nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒10‒04
nineteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Doing evolution in economic geography By Andy Pike; Andrew Cumbers; Stuart Dawley; Danny MacKinnon; Robert McMaster
  2. Assessing Regional Quality of Life: A Call for Action in Regional Science By Dan S. Rickman
  3. Micro-founded measurement of regional competitiveness in Europe By Gabor Bekes; Gianmarco I.P. Ottaviano
  4. Local and transnational relations of Prato’s Chinese enterprises, and their contribution to the province’s economy By Stefano Casini Benvenuti; Sonia Soldani; Cristina Corezzi
  5. The Global Agglomeration of Multinational Firms By Laura Alfaro; Maggie Chen
  6. Measuring regional competitiveness: A survey of approaches, measurement and data By Gabor Bekes
  7. The spatial component of R&D networks By Tobias Scholl; Antonios Garas; Frank Schweitzer
  8. R&D networks and regional knowledge production in Europe. Evidence from a space-time model By Iris Wanzenböck; Philipp Piribauer
  9. Network Centrality and Market Prices: An Empirical Note By Matthias Firgo; Dieter Pennerstorfer; Christoph R. Weiss
  10. Offshoring and the Geography of Jobs in Great Britain By Gagliardi, Luisa; Iammarino, Simona; Rodriguez-Pose, Andres
  11. STEM Graduates, Human Capital Externalities, and Wages in the U.S. By John V. Winters
  12. Regional Economic Impacts of the Shale Gas and Tight Oil Boom: A Synthetic Control Analysis By Abdul Munasib; Dan S. Rickman
  13. Grid and shake - Spatial aggregation and robustness of regionally estimated elasticities By Gabor Bekes; Peter Harasztosi
  14. Spatial Patterns of Manufacturing Agglomeration in Cambodia, Lao People’s Democratic Republic, and Thailand By Toshitaka GOKAN; Ikuo KUROIWA; Nuttawut LAKSANAPANYAKUL; Yasushi UEKI
  15. The Geography of Unconventional Innovation By Ruben Gaetani; Enrico Berkes
  16. Learning Externalities in Opaque Asset Markets: Evidence from International Commercial Real Estate By Fuess, Roland; Ruf, Daniel
  18. The Effects of the Tripartite Free Trade Area: Towards a New Economic Geography in Southern, Eastern and Northern Africa? By Andrew Mold; Rodgers Mukwaya
  19. Decomposição Espacial dos Preços de Imóveis Residenciais no Município de São Paulo By Rodger B. Antunes Campos; Eduardo Simões Almeida

  1. By: Andy Pike; Andrew Cumbers; Stuart Dawley; Danny MacKinnon; Robert McMaster
    Abstract: Evolutionary approaches in economic geography face questions about the relationships between their concepts, theories, methods, politics and policy implications. Amidst the growing but unsettled consensus that evolutionary approaches should employ plural methodologies, the aims here are, first, to identify some of the difficult issues confronting those working with different frameworks. The concerns comprise: specifying and connecting research objects, subjects and levels; handling agency and context; engaging and integrating the quantitative and the qualitative; comparing cases; and, considering politics, policy and praxis. Second, the purpose is to articulate a distinctive geographical political economy approach, methods and illustrative examples in addressing these issues. Bringing different views of evolution in economic geography into dialogue and disagreement renders methodological pluralism a means towards improved understanding and explanation rather than an end in itself. Confronting such thorny matters needs to be embedded in our research practices and supported by greater openness, more and better substantiation of our conceptual, theoretical and empirical claims, enhanced critical reflection, and deeper engagement with politics, policy and praxis.
    Date: 2015–09
  2. By: Dan S. Rickman (Oklahoma State University)
    Abstract: Intellectual appeal and simplicity of use has led to the widespread application of the spatial hedonic model in assessing regional quality of life. Yet, the traditional spatial hedonic approach contains numerous assumptions, which typically are untested. Violation of the assumptions in practice can lead to significantly biased estimates of regional quality of life. More sophisticated econometric approaches have been developed to reduce the biases. However, each approach typically only addresses one or two of the concerns. More promising, is the use of structural models, which by design have the potential to overcome all the limitations of the spatial hedonic approach.
    Keywords: Hedonic estimation, Spatial equilibrium, Quality of life, Urban economics, Economic geography
    JEL: Q5 R23 R31
    Date: 2014–08
  3. By: Gabor Bekes (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Gianmarco I.P. Ottaviano (London School of Economics, University of Bologna, CEP and CEPR)
    Abstract: Enhancing competitiveness is a popular target in economic policy making – not only at the national, but at the regional level as well despite neither generally accepted definition nor any strong agreement on how to measure it. In this chapter we discuss the conceptual underpinnings of why it is interesting to unpack the economic performance of a country into the economic performance of its regions. We argue that as firms compete; measuring regional competitiveness should be also based on comparing firm performance across EU regions. Given available data, we propose a new way to gauge how firms fare is to look at their ability to access and penetrate world markets. The key index is export per worker from a region to non-EU destinations relative to the EU average – a ‘regional competitiveness’ index that captures the capacity of a region’s firms to outperform the firms of the average EU region in terms of exports.
    Keywords: export, regional competitiveness, measurement, granularity
    JEL: R11 F14 R58
    Date: 2015–06
  4. By: Stefano Casini Benvenuti (Istituto Regionale per la Programmazione Economica della Toscana); Sonia Soldani; Cristina Corezzi (Provincia di Prato)
    Abstract: The present volume continues the close examination of the socio-economic conditions and main characteristics of the Chinese community now steadily living and working in the Prato district. The attention is shifted to the system of relations, mainly but not solely economic, that links the Chinese community on one side to native inhabitants and entrepreneurs, and on the other to those of the country of origin, specifically from Wenzhou (Zhejiang Province), a city where is present a well-established, export-oriented clothing industry’s cluster. In the district literature, the local and international spheres of relations – where the first is intended as trust among economic agents and the second as openness to international markets – are considered important factors of local development. The evolution of the two territorial scales at which socio-economic integration occurs is analyzed with the aim of highlighting tendencies, possible risks and opportunities, and drawing from them some useful policy indications. One question is whether the settlement of a considerable foreign community, not always well integrated with the native population, can favour the creation of those trust relationships that have always constituted a key factor of success for the Prato district. And also, which are the expectations – and consequently the role – regarding the second-generation Chinese in promoting a higher level of integration? What about economic integration, measurable through accounting matrixes, is it much higher than the social integration averagely perceived? And how does the evolution of international relations change the local economy’s perspectives, considering that in the past they concerned only the export of finished goods, whereas today they are enhanced by import flows of semi-finished and finished goods? These are the questions that this study seeks to answer, using direct investigations and analyzing socio-economic data.
    Keywords: Prato, industrial districts, Chinese entrepreneurs
    JEL: R12 L67 R23
    Date: 2015
  5. By: Laura Alfaro; Maggie Chen
    Abstract: The explosion of multinational activities in recent decades is rapidly transforming the global landscape of industrial production. But are the emerging clusters of multinational production the rule or the exception? What drives the offshore agglomeration of multinational firms in comparison to the agglomeration of domestic firms? Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. Our analysis presents new stylized facts that suggest the emerging offshore clusters of multinationals are not a simple reflection of domestic industrial clusters. Agglomeration economies including capital-good market externality and technology diffusion play a more important role in the offshore agglomeration of multinationals than the agglomeration of domestic firms. These findings remain robust when we address potential reverse causality by exploring the regional pattern and process of agglomeration.
    Keywords: multinational firm, agglomeration, location fundamentals, agglomeration economies
    JEL: F2 D2 R1
    Date: 2014–04
  6. By: Gabor Bekes (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR)
    Abstract: This paper reviews a set of issues related to the concept and measurement of regional competitiveness. First, the concept of growth and competitiveness is argued to be different at regional level from the national level. In particular, the relationship between agglomeration and performance, the role of FDI in regions, and the key aspect of local institutions are analyzed. Second, a detailed review is carried out on potential data sources to gauge regional competitiveness using official, private sector as well as academic datasets.
    Keywords: regional competitiveness, data audit
    JEL: R11 R38
    Date: 2015–06
  7. By: Tobias Scholl; Antonios Garas; Frank Schweitzer
    Abstract: We study the role of geography in R&D networks by means of a quantitative, micro-geographic approach. Using a large database that covers international R&D collaborations from 1984 to 2009, we localize each actor precisely in space through its latitude and longitude. This allows us to analyze the R&D network at all geographic scales simultaneously. Our empirical results show that despite the high importance of the city level, transnational R&D collaborations at large distances are much more frequent than expected from similar networks. This provides evidence for the ambiguity of distance in economic cooperation which is also suggested by the existing literature. In addition we test whether the hypothesis of local buzz and global pipelines applies to the observed R&D network by calculating well-defined metrics from network theory.
    Date: 2015–09
  8. By: Iris Wanzenböck (Innovation Systems Department, Austrian Institute of Technology); Philipp Piribauer (Department of Economics, Vienna University of Economics and Business)
    Abstract: In this paper we estimate space-time impacts of the embeddedness in R&D networks on regional knowledge production by means of a dynamic spatial panel data model with non-linear effects for a set of 229 European NUTS-2 regions in the period 1999-2009. Embeddedness refers to the positioning in networks where nodes represent regions that are linked by joint R&D endeavours in European Framework Programmes. We observe positive immediate impacts on regional knowledge production arising from increased embeddedness in EU funded R&D networks, in particular for regions with lower own knowledge endowments. However, long-term impacts of R&D network embeddedness are comparatively small.
    Keywords: R&D networks, European Framework Programme, regional knowledge production, dynamic spatial panel data model, space-time impacts
    JEL: C33 O31 R12
    Date: 2015–09
  9. By: Matthias Firgo (Austrian Institute of Economic Research (WIFO)); Dieter Pennerstorfer (Department of Economics, Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO)); Christoph R. Weiss (Department of Economics, Vienna University of Economics and Business)
    Abstract: We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center - defined as the 1-median location - exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms' pricing behavior and further find that the importance of centrality increases with market size.
    Keywords: Network Centrality, Spatial Competition, Retail Markets, Gasoline Prices
    JEL: C21 D43 L11 L81 R12
    Date: 2015–09
  10. By: Gagliardi, Luisa; Iammarino, Simona; Rodriguez-Pose, Andres
    Abstract: This paper investigates the impact of the offshoring of production activities on domestic jobs in Great Britain. The paper considers both the spatial heterogeneity across local labour markets and variations in the intensity of outward flows of investments abroad (OFDI) across industries in order to shed new light on the job creation/destruction implications of offshoring. The results suggest that offshoring may generate significant job losses in routine occupations in areas that have been more exposed to the relocation of production abroad, regardless of whether the relocation has been to developed or developing/emerging countries. Offshoring to developing/emerging countries has, by contrast, a positive effect on the generation of non-routine jobs. Efficiency gains accruing from the international reorganization of production increase in the long-run, with compensation mechanisms operating through growth of employment in higher value added activities at home. Overall, our results uncover important spatial and interpersonal inequalities in job creation, which provide new challenges for public policy.
    Keywords: job creation and destruction; local labour markets; offshoring; routine and non-routine occupations
    JEL: F21 J23 J24 J42
    Date: 2015–09
  11. By: John V. Winters (Oklahoma State University)
    Abstract: Previous research suggests that the local stock of human capital creates positive externalities within local labor markets and plays an important role in regional economic development. However, there is still considerable uncertainty over what types of human capital are most important. Both national and local policymakers in the U.S. have called for efforts to increase the stock of college graduates in science, technology, engineering, and mathematics (STEM) fields, but data availability has thus far prevented researchers from directly connecting STEM education to human capital externalities. This paper uses the 2009-2011 American Community Survey to examine the external effects of college graduates in STEM and non STEM fields on the wages of other workers in the same metropolitan area. I find that both types of college graduates create positive wage externalities, but STEM graduates create much larger externalities.
    Keywords: human capital externalities, STEM, wage growth, agglomeration, urban economics, economic geography
    JEL: J24 R23
    Date: 2014–06
  12. By: Abdul Munasib (University of Georgia); Dan S. Rickman (Oklahoma State University)
    Abstract: The dramatic increase in oil and gas production from shale formations has led to intense interest in its impact on local area economies. Exploration, drilling and extraction are associated with direct increases in employment and income in the energy industry, but little is known about the impacts on other parts of local economies. Increased energy sector employment and income can have positive spillover effects through increased purchases of intermediate goods and induced local spending. Negative spillover effects can occur through rising local factor and goods prices and adverse effects on the local area quality of life. Therefore, this paper examines the net economic impacts of oil and gas production from shale formations for key shale oil and gas producing areas in Arkansas, North Dakota and Pennsylvania. The synthetic control method (Abadie and Gardeazabal 2003; Abadie et al., 2010) is used to establish a baseline projection for the local economies in the absence of increased energy development, allowing for estimation of the net regional economic effects of increased shale oil and gas production.
    Keywords: regional economic development, energy boom, regional science, economic geography
    JEL: Q32 R11
    Date: 2014–07
  13. By: Gabor Bekes (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and CEPR); Peter Harasztosi (National Bank of Hungary)
    Abstract: This paper proposes a simple method measuring spatial robustness of estimated coefficients and considers the role of administrative districts and regions' size. The procedure, dubbed "Grid and Shake", offers a solution for a practical empirical issue, when one compares a variables of interest across spatially aggregated units, such as regions. It may, for instance, be applied to investigate competition, agglomeration, spillover effects. The method offers to (i) have carry out estimations at various levels of aggregation and compare evidence, (ii) treat uneven and non-random distribution of administrative unit size, (iii) have the ability to compare results on administrative and artificial units, and (iv) be able to gouge statistical significance of differences. To illustrate the method, we use Hungarian data and compare estimates of agglomeration externalities at various levels of aggregation. We find that differences among estimated elasticities found at various levels of aggregation are broadly in the same range as those found in the literature employing various estimation method. Hence, the method of spatial aggregation seems to be of equal importance to modeling and econometric specification of the estimation.
    Keywords: economic geography, firm productivity, agglomeration premium, spatial grid randomization
    JEL: R12 R30 C15
    Date: 2015–06
  14. By: Toshitaka GOKAN (Institute of Developing Economies – Japan External Trade Organization); Ikuo KUROIWA (Institute of Developing Economies – Japan External Trade Organization, Bangkok, Thailand); Nuttawut LAKSANAPANYAKUL (Thailand Development Research Institute Foundation); Yasushi UEKI (Economic Research Institute for ASEAN and East Asia)
    Abstract: Due to lowering trade and transport costs, participation in the global value chains (GVCs) is becoming one of the most effective development strategies for many developing countries. Participation in the GVCs, however, is not sufficient; the formation of industrial linkages and clusters is critical for sustained economic growth. This paper identifies the manufacturing clusters in Cambodia, the Lao People’s Democratic Republic, and Thailand, using the method proposed by Mori and Smith (2013). The paper provides a map of industrial clusters by industry, which is tested against the hypothesis of spurious clusters. Moreover, the paper indicates the spatial structure of industrial agglomerations using the global extent and local density indices.
    Keywords: industrial agglomeration, cluster analysis, Lao People’s Democratic Republic, Cambodia, Thailand
    JEL: L60 R12 R14
    Date: 2015–09
  15. By: Ruben Gaetani (Northwestern University); Enrico Berkes (Northwestern University)
    Abstract: Using a newly assembled dataset of narrowly georeferenced patents, we document that innovation activity is not as concentrated in densely populated areas as commonly believed: suburban regions are responsible for a substantial share of the innovation produced. Nevertheless, high-density areas disproportionately generate innovation of unconventional nature. We provide causal evidence for a mechanism that can generate this pattern: unconventional ideas are more likely to emerge when people interact in a dense and technologically diverse environment. An endogenous growth model with heterogeneous innovation and spatial sorting reveals that optimal place-based policy in the U.S. would foster urbanization to promote unconventional ideas, at the cost of sacrificing growth and inducing higher congestion.
    Date: 2015
  16. By: Fuess, Roland; Ruf, Daniel
    Abstract: This paper uses a unique dataset to empirically test the implications of limited transparency in decentralized asset markets. We capture differences in the level of transparency as a linkage mechanism among international commercial real estate markets. This connectivity arises from the strategic interaction of informed and uninformed investors. Our identification strategy exploits the unique feature of spatial econometrics to analyze the transmission of learning externalities across segmented opaque markets. We find empirical evidence of cross-sectional dependence and implied co-movements among global real estate excess returns. Furthermore, we show that local shocks are amplified via spillover effects and feedback loops, which provide a potential source of instability in the international commercial property sector.
    Keywords: Commercial real estate, cross-sectional dependence, learning externalities, opaque markets, spatial econometrics, transparency risk
    JEL: C33 D82 D83 G15 R30
    Date: 2015–09
  17. By: Daniela Di Cagno (Università LUISS "Guido Carli"); Andrea Fabrizi (Ministero dello Sviluppo Economico); Velentina Meliciani (Università di Teramo); Iris Wanzenböck (Austrian Institute of Technology)
    Abstract: This paper investigates the impact of “relational” spillovers arising from participation in European research networks on knowledge creation across European regions. We use links in EU Framework Programmes (from the Fourth to the Seventh) to weight foreign R&D in order to construct a relational distance matrix across 257 European regions over the period 1995-2010. We, then, assess the impact of relational spillovers on regional patent applications controlling also for local spatial spillovers. We find that relational spillovers matter for knowledge creation although spatial contiguity remains a crucial factor. We also find that spillovers are higher when regions with different levels of R&D participate in European networks. .
    Keywords: Relational spillovers, R&D collaboration, knowledge, EU Framework Programmes, spatial correlation, patents.
    JEL: O31 R12 C23
    Date: 2015
  18. By: Andrew Mold; Rodgers Mukwaya
    Abstract: This study evaluates the economic impact of the proposed COMESA-SADC-EAC Tripartite Free Trade Area (TFTA) on 26 African countries. It uses the global trade analysis project (GTAP) computable general equilibrium (CGE) model and database to measure the static effects of the establishment of the TFTA on industrial production, trade flows and consumption in the tripartite region. The results indicate a significant increase in intra-regional exports as a result of tariff elimination, boosting intra-regional trade by 29 percent. Particularly encouraging is the fact that the sectors benefiting most are manufacturing ones, such as light and heavy manufacturing, and processed food. Concerns have been raised that industrial production in the TFTA would concentrate in the countries with highest productivity levels - namely, Egypt and South Africa. Simulation results suggest that these fears are exaggerated, with little evidence of concentration of industries in the larger countries.
    Keywords: Tripartite free trade area, EAC, COMESA, SADC
  19. By: Rodger B. Antunes Campos; Eduardo Simões Almeida
    Abstract: Muitos trabalhos estudaram fatores que determinam o preço de imóveis. Todavia, pouco esforço foi atribuído para estudar o spillover espacial entre distritos, atentando ao fato das hierarquias dos objetos de análise. Nesse contexto, utilizando o Método Hierárquico Linear Espacial, o presente artigo busca analisar o efeito vizinhança e o efeito adjacência no município de São Paulo, isto é, quais os fatores afetam o preço intra-distrito e quais os fatores atuam entre-distritos. O resultado aponta que 68,2% do preço do imóvel é explicado pelas características intrínsecas e de localização, enquanto 31,8% é explicado pelas características dos distritos e o spillover espacial entre estes. Em relação à última decomposição, 24,8% pode ser entendido como efeito vizinhança
    Keywords: Urban Economics; Hedonic Prices; Spatial Hierarchical Linear Model
    JEL: R30 C21
    Date: 2015–09–09

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