Date: 2015
  2. By: Coll Martínez, Eva; Arauzo Carod, Josep Maria
    Abstract: This paper is about location decisions of Creative Industries and the role played by existent spatial distribution and agglomeration economies of these kinds of activities in order to analyse their location determinants. Our main statistical source is the REIC (Catalan Manufacturing Establishments Register), which has plant-level microdata on location of new plants. Using Count Data Models, our main results show that location determinants are quite similar between both industries and also both non-creative and creative firms are positively influenced by the specialisation level in Creative Industries of municipalities. Moreover, our results provide evidence that the unobserved ‘creative milieu’ has a limited impact on attracting firms. Keywords: creative industries, creative milieu, count data models, industrial location, agglomeration economies
    Keywords: Indústria del lleure, Indústries culturals, Localització industrial, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2015
  3. By: Tödtling, Franz (Vienna University of Economics and Business); Trippl, Michaela (CIRCLE, Lund University)
    Abstract: This chapter provides a review and discussion of recent conceptual and empirical contributions on the nature and geography of firms’ knowledge acquisition activities. We offer a systematic conceptual view on the pattern on knowledge sourcing, bringing into focus and combining the notions of industrial knowledge bases (sectoral contexts), which are supposed to vary considerably with respect to the transferability of their key knowledge types and regional innovation systems (regional contexts), which are supposed to differ substantially in terms of the availability of knowledge sources. The empirical part of the chapter draws on cases from Austria, Finland, Germany and Sweden and provides an analysis and comparison of knowledge sourcing activities in analytical, synthetic and symbolic industrial sectors in metropolitan, specialised industrial and peripheral regional contexts.
    Keywords: knowledge sourcing activities; industrial knowledge bases; regional innovation systems
    JEL: D83 O30 R10
    Date: 2015–07–27
  4. By: Hiroshi Goto (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Keiya Minamimura (Graduate School of Economics, Kobe University)
    Abstract: To explain the links between population distribution and economic integration, we construct a spatial economics model with endogenous fertility. A higher population concentration increases real wages and child-raising costs, thus lowering the fertility rate. However, people migrate to more populated regions to obtain higher real wages. We show that mobility across regions results in more people flowing into highly populated regions, but lowers fertility rates there. The population growth path resembles a logistic curve in the early phase, but population decreases in the last phase. Additionally, economic integration leads to population concentration and decreases population size in the whole economy.
    Keywords: Population change, Agglomeration, Migration, Trade, Economic integration
    JEL: F15 R12 R23
  5. By: Benjamin Montmartin (GREDEG CNRS; University of Nice-Sophia Antipolis, France)
    Abstract: We propose a unique market and social planner solution for a generalized New Economic Geography and Growth model to highlight the importance of taking account of the existence of agglomeration externalities in an analysis of market inefficiencies, which allows us to provide some important implications for public policy. This framework among other things, allows us to disentangle an insufficient growth condition from an under-investment in R&D condition which in turn allows us to explain various market steady state situations. For instance, it provides an explanation for situations where the market economy grows too slowly and over-invest in R&D (as opposed to an a-spatial model). By evaluating the effects of two strategic policies, namely innovation policy and industrial policy, on market inefficiencies, we show that (1) the efficiency of a policy evolves strongly with the market economy situation and no policy is the most efficient in all situations, (2) the geography of economic activities and the question of over or underagglomeration of the market economy plays a central role on the relative efficiency of policies and (3) industrial and innovation policies are only partially complementary but policy-mixes can be justified if some market gaps are more important than others.
    Keywords: agglomeration, growth, spatial income inequality, innovation and industrial policies
    JEL: F43 H50 R12
    Date: 2015
  6. By: Alexander Tarasov (University of Munich); Gabriel Felbermayr (University of Munich and Ifo Institute)
    Abstract: This paper constructs a theoretical model, in which transportation costs between two locations depend on cumulative infrastructure investment and governments allocate infrastructure spending over continuous space, thereby affecting the geographical pattern of transportation costs. Modelling international trade, we assume that governments set their infrastructure investment schedules in a non-cooperative fashion. We find that governments provide too little infrastructure investment because they ignore the benefits from reductions in domestic transportation costs that accrue to foreign consumers. Moreover, the distribution of infrastructure chosen by local governments is skewed towards central regions, which magnifies small discrete border frictions and creates `border regions' within countries. French data on transportation costs are consistent with our theory.
    Date: 2015
  7. By: Christian Longhi (Université Nice Sophia Antipolis; GREDEG-CNRS)
    Abstract: Since the development of the knowledge based economies, clusters and clusters policies have been the subject of increased interest, as sources of knowledge, innovation, and competitiveness. The paper focuses on a case study drawn from the French cluster policy, the pole of competitiveness 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region, based on two high tech clusters, Rousset - Gémenos and Sophia-Antipolis. The policy aims to provide the firms incentives to build network relations of heterogeneous actors to trigger innovative processes. The analysis of the collaborative R&D projects of the pole provides insights on the nature of the collective learning networks working in the clusters as well as the prevailing organizational forms resulting from the firms strategies. It show that knowledge spillovers are not simply "in the air" but very specific of the learning networks and clusters from which they belong. Clusters thus need to be analyzed jointly with networks in order to understand the processes underlying their innovation capacity.
    Keywords: Collective Learning Networks, Knowledge, Innovation, Clusters, Cluster Policy, Social Network Analysis
    JEL: L14 L38 O31 R11
    Date: 2015–08
  8. By: Patrick Button (Department of Economics, Tulane University)
    Abstract: Incentives for motion picture production are a recent and popular economic development incentive among U.S. states. I estimate the impacts of state-level motion picture production incentives on filming location, establishments, and employment in the motion picture production industry. Filming locations are highly substitutable while locations for establishments in motion picture production are not substitutable due to agglomeration economies. This provides two very different cases to see how tax incentives affect business location. I quantify impacts on filming location, establishments, and employment using two difference-in-differences methodologies: panel regression analysis and synthetic control case studies of New Mexico and Louisiana, who adopted aggressive incentives early. For incentive data, I created a database of all state incentives from 1980 to 2012 through legal research. For filming location, I use the Internet Movie Database (, which provides 189,598 location choices, and for employment and establishment counts I use the Quarterly Census of Employment and Wages (QCEW). I find that most incentives have a moderate effect on filming location but almost no effects on employment or establishments. These results show that incentives affect location decisions when locations are more substitutable, as in filming, but not otherwise. These results also imply that motion picture production incentives cannot create a local film industry.
    Keywords: tax credits, tax incentive, subsidies, state taxation, firm location, motion picture production, film industry
    JEL: H25 H71 R38 L82 Z11
    Date: 2015–07
  9. By: Sylvie Charlot; Riccardo Crescenzi; Antonio Musolesi
    Abstract: By adopting a semiparametric approach, the ‘traditional’ regional knowledge production function is developed in three complementary directions. First, the model is augmented with region-specific time trends to account for endogeneity due to selection on unobservables. Second, the nonparametric part of the model relaxes the standard assumptions of linearity and additivity regarding the effect of R&D and human capital. Finally, the assumption of homogeneity in the effects of R&D and human capital is also relaxed by explicitly accounting for the differences between developed and lagging regions. The analysis of the genesis of innovation in the regions of the European Union unveils nonlinearities, threshold effects, complex interactions and shadow
    Keywords: innovation; Europe; R&D; regional knowledge production function; semiparametric models; endogenous selection; random growth model
    JEL: C14 C23 O32 R11
    Date: 2014–10–09
  10. By: Akarca, Ali T.; Tansel, Aysit
    Abstract: Antalya and Muğla provinces located in southwestern Turkey have emerged as new magnets for internal migration in the country. Socio-economic, demographic and labor market characteristics of immigrants coming to these two provinces from various regions are studied to uncover the reasons fueling their moves. This is accomplished through an analysis of descriptive statistics, and an analysis of a gravity model estimated. Differences and similarities between immigrants coming to these two provinces and those going to other migrant magnets, between immigrants and natives in Antalya and Muğla, and among immigrants coming to the two provinces from various origins are noted. What distinguishes Antalya and Muğla from other migrant-drawing provinces is that they attract some retirees and university students as well and their immigrants participating in the labor force are attracted mainly by jobs created in the sectors related to tourism, either directly or indirectly, rather than industry. Immigrants from different origins exhibit different characteristics and tend to specialize in different types of jobs. However, as other migrant flows, those directed at Antalya and Muğla are affected by distance adversely and by unemployment differential, past migration and population size at origin, favorably.
    Keywords: : Internal migration, labor market, gravity model, Turkey, Antalya, Muğla.
    JEL: J21 J61 R23
    Date: 2012
  11. By: Benjamin Montmartin (GREDEG CNRS; University of Nice-Sophia Antipolis, France); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GATE Lyon Saint-Etienne; Jean Monnet University, Saint-Etienne, France)
    Abstract: The French policy-mix for R&D and innovation has deeply evolved in recent years and is nowadays, one of the most generous and market-friendly system in the world. This paper investigates the (evolutive) effects of this policy-mix by using a unique database containing information on the amount of R&D tax credit, regional, national and European subsidies received by firms in all French metropolitan NUTS3 regions over the period 2001-2011. By estimating a Spatial Durbin model with regimes and fixed effects, we provide new evidence on the efficiency of the French policy-mix. First, a yardstick competition between NUTS3 regions for R&D investment driven by negative spatial spillovers is found. Second, it seems that national subsidies are the only instrument able to generate a significant leverage effect on privately-financed R&D. Third, due to the context of spatial competition, the three other policies studied (Tax Credit, Regional and European subsidies) do not generate significant leverage or crowding-out effect. Fourth, we highlight the presence of structural breaks in our data that correspond to the last two important reforms of the French tax credit. Consequently, the effect of R&D policies and especially R&D tax credit are likely to change over time and influence ex-post evaluation results.
    Keywords: Additionality, French policy-mix, Private R&D investment, Spatial panel
    JEL: H25 O31 O38
    Date: 2015–07
  12. By: Smicha Ait Amokthar; Nadjia El Saadi; Yacine Belarbi
    Abstract: The goal of this study is to analyze the dynamics underlying Algiers urban area formation with reference to The New Economic Geography (NEG) theories and more precisely to the paper of Paul Krugman (1991), "Increasing returns and economic geography" which explains the mechanisms of economic activities concentration through two types of forces: centripetal forces enhancing the economic activities concentration and centrifugal forces hindering the agglomeration process. In fact, these mechanisms are translated into a system of nonlinear equations which is very hard to solve analytically. As a consequence, the use of numerical methods is highly advocated. We present some numerical simulations using real Algerian data.
    Date: 2015–07
  13. By: IHARA Ryusuke; NAKAMURA Ryohei; MORITA Manabu
    Abstract: This paper investigates the straw effect in the framework of new economic geography (NEG). The straw effect specifically in Japan refers to the provisioning of transportation infrastructure such as shinkansen lines, bridges, highways, etc. that worsens the economic foundation of the local areas. The reason is explained by NEG: the decrease in transport costs stimulates interregional competition, which results in the agglomeration of economic activities. Using an NEG model of the 47 prefectures, we analyze the effect of transportation infrastructure on regional economic foundations. First, the estimation of shipment values in the manner of regional potentials derives elasticity of substitution by industry. Then, by focusing on the market/competition expansion effects of transportation infrastructure, we show the conditions in which the straw effect occurs. Finally, we show that our methodology makes it possible to predict whether the construction of new transportation infrastructure will have positive or negative effects on the prefectures.
    Date: 2015–07

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