nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒11‒01
35 papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Impact of agglomeration on the regional growth of Latin American countries By Grace Carolina Guevara Rosero
  2. On the spatial scale of industrial agglomerations By Tomoya Mori; Tony Smith
  3. The knowledge economy and the economic crisis in Germany. Regional development, structural change and labor market regions By Michael Bentlage; Matthias Dorner; Alain Thierstein
  4. Estimating agglomeration economies in Spain: evidence from geographically disaggregated data By Alberto Díaz Dapena; Esteban Fernández Vázquez; Fernando Rubiera Morollón
  5. Population Growth in American Cities between 1990 and 2010: True Contagion and Urban Hierarchy By Elizabeth Dobis; Michael Delgado; Raymond Florax; Peter Mulder
  6. Regional dynamics of growth in the European Union: To what extent spatial spillovers matter? By Selin Ozyurt; Stephane Dees
  7. Regional Convergence and R&D Investment: Applied investigation in Portugal By Gertrudes Guerreiro; António Guerreiro
  8. Business location: strategic factor for the development of regions? One approach on industrial location policy of Bahia By Noelio Spinola; Carolina Spinola; Aliger Pereira
  9. Ageing by feet? Regional migration, neighbourhood choice and local demographic change in German cities By Uwe Neumann
  10. Analysing spatial concentration of Hungarian knowledge intensive manufacturing sectors on city-region level 1996-2012 By Izabella Szakálné Kanó
  11. The world city network: national versus global perspective By Stefan Lüthi; Alain Thierstein; Michael Hoyler
  12. Effect of the centrifugal and centripetal forces in core versus (semi)periphery in Central Europe countries By Martin Maris
  13. Agglomeration externalities and urbanization in Ecuador By Grace Carolina Guevara Rosero; Stephane Riou; Corinne Autant-Bernard
  14. Regional Characteristics and the Survival of New Firms By Charlie Karlsson; Johan Klaesson; Özge Öner
  15. SME?s cluster identification in Russia By Vera Barinova; Stepan Zemtsov
  16. Agglomerations in a multi-region economy: Poly-centric versus mono-centric patterns By Takashi Akamatsu; Tomoya Mori; Yuki Takayama
  17. Agglomeration effects on countries' competitiveness and entrepreneurial performance By Balázs Páger; Éva Komlósi
  18. Why do empirical tests tend to accept the NEG? ? An alternative approach to the 'wage equation' in European regions By Fernando Bruna
  19. Regional resilience to displacements: Explaining the regional capacity to re-employ displaced workers By Kristina Nyström
  20. Accessibility Indicators for Regional Economic Development: An Application to the Regional Distributive Effects of High-Speed Rail in Spain By Guineng Chen; Marcos Correia; João de Abreu e Silva
  21. The effects of knowledge and innovation on regional growth: Nonparametric evidence By Marcos Sanso-Navarro; Maria Vera-Cabello
  22. The persistent effects of placed-based policy - Evidence from the West-German Zonenrandgebiet By Tobias Seidel; Maximilian von Ehrlich
  23. The Productive City Needs both - localization and urbanization economies across spatial scales in the city By Martin Andersson; Johan P Larsson; Joakim Lundblad
  24. Industrial and geographical mobility of workers exiting the Swedish and West German shipbuilding industry 1970-2000 By Anne Otto; Rikard Eriksson; Martin Henning
  25. National Income Taxation and the Geographic Distribution of Population By Hildegunn Stokke; Jørn Rattsø
  26. Shaking up the Equilibrium: Natural Disasters, Immigration and Economic Geography By Philipp Ager; Casper Worm Hansen; Lars Lønstrup
  27. Correcting agglomeration economies: How air pollution matters By Marion Drut; Aurélie Mahieu
  28. Predicting GDP of 289 NUTS Regions in Europe with ?Subjective? Indicators for Human and Social Capital By Mikko Weckroth; Teemu Kemppainen; Jens F.L. Sørensen
  29. An empirical example of spatial process of productivity growth in NUTS 2 regions By Alicja Olejnik; Jakub Olejnik
  30. Economic crisis and innovation: Do regions matter? By Adelheid Holl; Ruth Rama
  31. Return migration to East Germany: Spatial patterns and the relevance for regional labor markets By Michaela Fuchs; Antje Weyh
  32. Endogenous Labor Supply and International Trade By Tadashi Morita; Takanori Ago; Takatoshi Tabuchi; Kazuhiro Yamamoto
  33. Firm Performance in the Periphery: On the Relation between Firm-Internal Knowledge and Local Knowledge Spillovers By Grillitsch, Markus; Nilsson, Magnus
  34. Occupational choice of migrants: does NEG tell something new? By Vera Ivanova; Hanna Vakhitova; Philip Ushchev
  35. Ranking Authors and Institutions by Publications in Regional Science Journals: 2010-2014 By Dan S. Rickman; John V. Winters

  1. By: Grace Carolina Guevara Rosero
    Abstract: Theoretical approaches have been developed to examine the effect of agglomeration on growth. However, the understanding of the mechanisms of agglomeration in developing countries remains unaddressed. This paper aims to give empirical evidence of the role of agglomeration on the growth of Latin American regions. The study of the subcontinent is crucial because of the evidence of a rapid pace of urbanization process. Using a database with information of 162 regions of 8 Latin American countries (Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Panama and Peru) during the period 2000-2009, we estimate the effect of agglomeration on regional growth in three periods. The measures of agglomeration are urbanization rate and population density. The data is based on the information provided by the National Institutes of Statistics and the Central Banks of each country. The geographical coordinates were obtained from the GeoHack system of Wikitech. The control variables are: educated labor force, public investment and sectoral specialization. After proving that our variables of agglomeration instrumented with altitude are not endogenous and given the finding of spatial correlation between Latin American regions, a spatial autoregressive panel model with fixed effects is estimated by Maximum Likelihood. For the sake of this estimation, we apply three spatial weight matrices. The first one is the k=1nearest neighbors weight matrix which is interpreted as the configuration of low integration. The second one is the weight matrix based on Gabriel method which is interpreted as the configuration of moderate integration. And the third one is a distance weight matrix where all regions are connected. It is interpreted as the configuration of quasi-complete integration. Our findings suggest that agglomeration is vital for the regional growth. However, the effect of agglomeration is not the same everywhere. In this line, we test Williamson?s (1965) hypothesis of more pronounced agglomeration effects at early stages of development than at later stages of development. Using the statistical theory proposed by Hansen (2000), the threshold value of level of development at which the effect of urbanization changes was 5700 dollars of per capita income. Low-developed regions experience larger positive effects of urbanization on their economic growth than high-developed regions. In our sample, the positive effects vanish at 10,500 dollars of per capita income. Finally, the degree of spatial autocorrelation increases with the level of integration that the spatial weight matrix reflects.
    Keywords: regional growth; spatial; urbanization; Latin America; agglomeration economies
    JEL: R11 O18 O54 R15
    Date: 2015–10
  2. By: Tomoya Mori; Tony Smith
    Abstract: Standard approaches to studying industrial agglomeration have been in terms of scalar measures of agglomeration within each industry. But such measures often fail to distinguish spatial scales of agglomeration. In a previ- ous paper, Mori and Smith (2014) proposed a pair of quantitative measures for distinguishing both the scale and degree of industrial agglomeration based on an explicit method for detecting spatial clusters. The first, designated as the global extent of industrial clusters, measures the spatial spread of these clusters in terms of the areal size of their essential containment, defined to be the (convex-solid) region containing the most significant subset of these clusters. The second, designated as the local density of industrial clusters, measures the spatial extent of individual clusters within their essential con- tainment in terms of the areal share of that containment occupied by clusters. The present paper applies this pair of measures to manufacturing industries in Japan, and the results obtained are systematically compared to those of the most prominent scalar measures currently in use. Finally, these mea- sures are shown to support certain predictions of new economic geography models concerning the relationship between shipment distances and spatial scales of agglomeration for individual industries.
    Keywords: Industrial agglomeration; spatial scale of agglomeration; shipment distance
    JEL: C49 L60 R12 R14
    Date: 2015–10
  3. By: Michael Bentlage; Matthias Dorner; Alain Thierstein
    Abstract: Regions in Germany are facing an intensifying structural change towards the knowledge economy which is affecting spatial patterns of growth. . Features of such a change know many facets: fierce competition for skilled, mobile and motivated labor force, unemployment of non-qualified labor, longer commutes, multi-local households, re-concentration of the value chain, increased knowledge intensity of innovations, triple-helix collaborative ventures, structural weakness of public budgets, etcetera. These changes result in uneven spatial development, concentration in polycentric large-scale urban regions and increase in spatial disparities. The question arises how this structural change affects the territory of Germany, where securing equivalent living conditions still counts among the basic constitutional principles. We hypothesize that knowledge intensive employment tends to concentrate in two different spatial environments: (1) urban metropolitan centers and (2) network nodes with specialized knowledge resources. Both spatial configurations qualify by their combination of agglomeration economies and network economies. And both spatial environments tend to provide an optimum of geographical proximity and relational proximity, which eventually enable systematic knowledge creation. We test our hypothesis by analyzing the employment from 1998 to 2010 in 16 branches of the knowledge economy with a shift-share analysis. We argue that structural change and the economic crisis from 2009 intensify regional disparities while inducing relative employment shifts.
    Keywords: employment growth; economic crisis; knowledge economy; labor market regions
    JEL: R11 R12 O1
    Date: 2015–10
  4. By: Alberto Díaz Dapena; Esteban Fernández Vázquez; Fernando Rubiera Morollón
    Abstract: In this paper we estimate agglomeration economies in Spain in 2009 basing on Ciccone?s (2002) model, which explains average labor productivity in one spatial unit on employment density and other controls. The novelty of our analysis is that the empirical model is estimated at a highly disaggregated spatial scale, oppositely to the convention of taking as unit of analysis NUTS-2 or NUTS-3 regions. Recent contributions to New Economic Geography (NEG) base their theoretical analysis on geographical units defined at a more disaggregated spatial scale than these administratively defined regions. Specifically, from a sample of income-taxpayers published by the Spanish Fiscal Studies Institute -Instituto de Estudios Fiscales- we derive figures on average wages by worker at the scale of Local Labor Markets (LLMs). The empirical analysis bases on several estimation strategies; namely, Ordinary Least Squares (OLS), Two-Stages Least Squares (2SLS), Quantile Regressions (QR) and Instrumental Variable Quantile Regressions (IVQR) estimators, all they finding a significantly positive effect of agglomeration in the conditional mean of labor productivity. Additionally, the QR and IVQR estimators find a progressively decreasing, but still positive, effect of employment density along the conditional distribution of labor productivity.
    Keywords: Agglomeration economies; labor productivity; density; local data and Spain
    JEL: D24 J31 R10 R12
    Date: 2015–10
  5. By: Elizabeth Dobis; Michael Delgado; Raymond Florax; Peter Mulder
    Abstract: Cities and towns are loci of population and production. In 2010, 80.7 percent of the United States population resided in urban areas, and the U.S. Bureau of Economic Analysis reported that in 2011, 90.1 percent of GDP was produced in metropolitan statistical areas (MSAs), emphasizing that urban areas and their immediate hinterlands are also centers of production. Academic interest in urban population change can be split into two literature branches. The first branch focuses on the growth and structure of individual cities. The second branch focuses on the urban system. Some of the literature in this branch implicitly assumes interconnectedness among cities, while other authors explicitly include the spatial proximity between cities or network flows among cities. However, in many studies the difference between contagious and hierarchical interrelations across cities comprised in the urban system are obfuscated. In this paper we clearly distinguish and quantify the effects of both. In other words, we focus on how the structure of the urban system influences population growth. We do this by using central place theory as a theoretical basis for addressing the research question: what natural and man-made locational characteristics influence population growth? We envisage three major contributions to the existing literature. First, we utilize a unique dataset of urban areas with decennial observations from 1990 to 2010. Most of the literature studying urban systems in the United States uses MSAs, which include rural hinterlands that are not part of the urban area, preventing a clear separation between cities and hinterlands and obscuring results. We built a new dataset at the more appropriate and precise geographic level of urban areas, which capture the agglomerated economic activity and built extent of urban locations. Second, departing from literature that includes either urban hierarchy or continuous urban proximity, our analysis includes both the hierarchical relationship among cities of differing sizes and the continuous nature of proximity to other cities. The novel use of a spatially-lagged hierarchical linear model allows us to include both these critical aspects of the urban system in our analysis. This econometric model captures the influence of the structure of the urban system on population change by allowing city-level explanatory variables to affect population growth differently, given the unique characteristics of each location's regional and central place market areas. Concurrently we account for contiguous effects through the inclusion of neighbors. Third, we include man-made amenities and characteristics of cities, which have been omitted from previous studies in an effort to avoid endogeneity in the analysis. The inclusion of these characteristics allows us to include both producer-based and consumer-based characteristics in the analysis, to capture the idea that cities are markets.
    Keywords: population growth; urban hierarchy; spatial lag; hierarchical linear models
    JEL: R11 R12 R15
    Date: 2015–10
  6. By: Selin Ozyurt; Stephane Dees
    Abstract: This paper investigates the main determinants of economic growth in the European Union from a regional perspective. The analysis is based on a recently available dataset from the European Cluster Observatory covering 253 European regions over the period 2002-2008. In addition to the traditional determinants of regional growth (such as investment, human capital developments, innovation and infrastructure endowment), the growth analysis accounts for spatial effects related to the existence of externalities from neighbouring regions. The spatial Durbin fixed-effect panel specification captures spatial feedback effects from the neighbours through spatially lagged dependent and independent variables. Social-economic environment and traditional determinants of growth are found to be significant. In particular, investment, infrastructure and human capital endowment, accessibility and innovation capacity explain both growth dynamics and cross regional differences. We do not find evidence of convergence among regions over the study period. By contrast, we detect a regional cluster in the core of Europe specialised in activities with high growth potential. Our findings confirm the significance of spatial spillovers. Specifically, business investment and skilled workforce migration have a positive ? direct and indirect ? impact on economic growth of the European regions.
    Keywords: Spatial Durbin Panel Models; Economic Growth; Cluster Analysis; European Union;
    JEL: R12
    Date: 2015–10
  7. By: Gertrudes Guerreiro; António Guerreiro
    Abstract: R&D investments are seen has having an enormous potential impact on the competitive position of regions and perhaps on regional convergence (or divergence) too. The aim of the paper is to study both the localization of R&D investments and regional income distribution among the NUTs 3 regions of Portugal to conclude if these variables are related or not. We intend to answer questions like if geography influences the pattern of R&D investments and inequality, and if these ones reveal the presence of spatial correlation. Furthermore, we evaluate convergence or divergence in income growth and if it is related with R&D investments. After a brief introduction we evaluate the inequalities among regions using information about per capita GDP and per capita R&D investment. It follows the convergence analysis and conclusions. To study the spatial convergence (approximation) of per capita income (GDPpc) and R&D investments in the regions of Portugal, we use a standard methodology of spatial econometrics. We compared the values of each geographical unit with the values calculated to the neighboring geographic units, in the first and last year of the period under review. We conclude that regions with higher GDPpc are not the same with the highest concentration of R&D investments, with the exception of the northern coastline. The R&D investments are geographically linked to the network of higher education institutions, especially in the interior regions of the country. The northern regions reveal more dynamic in terms of R&D, which apparently is not felt in the population's standard of living measured by GDPpc. Our challenge for the future of this work is to understand and to explain this data evidence.
    Keywords: R&D Investment; Income Distribution; Regional Inequality; Regional Convergence;
    JEL: C23 O30 R11 R12
    Date: 2015–10
  8. By: Noelio Spinola; Carolina Spinola; Aliger Pereira
    Abstract: In this paper we present a critical analysis of industrial location policy of the state of Bahia, in the period covered in between 1960s and 2000s, from the perspective of spatial economy. The paper reviews the formulation of the theory of location, through the contributions of its principal authors, evidencing the changes occurring in its epistemological basis with the advent of new transports and communication technologies. Through documentary research were analyzed localization strategy of industrial districts of Ilheus, Jequié, Vitória da Conquista and Juazeiro, the industrial centers of Subaé (in Feira de Santana) and Aratu and Camaçari Petrochemical Complex - largest integrated industrial complex in the southern hemisphere. The analysis concludes that the State of Bahia experience was not successful and that it was not related to the conditions formulated by the spatial economy. Despite what this theory advocates, industries attracted to Bahia did not have their effects extrapolated to other sectors of the regional economy, being in practice, enclaves. Some possible reasons for this fact are related to structural context of Brazilian economic and political system: the concentrating income model, which requires industrial companies to operate with a high coefficient of location, ie a tendency to spatial concentration; the industrial park is dedicated mainly to the production of intermediate goods, requiring to its viability the existence of economies of scale, agglomeration and urbanization, from which are only partly relieved the agribusiness and mineral processing companies; the lack of a strategy and industrial development policy was determinant in order for this space being subject to strong political will significantly marked by the authoritarism, which eliminated the integration of intersectoral actions, as well as an effective participation in the process from various segments of society, especially the business sector. From the spatial point of view, it appears that the macro locational definition of Bahia´s industrial districts was guided mainly by politics and secondarily relied much more on the analysis of urban hierarchy than the occurrence of effective economic possibilities and industrialization. Therefore, it follows the conclusion, answering the question that heads this article, as the facts indicate, that in order for the locational theories taking place in strategic regional development factors, it should be taken into account a number of other conditions, such as the local culture, the effective political system and market structure.
    Keywords: Spatial economics; Business location; Service economy; Regional development; Bah
    JEL: R11 R12
    Date: 2015–10
  9. By: Uwe Neumann
    Abstract: In the literature on the economics of demographic change so far the regional and neighbourhood-level consequences were out of the main focus. Yet, regional migration accentuates diversity in the progress of ageing. In fact, while households are known to ?vote with their feet? when they choose a residential location, neighbourhood populations may experience ?ageing by feet? as an outcome of a multitude of individual location decisions. This paper examines at what pace demographic change proceeds at the neighbourhood level in an ageing region and to what extent regional migration and neighbourhood choice during the past two decades reinforced or changed patterns of residential segregation among urban neighbourhoods. German cities differ from those in many other highly developed countries in that their population has stagnated or even begun to decline during the past decades. Apart from Eastern Germany, due to decades of net migration to more prosperous regions, the old-industrialised Ruhr in North Rhine-Westphalia is one of the German regions, which have already been affected by a severe loss in population and fundamental population change over the past decades. Drawing on municipal data at the sub-city level and microdata from a representative survey, this paper examines how change in the composition of neighbourhood populations relates to regional migration. The first step of the analysis focuses on the pace of neighbourhood-level demographic change during the period from 1998 to 2008. The second step examines household preferences relating to residential locations in the Ruhr, based on microdata from a representative survey carried out in 2010. The identification strategy is adopted from the recent literature on the microeconomics of discrete choice. In the Ruhr region, over the past decades out-migration and demographic ageing coincided with changes in intra-regional migration. After several decades of suburbanisation, in the 1990s net migration to suburban municipalities came to a halt. The micro-level analysis finds that among household preference apparently the desire for centrality took over from preference of low-density surroundings, which had dominated for decades. Within urban areas, migration now concentrates more on selected neighbourhoods in close vicinity to the city centres. In other neighbourhoods, due to low fertility and a comparatively low influx of young inhabitants, the average age has begun to increase. It is a specific characteristic of the Ruhr, which is an amalgam of neighbouring cities, to be less densely populated than other large urban agglomerations in Germany. Lower overall density here combines with a comparatively less pronounced agglomeration of working-age adults in central areas. As a whole, local demographic change implies new challenges for urban policy in many neighbourhoods, both in those not providing the characteristics favoured by most mobile households and in those with a high influx.
    Keywords: demographic change; neighbourhood choice; regional migration; segregation
    JEL: C21 C25 O18 R23
    Date: 2015–10
  10. By: Izabella Szakálné Kanó
    Abstract: It seems to be widely accepted that regional development extensively depends on two types of agglomeration economies. On the first hand there are urbanization economies, namely regions with diverse economic environment, these provide firms with opportunities to grow and improve their technologies. On the second hand there are localization economies, which mean regions gaining from specialization because firms enjoy presence of suppliers, specialized labor and knowledge spillover among co-located partners. This is especially important in case of knowledge intensive industries. Knowledge-intensive industries have attracted a great attention nowadays in researches because of its contribution to the development of knowledge driven economy. They generate positive effects on the regional economy and have increasingly high importance in less developed regions, like Hungary. The identification of spatial distribution, the geographical co-location of knowledge-intensive economic activities is substantial to define potential leading industrial branches in regions. Our argument is closely connected to the recent emphasis of European Union on smart specialization. Several different methods can be found in the literature measuring the specialization of regions and the concentration of industries. These two phenomena build two scopes of localization economies, the geographical and the sectorial ones. Our paper addresses the spatial distribution of Hungarian manufacturing industries computing raw concentration index EG G and spatial concentration index EG ?? proposed by Ellison and Glaeser (1994) as measures of internal and external economies of scale. Computations are based on the number of employees for a 17 years period covering early stage of Hungarian transition economy, the EU access and the economic crisis (1996-2012). Our investigation is based on two different types of territorial units: city-regions and subregions (LAU 1 level. In order to apply regional development strategies in regions, one has to consider nodal regions, i.e. functional regions established from labour commuting zones with a powerful centre: the 23 city-regions. Labour commuting zones often extend beyond the borders of subregions (175), but latter are still well applicable for investigation of concentration. Based on our calculations we compared 1. measured spatial concentration of knowledge intensive industries and that of non-knowledge intensive ones. 2. measured spatial concentration based on city regions and subregions. 3. measured spatial concentration of NACE 2-digits and NACE 4digits industries by computation of co-agglomeration index (EG ??) We also investigated change of employment, firms and average firm size of industries over time. Our preliminary results indicate emphasized geographical concentration of knowledge intensive industries compared to non-knowledge intensive ones. The vast majority of cases, this concentration arises from the external economies of scale and it is even more present in case of city-regions than in case of subregions.
    Keywords: specialization; geographic concentration; manufacturing industries; economic crisis
    JEL: O14 R12
    Date: 2015–10
  11. By: Stefan Lüthi; Alain Thierstein; Michael Hoyler
    Abstract: World cities are important nodes in the global networks of knowledge-based economies. As a result of the growing complexity of knowledge creation, firms increasingly organise their activities in business networks that operate across different spatial scales. On the global scale, new information and communication technologies enable the control of business processes across multiple locations. On the regional scale, the advantage of geographical proximity plays an important role. Collective learning processes require a common cognitive, social and cultural context as well as regular face-to-face contacts. Short distances bring people together, thereby stimulating information spillovers and the creation of new ideas. These places of intensive interaction are no longer exclusively located in the traditional inner cities. Rather, they are increasingly found in new urban centres, edge cities, airports or at the stations of high-speed rail networks. The result is a highly polycentric metropolitan system, characterised by accelerated growth in and around smaller cities and towns within the wider metropolitan orbit of one or several big cities. The growth of the knowledge economy has led to new forms of business networks linking cities and towns across different spatial scales. Various attempts have been made to analyse these networks empirically using the interlocking network model of the Globalization and World Cities (GaWC) research network. Two approaches can be distinguished from a spatial perspective: a global approach that studies the world city network from the perspective of the largest advanced producer service firms, and a national approach that starts with the most important knowledge-intensive firms located within specific territorial boundaries. This paper compares the methodological implications and empirical outcomes of both approaches with reference to recent case studies of the German space economy. Both approaches pursue similar objectives: to investigate external relations of German cities, both transnationally and on the national scale. Furthermore, both approaches use the same analytical instrument: the interlocking network model of GaWC. Differences exist in the theoretical argumentation: the global approach is grounded in world city research; the national approach, on the other hand, is anchored in debates in regional science, economic geography and spatial planning. In this paper, we argue for the need of scale-sensitive interpretations of connectivity patterns built by the interlocking network model and conclude with some tentative recommendations for the methodological direction of future research in world city network studies.
    Keywords: world city network; Germany; mega-city region; knowledge economy
    JEL: R12 R58
    Date: 2015–10
  12. By: Martin Maris
    Abstract: Evolution of the regional imbalances over the territory is closely linked with the development of commodity-cash relations and hence with creation of the market economy. Since the establishment of the market economy in most countries over the world; rent, interest, yield and wage became the major market driver of the production factors in order to make its localization decisions. It led to spatial organization and deployment of the scarce resources over the territory. The specific feature of these scarce resources is, that they are distributed unevenly over the territory. In the background affects centrifugal and centripetal forces which condition the concentration of the scarce resources in some areas and conversely its deconcentration in other areas. Main object of the paper is to analyse and evaluate effects of centrifugal and centripetal forces on regional economies of the Central Europe countries and recognize some common spatial patterns of the development. In our empirical research we focus on the Central Europe countries, namely Czech Republic, Austria, Slovakia and Hungary. Our sample consists regions of these countries on NUTS III level. For analysis of spatial imbalance within the territory of CE countries we use state variable - regional GDP / capita. In terms of examining causal relations of regional disparities in CE countries is appropriate to rely on tools of spatial statistical analysis. From this point we are concerned with measuring the spatial relations within the regional structure of CE countries. Preliminary we suppose that strongest influence of the centrifugal and centripetal forces is present around the core regions of CE countries, namely: Praha, Bratislava, Wien and Budapest. The object of our paper is measuring the intensity of these forces. Primarily, we examine the spatial imbalance within regions of the CE countries via using the Moran´s autocorrelation statistics, I (1950). We suppose that the spatial differentiation within the regions of CE countries acquire more or less regular pattern, so it, indicates that regional imbalance is conditioned also spatially. Secondary, in more details we focus on local patterns in spatial-temporal data on the wealth, centering on our core regions. For these purpose we use the statistics G_i (d) introduced by Getis and Ord (1992). Our research is based on secondary data sources collected in statistical databases of CE countries . As a basis for measurement we took indicator of regional GDP / capita converted to dollars at PPP. We expect to show on the effects of centrifugal and centripetal forces, which creates clear clusters around the core regions. It also supposes that some signs of the spatial imbalances over the territory are also presents. In conclusion we have to examine possible factors which condition present state.
    Keywords: region; centrifugal and centripetal forces; spatial imbalance; spatial autocorre
    JEL: R12
    Date: 2015–10
  13. By: Grace Carolina Guevara Rosero; Stephane Riou; Corinne Autant-Bernard
    Abstract: The spatial agglomeration of economic activities play a crucial role on productivity but the composition of such an agglomeration is what really matters. There exists an ongoing debate between the predominance of the effects of agglomeration from specialization and diversity. This paper aims to estimate the impact of the type of externalities on the local sectoral productivity in Ecuador, a country of Latin American region for which literature gives little attention. When measuring agglomeration economies, one concern is the endogeneity issue. In this purpose, the instrumental variables method is implemented. We provide estimations using GMM model and we instrument the endogenous variable with a menace index, long lagged population density and spatial lags. Last, we investigate the specific role of urbanization. The intuition is that a critical level of urbanization is required to produce positive externalities as it guarantees the existence of a minimum level of transport and telecommunication infrastructures, of banking and financial services or other specific services. It is also a manner to capture the great heterogeneity of Ecuadorian cantons in terms of urbanization. Our empirical work is mainly based on the Economic Census of Ecuador 2010 which accounts for information declared in 2009. By aggregating the firm data, we build a two-digits industry database at the cantonal level. Precisely, our estimations are based on 86 industries and 221 cantons. From a first polled estimation on 7988 canton and industry pairs, our results suggest the existence of strong positive externalities from diversity impacting on the local productivity of industries and a lower impact of specialization. We also find economies of density, measured by the density of firms at the canton and industry levels that positively influence the local productivity of industries. Competition of firms has a significant negative effect. Moreover, we conduct regressions by distinguishing the manufacturing from the service industry. The magnitude of the externalities from diversity is positive and significant in manufacturing but much higher in the service industry. Interestingly, our regressions exhibit the non-monotonous effect of urbanization on the various externalities that impact on the local productivity. Precisely, the positive externalities arising from diversity are growing with the level of urbanization of cantons. Last, economies of density occur until a urbanization rate of 61%. Above this threshold, the economies of density cease to be positive suggesting that they are overcompensated by congestion effects. However, the effects of diversity and competition does remain highly positive, we therefore do not consider that the threshold of 68% represents excessive agglomeration.
    Keywords: agglomeration externalities; urbanization; Latin America; industry studies
    JEL: O54 L80 O18 L60
    Date: 2015–10
  14. By: Charlie Karlsson; Johan Klaesson; Özge Öner
    Abstract: There is an abundant literature on industrial ecology aiming at explaining the survival propensity of recently started firms. The majority of the contributions concentrate on the character¬istics of the entre¬preneur, the new firm or the industry. Only a small mi¬nority of the ex¬isting studies consider the influence of the loca¬tion where the new firm has been started on survival probability. The evidence of the importance of location in the literature is mixed. However, only a limited share of these studies analyzes the im¬portance of lo¬calized external economies of scale for the survival of newly founded firms. This relative lack of studies is intriguing since, for example, the ?new economic geography? theory empha-sizes the role that clusters of individual industries and of complementary indus¬tries within a distinct geo¬graph¬ical area play in terms of proxim¬ity and network externalities. Thus, a basic motivation for this paper is that the absolute majority of business survival stud¬ies disregard the fundamental facts that every new firm is started in a specific location. A sec¬ond motivation is the fact that in many of the studies that include spatial factors as explana¬tory factors the representation of these factors are often not ideal. A third motivation is that the representa¬tion of geographical space has not taken into consideration of the importance of the hierarchical structure of geographical space. The purpose of this paper is to test the influence of demand and supply conditions and general economic milieu in localities on the survival of newly founded firms while controlling for firm and industry characteristics and using a proper representation of the hierarchical structure of geographical space.
    Keywords: Entry; Start-up size; Market Potential; Region; Industry; Sweden
    JEL: L11 M13 C21 R11 R12
    Date: 2015–10
  15. By: Vera Barinova; Stepan Zemtsov
    Abstract: Russia inherited pattern of economic activity location from the Soviet Union, where the main forms of industry organization were territorial-production complexes (TPC) - networks of industrial organizations united by a single technological process or the chain of raw materials processing. In a market economy in the 90s, economic ties within the TPC were destroyed, leading to a drop in the level of production, fragmentation of large enterprises and the formation of a set of independent and often competing firms. Some scientists believe that this situation over the last 20 years could serve as a necessary foundation for the formation of industrial clusters (in interpretation of modern regional science). Today, interest in clusters in Russia rises again due to the need to find new mechanisms to support production and innovation in a stagnant economy. Ministry of Economic Development of Russia has developed a project to support the pilot territorial innovative clusters by providing funding for infrastructure formation. The selection of cluster initiatives was based on applications from regional governments, interested in attracting of additional investment. Most of the clusters, formed in Russia, are not in innovative sectors, as shown by studies of the Russian Cluster Observatory. But a lot of potential clusters in Russia is not formed due to the high level of distrust between firms, due to lack of understanding of the potential benefits, etc., although these clusters can develop due to geographical proximity (high concentration) of firms. The aim of our work is to identify clusters as areas of geographical concentration of small and medium businesses (SME). We also wanted to check whether the existing cluster initiatives correspond to the concentration of economic activity and whether there is potential for increasing the cluster initiatives. In our work, we use the analysis based on the localization index, but on three geographical levels for verification reasons: regions, districts and cities. Most of the data were collected from RUSLANA database, consisting information of Russian firms. After identifying a high degree of localization of a particular industry or a group of industries, we analyze the location of enterprises, based on distance-oriented methods in specific regions or between regions. The result is a map of the high concentration and localization of small and medium businesses in certain areas in a number of industries. The authors confirmed the existence of traditional and well-known clusters and identified previously unknown concentration of firms that did not declare their interaction. In the last step, the authors conducted field research - a survey of firms in areas of concentration, where clusters today are not formed, for determining the reasons for the lack of interaction.
    Keywords: cluster identification; localization; SME; Russian regions
    JEL: C19 L70 R12
    Date: 2015–10
  16. By: Takashi Akamatsu (Graduate School of Information Sciences, Tohoku University); Tomoya Mori (Institute of Economic Research, Kyoto University); Yuki Takayama (Graduate School of Engineering, Tohoku University)
    Abstract: Agglomeration externalities have been recognized as major sources of lumpy spatial distributions of industries and population. While the abstraction of interregional space has been a common exercise, recent increasing availability of disaggregated geographical data and more sophisticated computational techniques have promoted counterfactual analyses based on many-region models of agglomeration externalities with explicit interregional space (e.g., Redding and Sturm, 2008; Allen and Arkolakis, 2014). A caveat is that incorporating interregional space to a many-region model with agglomeration externalities does not by itself warrant the formation of polycentric agglomerations in stable equilibria—a crucial property in order to replicate the observed geography of agglomerations. We elaborate this point by comparing a pair of new economic geography models, Forslid and Ottaviano (2003) and Helpman (1998). In a two-region economy, these models exhibit both “agglomeration” (i.e., a relative concentration of mobile agents in one of the regions) and “dispersion” (i.e., a uniform distribution of mobile agents across the two regions). But, if the location space were more disaggregated, only the former admits poly-centric agglomerations in stable equilibria, while in the latter, only a mono-centric agglomeration can occur if any.
    Keywords: new economic geography model, many-region model, multiple agglomerations, stability, bifurcation
    JEL: R12 R13 F15 F22 C62
    Date: 2015–10
  17. By: Balázs Páger; Éva Komlósi
    Abstract: This paper aims to elaborate the role of agglomeration effects on countries' competitiveness and entrepreneurial performance. Our research contributes to the understanding of the relationship that exists between a country's urban system characterized by spatial agglomeration (concentration) or deglomeration (deconcentration) processes, and its competitiveness and entrepreneurial performance, respectively. Urbanization economies refer to considerable cost savings generated through the locating together of people and firms across different industries. It has recently become an axiom that the better performance of global cities, as important nodes of innovation and creativity, is derived from agglomeration effects. This general assumption follows that the more concentrated an urban system of a country, the more competitive and better its entrepreneurial performance. Even though this notion has gained quick and ardent acceptance from practitioners, the related literature shows contradictory results and it has induced a heated debate in academic circles, because it has raised serious doubts about the "bigger is better" theory. We hope to contribute to this debate with our detailed analysis. In order to test our hypothesis empirically, we selected 70 countries and calculated the so called ROXY Index measuring the degree of agglomeration or deglomeration in their urban system. To exemplify country level competitiveness we applied the Global Competitiveness Index (GCI), while the Global Entrepreneurship and Development Index (GEDI) was used to demonstrate country level entrepreneurial performance. Our results affirmed that high concentration of population is only one important factor of competitiveness and entrepreneurial performance while other effects may exist. On the other hand, over- or under-concentration of the population within an urban system does not necessary result in a better outcome.
    Keywords: urbanization economies; entrepreneurship; competitiveness; spatial cycles
    JEL: O18 L26
    Date: 2015–10
  18. By: Fernando Bruna
    Abstract: This paper posits a new approach to the ?wage equation? of the New Economic Geography (NEG). On one side, it is shown that the NEG provides a spatial explanation of marginal costs, instead of wages. On the other side, and focusing on the statistical properties of the data, it is explained why the wage-type equations tend to be accepted in empirical tests for European data. Proxying the dependent variable by gross value added per capita and Market Potential by a Harris?s (1954) index, the paper proposes two tests that are not allowed by the NEG, but useful to identify the key elements conditioning the results. It is shown that the way in which Market Potential is built generates similar estimation results for variables that do not measure market size. Market Potential captures locational information but the empirical wage-type equation is also shown to be similar when the focus of attention changes from global to local spatial patterns. The results reveal a high degree of uncertainty when interpreting an empirical wage-type equation.
    Keywords: New Economic Geography; wage equation; Market Potential; production function
    JEL: C21 F12 R12
    Date: 2015–10
  19. By: Kristina Nyström
    Abstract: Job displacement, which is defined as an involuntary loss of job due to economic downturns or structural changes, hit millions of workers each year. According to OECD (2013) 2-7 percent of workers are displaced every year. For Sweden, OECD (2013) reports an average displacement rate of about 2 percent for the period 2000-2008. Our knowledge on the individual consequences of displacement, in terms of, for example, unemployment duration, and earning losses is comprehensive (See e.g. Hammermesh 1989 and OECD (2013). However, knowledge about regional differences in patterns of displacements and regional resilience to displacements is still limited. For instance, Eliasson and Storrie (2006) note that prior to their study knowledge about regional patterns of Swedish displacements is primarily based on case studies. Using individual-firm level data from all firms and regions in Sweden Nyström and Viklund Ros, (2014) shows that displacement rates and the regional ability to re-allocate competence after a business closure varies substantially. This paper intends contribute to the knowledge about the regional resilience to business closures. The term resilience refers to the ability adapt to a chock incurred by, for example, business closures. In this paper I intend to study which regional characteristics that influence the regional resilience to displacements. Which regional characteristics influence if displaced employees quickly are re-employed in other industries and businesses? In this paper it is argued that the regional environment in terms of i) the characteristics of regional closures, ii) the characteristics of the individuals in the region, iii) characteristics of the regional industry and iv) the characteristics of the regional economy influence the regional resilience to displacements in terms of the ability to re-employ displaced employees. The characteristics of regional closures, refers to, for example, the regional share of closures and the size of the closures. The characteristics of the individuals in the region refer to, for example, the competence in terms of education, age structure and share of individuals with immigrant background in the region. Characteristics of the regional industry refers to the unrelated and related industry variety (Frenken et al 2007 and Boschma et. al 2012) and the industry structure in terms of the share of the manufacturing industry and service sectors. Finally, the characteristics of the regional economy refer to, for example, the size of the region, unemployment level and industrial turbulence in terms of entry and exit rates. In the empirical part of the paper a unique dataset of matched firm-employees enable us to study the regional patterns of re-employment of displaced workers in 81 Swedish regions 2001-2009. For policymakers understanding how the re-employment process after displacements differs across regions should be valuable knowledge.
    Keywords: Displacements; exit. Labor mobility; regional development
    JEL: J6 R1
    Date: 2015–10
  20. By: Guineng Chen; Marcos Correia; João de Abreu e Silva
    Abstract: The inauguration of a HSR line increases the accessibility to people, resources, goods, and markets, which brings locational advantages, thus attracting new households, economic activities, allowing greater agglomerations. Intuitively, the locations where the accessibility increases higher than average may gain more economic opportunities and more growth. Accessibility indicators measure the relative location importance, affecting the attractiveness and economic development potentials of regions. They are also able to measure the disparities among regions to define how transport and development impacts are distributed across geographical areas or population. In order to evaluate the impacts of accessibility on the regional economic growth, choosing the most suitable accessibility indicator is rather crucial. To analyze how well different types of accessibility indicators are able to capture the spatial distributions of the regional economic variables, this paper is set to study the ex-post impacts of accessibility due to the HSR network expansion in the 2000s at provincial level in Spain and its relation to the evolution of several economic performance indicators (GDP, population, employment and number of firms) during the same time period. Four accessibility indicators corresponding to different conceptualizations are introduced: one location indicator, two economic potential indicators and one daily accessibility indicator. The study area and the zoning level for the analysis is comprised of 47 provinces in continental Spain. The visualization procedure for accessibility indicators and the economic variables is supported by ArcGIS® software. To calculate the accessibility values, travel times between all the municipalities by railway are computed for the year 2000 and 2010 using a GIS-based network with network analysis tool box in ArcGIS®. The relative changes of accessibility and economic variables for all the provinces of Spain are presented and analyzed. The distribution patterns of the accessibility indicators and economic variables are compared. The obtained results are expected to help better understanding the concept of accessibility and its explanatory power in the economic impact analysis
    Keywords: High-speed rail; Accessibility indicators; Regional development.
    JEL: R Z
    Date: 2015–10
  21. By: Marcos Sanso-Navarro; Maria Vera-Cabello
    Abstract: This paper deals with the relationship between knowledge, innovation and regional growth. The study is carried out through the application of nonparametric estimation methods to European data at NUTS2 level. We provide evidence that the share of innovative ...firms plays a more relevant role in explaining regional growth than R&D expenditures. Further, inward FDI turns out to be a robust growth determinant. Our results also suggest that the effects induced by these variables are of a heterogeneous nature. As a byproduct of the analysis, we show that the estimation results from a local-linear kernel regression can be used for the identi...cation of spatial patterns. In this respect, we ...find a cluster of innovation-driven labour productivity growth in Germany.
    Keywords: Regional growth; knowledge; innovation; nonparametric methods; nonlinearities
    JEL: C14 C20 O18 R11
    Date: 2015–10
  22. By: Tobias Seidel; Maximilian von Ehrlich
    Abstract: Using a natural experiment from Germany, we show that temporary place-based subsidies generate persistent effects on economic density. We identify employment and capital formation as main channels for higher income per square kilometer. As the spatial regression discontinuity design allows us to control for all spatially-continuous determinants of agglomeration (e.g. home-market effects, knowledge spillovers), we attribute an important role to capital formation in explaining persistent spatial patterns of economic activity. However, estimates of externalities at the treatment border point to small net effects of the policy. We find strong evidence that pre-treatment land owners have benefitted substantially from the program and that transfers have shown larger effects in high-density places. Finally, accounting for regional subsidies raises the causal effect of market access for economic development as identified in Redding and Sturm (2008) by about 45 percent.
    Keywords: Regional policy; Economic geography; Persistence; Regression discontinuity
    JEL: H25 H41 H54 O15 O18 R12
    Date: 2015–10
  23. By: Martin Andersson; Johan P Larsson; Joakim Lundblad
    Abstract: This paper revisits a classical inquiry by addressing the question of localization and urbanization economies. We propose that specialization and diversity may offer externalities operating at different spatial scales. Using high-resolution geo-coded plant-level panel data for Swedish cities allowing us to observe neighborhoods of 1 km2, we estimate a firm-level production function to show that close proximity to employment density in the own industry, as well as city-wide diversity, positively contribute to productivity of firms. While localization economies appear to be bound to the immediate neighborhood level within cities, urbanization grow stronger at larger spatial scales. These results provide some support for that urbanization economies and localization economies not only co-exist but also co-depend.
    Keywords: specialization;diversity;productivity; neighborhood;attenuation;externalities;
    JEL: R12 R11 R23 J24
    Date: 2015–10
  24. By: Anne Otto; Rikard Eriksson; Martin Henning
    Abstract: This paper follows the industry employment histories of all individuals at some point affiliated with the declining German and dismantling Swedish shipbuilding industries 1970-2000. We analyse the situation of the individual workers leaving shipbuilding through investigating to what extent they were employed at all, tended to move to related sectors inside or outside the region, and whether such moves were beneficial for the individuals. Drawing on recent research in especially Evolutionary Economic Geography and the impact of inter-industry relatedness on the prospects of regional economic change, we find remarkably similar results for the West German and Swedish case. Our findings indicate a notable impact of both geographical and industrial frictions of movement, and of the regional industry structure on the labor market outcomes for the workers leaving shipbuilding. These findings are discussed within the context of a mature industry in developed economies.
    Keywords: Geographic Labor Mobility; Industry Studies
    JEL: J61 L60
    Date: 2015–10
  25. By: Hildegunn Stokke; Jørn Rattsø
    Abstract: Income taxation may affect the regional allocation of population when prices vary over space. Our contribution is to compare different income tax systems in a migration equilibrium model for Norway using improved measure of regional wage differences. We apply register data of individual wages for the entire population to identify wage differences, while controlling for both observable and unobservable worker characteristics and allowing for dynamic learning effects on wages. We estimate regional differences in cost of living based on detailed data on housing prices. The model is calibrated to the current nominal income tax system and compared to an undistorted equilibrium without income tax. We investigate two alternative tax systems: Real income taxation where the real tax burden is proportional to real wages and equal real taxes across regions motivated by taxation of amenities. The numerical simulations document large shifts in the regional distribution of the population as the result of income taxation. The elasticity of population with respect to tax payments comes out with a value of -2.64. Nominal income taxation creates a disincentive to locate in productive high-wage regions, and generates a deadweight loss due to locational inefficiencies equal to 0.028% of income. Real income taxation gives a geographic distribution of the population closer to the undistorted equilibrium, and hence with lower deadweight loss, while equal real taxes is the least efficient tax system.
    Keywords: Income taxation; regional taxation; cost of living; amenities
    JEL: H24 H77 J61 R23
    Date: 2015–10
  26. By: Philipp Ager (Department of Business and Economics, University of Southern Denmark); Casper Worm Hansen (Department of Economics, University of Copenhagen); Lars Lønstrup (Department of Business and Economics, University of Southern Denmark)
    Abstract: This paper investigates the effects of a large temporary shock on the agglomeration of economic activity. Using variation in the potential damage intensity of the 1906 San Francisco earthquake across counties in the American West, we ?find that the earthquake persistently decreased various measures of economic activity, such as population size and total wage expenditures. The main reason for this long-lasting effect is that the earthquake changed the location choice of migrants, who decided to settle in less affected areas of the American West. Our fi?ndings suggest that a large temporary shock can have a persistent effect on the location of economic activity.
    Keywords: Natural Disasters, Economic Development, Location of Economic Activity, Immigration
    JEL: N9 O15 O40 R11 R12
    Date: 2015–10–23
  27. By: Marion Drut; Aurélie Mahieu
    Abstract: This paper aims to correct standard measures of agglomeration economies to account for air pollution generated by commuting. This paper examines the impact of nitrogen oxide (NOX) ? a pollutant mainly released by transportation ? on worker productivity. On one side, literature on agglomeration economies highlights the positive role of employment density on productivity, without accounting for the environmental impact of a better accessibility. On the other side, several studies (Graham, 2007; Rice et al., 2006) show that new transportation infrastructures or policies have a positive effect on accessibility, thus enlarging the opportunities offered to workers and leading to increased labor productivity. However, additional commuting trips may be induced by enhanced accessibility, and generates higher levels of polluting emissions (Goodwin, 1999; Litman, 2011). Epidemiological studies show that atmospheric pollution has a negative and significant impact on human health (see e.g., Currie et al. (2009a, 2009b)), implying lower labor productivity (Lavy et al., 2012; Graff Zivin and Neidell, 2012). This article aims at correcting estimations of agglomeration economies by accounting for air pollution resulting from commuting. More specifically, we consider local air pollution as a determinant of labor productivity and integrate it in the theoretical framework estimating agglomeration economies in order to assess the extent to which pollution limits the full efficiency of production capacities. We use aggregate data for the year 2009 for the 304 French metropolitan employment areas. First, we estimate the effects on labor productivity per worker of employment density, controlling for standard variables. In line with the literature, the results show an increase in productivity of 0.03% for a 1% increase in employment density. Second, we include NOX emissions as a proxy for atmospheric pollution. In line with epidemiological studies, we find that air pollution negatively impacts labor productivity. A 1% increase in the level of NOX emissions leads to almost 0.1% decrease in productivity. Third, we compare the models with and without air pollution. When pollution is accounted for, the positive effect of employment density on productivity is reduced. Finally, we focus on an illustrative case to show the magnitude of the reduction of agglomeration economies when local air pollution is considered. When NOX emissions are included in the model, the productivity gains of agglomeration are reduced by more than 13%. We conclude that accounting for air pollution (NOX) in the econometric model of agglomeration economies allows ?correcting? the effect of density on productivity, confirming that pollution matters. Indeed, introducing new transportation infrastructures and policies improves the accessibility of an area, which enlarges the positive externalities (agglomeration economies) stemming from increased density, but which also generates additional pollution due to induced trips. Yet pollution limits the full efficiency of production capacities.
    Keywords: Agglomeration economies; accessibility; air pollution; transportation policies
    JEL: O18 R23
    Date: 2015–10
  28. By: Mikko Weckroth; Teemu Kemppainen; Jens F.L. Sørensen
    Abstract: Most of the aggregate level analyses on the relationship between objective and subjective measures for well-being have limited themselves to measures of national GDP and mean life satisfaction. We develop this line of research by embedding the analysis into the context of 289 NUTS regions in Europe and replacing the simple life satisfaction measure with measures of active human functioning. This approach suggest that the measures of personal and social well-being, as they are operationalized in the 6th round European Social Survey (ESS) questionnaire, can be treated as subjective indicators for social and human capital and thereby be are associated with the regional level GDP in cross-sectional analysis. The focus of this study could hence be defined as an interdisciplinary attempt to understand economic reality from the perspective of subjective well-being research. Thus, the paper also argues for better interdisciplinary communication between the traditions of economic geography and subjective well-being research. First, the results give further validation to the previous research indicating that general ´social trust` is strongly associated with economic performance. This component was shown to have robust and independent association with the dependent variable in both OLS and spatial filtering models. Also the indicator for ´social contact and support` appears to have positive and significant correlation with the regional GDP. On the subjective human capital the strongest predictor for regional GDP is a sense of ´competence and meaning` among the population. However, from the perspective of personal wellbeing, there seems to be some sort of tradeoff regarding some elements of objective and subjective wellbeing; the component ?autonomy and control` seems to be negatively correlated to economic performance. All of the effects described above proved robust also after including the objective control variables (population density, intramural R&D expenditure, share of tertiary educated population and employment). The results of this study are hoped to contribute to literature on regional economic development. This study offers some new insight to the instrumentalization and measuring of social and human capital. The subjective indicators used in this study are reflecting the quality of both human and social capital without retaining only to the objective quantity such as educational (human capital) or associational (social capital) attainment. From the policy perspective the results give tentative support to bottom-up policies facilitating local capacity building through supporting the psychological and social wellbeing and positive human functioning in regions. However, the cross-sectional framework limits significantly the possibility for any policy suggestions as we cannot confirm the assumptions on causalities embedded in the analysis. The results of this study could however inspire new interdisciplinary enquiries on this field of research and offer new alternative measures for building regional growth models.
    Keywords: human capital; social capital; subjective well-being; GDP; NUTS regions; informa
    JEL: R12 O11 I30
    Date: 2015–10
  29. By: Alicja Olejnik; Jakub Olejnik
    Abstract: This paper is an attempt to explain variations across EU regions in productivity growth and takes into consideration the important structure of the age-productivity relation of Human Capital. The study is fundamentally based on the theory of Fingleton?s model which analyses the spatial process of productivity growth on the on the foundations of the theory of New Economic Geography. The applied specification links manufacturing productivity growth to the growth of manufacturing output by the means of Verdoorn?s law. The model incorporates productivity-adjusted human capital understood as Total Human Capital Productivity corrected with age structure with the use of productivity as a function of age. Moreover, a new approach to defining the age-productivity curve has been introduced. Based on the previous studies found in the literature the age-productivity function has been interpolated by the means of Radial Basis Function method with thin-plate spline. The age-productivity function allows to describe how the work performance differs over the life period and thus allows for differences in age structure of employees in regions under research. This study covers 261 NUTS 2 regions of EU excluding some French, Portuguese and Spanish regions due to their isolated position and Croatia because of the lack of comparable data. All data used in the empirical part of this study are published by Eurostat and refer to the years 2000-2013. The regional productivity is explained by the quotient of regional GDP and the number of Economically Active Population. The productivity growth is approximated by the exponential change of regional productivity in these years to regional productivity in the year 2000. The regional GDP is expressed in millions of Euro in constant prices (year 2000), where Economically Active Population is in thousands of people 15 years or over. The Human capital is defined by the Employment in Technology and Knowledge-intensive Sectors as a percentage of Economically Active Population. The model has been tested through implemented methodology, namely a spatial panel model with fixed effects. The model presented provides evidence of the importance of increasing returns to scale for regional economic growth, which lead to divergence effects for EU regions. Similar implications can be observed in the case of regionally differentiated human capital. Furthermore, the country fixed effects turned out to be significant. The findings also suggest that productivity in jobs requiring problem solving and learning skills reaches a plateau for the 35-45 age bracket and has its peak around the age of 40. We suggest that the applied approach constitutes an innovation providing additional information hence a deeper analysis of the investigated problem.
    Keywords: spatial panel; productivity growth; Verdoorn?s law; age-productivity curve
    JEL: O40 J24 C21 C23
    Date: 2015–10
  30. By: Adelheid Holl; Ruth Rama
    Abstract: There is broad agreement among economists and policy makers that economic growth is nowadays largely driven by the capacity of firms to innovate. The financial and economic crisis that started in late 2007 has had a far reaching impact on countries around the world. Spain has been one of the countries worst affected. As a result, the government has reduced public funding in R&D. At the same time, the continued credit crunch has dramatically worsened the possibilities for financing new ideas and projects. One of the consequences of the economic crisis is that many companies have reduced their innovation-related activities; however, some firms have been more resilient than others and recent studies also show that there are important differences across countries regarding the degree to which the economic crisis has affected firms? innovation investment. It has been argued that national institutional settings and the structural characteristics of national innovation systems have played an important role in shaping how firms have responded to the crisis. However, within a country, regions may also matter. Learning processes underlying innovation are localised and locally embedded, and regional innovation systems (hereafter, RISs) may play a role too. Spain provides an interesting setting for analysing the role of regions, as it is a country with a highly decentralized unitary state with a unique framework of territorial administration. Spanish regions have very diverse economies and also different degrees of fiscal and political autonomy. They vary greatly in terms of their innovation performance as well as regarding their regional innovation and technology policies. Moreover, their responses to the economic crisis in terms of regional policies have not been the same. A focus on regional difference can contribute to a better understanding of the innovation strategies employed by firms during the crisis. To date, we still know very little about regional differences and the degree to which regions have shaped firms' innovation behaviour in response to the economic crisis. Our analysis contributes to this literature by drawing on a large national sample of micro-data for Spanish manufacturing and service sector firms. Our results show that the crisis has discouraged a significant number of firms from engaging in innovation. These have been mainly small firms and occasional R&D performers. Significant regional differences are also found in the degree to which the crisis has affected firms? innovation expenditures, even after controlling for sectoral differences and firms? structural characteristics. The Basque Country stands out in our analysis. Firms with R&D employment in this region show a significantly lower probability of having abandoned innovation activities and a somewhat higher probability of even having increased their innovation effort. This regional effect has been especially important for small and medium sized companies.
    Keywords: innovation investment; economic crisis; resilience
    JEL: R1 O3
    Date: 2015–10
  31. By: Michaela Fuchs; Antje Weyh
    Abstract: Against the background of bad labor market conditions with high unemployment, poor job prospects, and low wages, East Germany used to experience long-standing high net migration outflows. During the last years, however, the situation on the East German labor market changed fundamentally, and employers nowadays increasingly experience problems with the recruitment of qualified workers. One popular way to stabilize labor supply has become the systematic approach of East Germans who migrated to West Germany to induce their return. So far, however, the few empirical studies on this topic have relied on survey data or case studies, thereby providing only selective insights on return migration to East Germany. It is thus still an open question how many return migrants there are, which regions they return to, and how relevant their return would be for the local labor markets. In this paper, we analyze labor-market related return migration from West to East Germany and provide some answers to the question on the relevance for local labor markets. Using a unique data set that covers all labor market participants in Germany, we trace the migration and employment history of East Germans as of December 31st, 2012 from 1999 onwards. Our research adds to the existing literature in several ways. First, complementing survey-based findings, we provide detailed and comprehensive descriptive evidence on migration from West to East Germany. Second, we map the spatial migration patterns of the return migrants on the level of NUTS3-regions. Special emphasis is given to the relocation of the place of living only against the simultaneous relocation of the place of work. Third, we take a detailed look at all labor market participants. Apart from employees liable to social security, we consider unemployed, apprentices, and marginally employed. For all four groups, we investigate whether they maintained or improved their labor market status by migration. This way, we contribute to the discussion on the relevance of economic motives versus social ties as motives for return migration. Our results provide good news for the East German districts directly at the former intra-German border, the larger cities and the regions surrounding Berlin that might well profit from return migration for the stabilization of regional labor supply. However, for the remaining mostly rural regions they rather provide bad news.
    Keywords: return migration; regional labor markets; East Germany
    JEL: J30 R23
    Date: 2015–10
  32. By: Tadashi Morita; Takanori Ago; Takatoshi Tabuchi; Kazuhiro Yamamoto
    Abstract: It is assumed in new trade theory and new economic geography that the supply of labor is fixed, which is not true in real labor markets. We develop a model of new trade theory by incorporating an elastic labor supply and analyze the impacts of technological progress on the equilibrium outcomes of working hours and economic welfare. We first show that the labor supply curve is backward bending. We then show that working hours in developed countries are longer in the first stages of development, but shorter in the second stages of development.
    Keywords: international trade; variable markup; endogenous labor supply
    JEL: F10 R10
    Date: 2015–10
  33. By: Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (Dept. of Business Administration and CIRCLE, Lund University)
    Abstract: This paper challenges one of the fundamental propositions within economic geography; that location in knowledge regions contributes to firm performance in general and especially for knowledge intensive firms that compete on the basis of knowledge. Our analysis of Swedish micro-data on 32,535 firms from 2004-2011 provides evidence that knowledge intensive firms benefit less from local knowledge spillovers than firms with comparably low in-house knowledge. This suggests that firms with high internal competencies can compensate for a lack of local knowledge spillovers and that negative knowledge externalities may make location outside knowledge centers more beneficial for such firms.
    Keywords: periphery; firm performance; spillovers; agglomeration
    JEL: O30 R10 R11
    Date: 2015–10–23
  34. By: Vera Ivanova; Hanna Vakhitova; Philip Ushchev
    Abstract: We consider an empirical model in which individuals choose jointly their destination country and occupational choice. We plan to estimate this model using Ukrainian micro-data. The main results (to be yet obtained) will shed light on joint determinants of workers' migration decisions and their occupational choice in destination regions.
    Keywords: labor migration; occupational choice; new economic geography
    JEL: J61 J62 R13
    Date: 2015–10
  35. By: Dan S. Rickman (Oklahoma State University); John V. Winters (Oklahoma State University)
    Abstract: In this paper, authors and institutions are ranked based on the number of publications in ten core regional science journals during the period 2010-2014. Alternative rankings are constructed by considering only publications in the top four of the ten journals and also by adjusting for journal impact factors. Two impact factors are calculated for each regional science journal. The first is based on citations by the other nine core regional science journals, and the second by citations from all journals in the database Scopus. Discussion is included regarding the patterns and consistency of the rankings across alternative criteria. Comparisons also are made to previous regional science publication rankings of authors and institutions.
    Keywords: Regional Science, Urban Economics, Economic Geography, University Rankings
    JEL: R00
    Date: 2015–10

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