nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒11‒07
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Inter- and intra-firm linkages: Evidence from microgeographic location patterns By Behrens, Kristian; Sharunova, Vera
  2. Regional Competitiveness Under New Perspectives By Karl Aiginger; Matthias Firgo
  3. Border effects and urban structure By Dávid K. Nagy
  4. The Migration Response to Increasing Temperatures By Cristina Cattaneo; Giovanni Peri
  5. International Trade and Local Labor Markets: Are Foreign and Domestic Shocks Created Differently By Mark D. Partridge; Dan S. Rickman; M. Rose Olfert; Ying Tan
  6. Do People Shape Cities, or Do Cities Shape People? The Co-evolution of Physical, Social, and Economic Change in Five Major U.S. Cities By Nikhil Naik; Scott Duke Kominers; Ramesh Raskar; Edward L. Glaeser; César A. Hidalgo
  7. A closer look at the long-term patterns of regional income inequality in Spain: the poor stay poor (and stay together) By Daniel A. Tirado-Fabregat; Alfonso D’ez-Minguela; Julio Mart’nez-Galarraga
  8. Spatial analysis of the financial system in urban areas: The case of Buenos Aires city By Andrés Denes; Gastón Repetto
  9. Express delivery to the suburbs. The effects of transportation in Europe’s heterogeneous cities By Miquel-Ángel Garcia-López; Ilias Pasidis; Elisabet Viladecans-Marsal
  10. A place-based strategy to smart specialisation: the case of Apulia By Chiara Pancotti; Emanuela Sirtori; Silvia Vignetti
  11. Convergence of Electricity Consumption in Turkey: A Spatial Dynamic Panel Analysis By Gülsüm Akarsu; Burcu Berke
  12. Identification of Regional Clusters in Mexican Manufacturing Industry By Chávez Juan Carlos; García Loredo Katia
  13. W By Eric Neumayer; Thomas Plümper

  1. By: Behrens, Kristian; Sharunova, Vera
    Abstract: Multiunit firms can draw on internal resources, thus their plants should depend less on external agglomeration benefits than comparable standalone plants. Because interacting at a distance is costly, multiunit firms should also be geographically 'compact'. We dissect the microgeographic location patterns of hundreds of thousands of Canadian establishments and find robust evidence for these predictions: multiunit firms are compact, and their plants locate in areas offering potentially less external agglomeration benefits. Within firms, plants with stronger vertical links are geographically more central. The latter effect is stronger for plants in high transport cost industries that produce durables and source a larger share of non-homogeneous inputs. These findings suggest that vertical supply chains are important in explaining firms' internal spatial organization.
    Keywords: inter-firm linkages; intra-firm linkages; microgeographic location patterns; multiunit firms; spatial organization of firms
    JEL: D22 L22 R12 R32
    Date: 2015–11
  2. By: Karl Aiginger; Matthias Firgo
    Abstract: The term “competitiveness” has been used in conceptually distinct ways at the firm, regional and national levels. After primarily reviewing existing concepts at the national level, we introduce a new definition of regional competitiveness adapting definitions used in the academic literature. Specifically, we connect “outcome competitiveness” with new perspectives on a more socially inclusive and ecologically sustainable growth path, as envisaged in the WWWforEurope research program, in which 33 European research groups are taking part. Evaluating competitiveness requires both an input assessment (costs, productivity, economic structure, capabilities) and an outcome assessment. We define regional outcome competitiveness as the ability of a region to deliver Beyond GDP goals. For regions in industrialized countries, this ability depends on innovation, education, institutions, social cohesion and ecological ambition. Given this new perspective (of broader Beyond GDP goals), social investments and ecological ambitions should not be considered costs, but rather drivers of competitiveness. This is compatible with a new innovation policy fostering non-technical innovations and a new industrial policy supporting societal goals. Applying this concept to European regions, we show which regions take the "high road" to competitiveness and compare our results with the existing literature.
    Keywords: Regional competitiveness, Beyond GDP goals, composite index, European Union
    JEL: I31 O47 Q56 R11 R58
    Date: 2015–10
  3. By: Dávid K. Nagy
    Abstract: I propose a general model of economic geography to investigate the effect of border changes on the spatial distribution of population. I decompose the total effect into a standard "local effect" related to the change in distance from borders, and a novel "global effect" related to centrality before the border change. The global effect is especially strong in economies with a dominant central region that is home to a large fraction of the country's population. Conforming to this prediction, I show that the global effect played an important role in the population reallocation in Hungary after border changes in 1920.
    Date: 2015–07–15
  4. By: Cristina Cattaneo; Giovanni Peri
    Abstract: Climate change, especially the warming trend experienced by several countries, could affect agricultural productivity. As a consequence the income of rural populations will change, and with them the incentives for people to remain in rural areas. Using data from 116 countries between 1960 and 2000, we analyze the effect of differential warming trends across countries on the probability of either migrating out of the country or from rural to urban areas. We find that higher temperatures increased emigration rates to urban areas and to other countries in middle income economies. In poor countries, higher temperatures reduced the probability of emigration to cities or to other countries, consistently with the presence of severe liquidity constraints. In middle-income countries, migration represents an important margin of adjustment to global warming, potentially contributing to structural change and even increasing income per worker. Such a mechanism, however, does not seem to work in poor economies.
    JEL: F22 Q1 R12
    Date: 2015–10
  5. By: Mark D. Partridge (Ohio State University); Dan S. Rickman (Oklahoma State University); M. Rose Olfert (University of Saskatchewan); Ying Tan (Oklahoma State University)
    Abstract: Despite the attention given to international trade in discussion of the economic struggles of many U.S. regions, it is unclear whether international trade shocks impact local economies more, or differently than shocks originating within the domestic economy. A challenge in making this discernment is separating trade shocks from common or domestic shocks. Therefore, using U.S. county-level data for 1990-2010, this study carefully constructs shocks to local economies, isolating those arising from international imports and exports to assess whether trade shocks have different effects from domestic shocks. In confirmatory analysis, we also employ a novel combination of IV and matching strategies. We examine a variety of indicators including employment growth, population growth, employment rates, wage rates and poverty rates. The results suggest that international trade shocks have some different effects than overall domestic shocks, though likely less than commonly perceived. We also find that domestic shocks dominate international trade shocks in explaining variation in regional labor market outcomes.
    Keywords: international trade, local labor markets, economic shocks, economic geography, regional and urban economics
    JEL: R00
    Date: 2015–09
  6. By: Nikhil Naik; Scott Duke Kominers; Ramesh Raskar; Edward L. Glaeser; César A. Hidalgo
    Abstract: Urban change involves transformations in the physical appearance and the social composition of neighborhoods. Yet, the relationship between the physical and social components of urban change is not well understood due to the lack of comprehensive measures of neighborhood appearance. Here, we introduce a computer vision method to quantify change in physical appearance of streetscapes and generate a dataset of physical change for five large American cities. We combine this dataset with socioeconomic indicators to explore whether demographic and economic changes precede, follow, or co-occur with changes in physical appearance. We find that the strongest predictors of improvement in a neighborhood’s physical appearance are population density and share of college-educated adults. Other socioeconomic characteristics, like median income, share of vacant homes, and monthly rent, do not predict improvement in physical appearance. We also find that neighborhood appearances converge to the initial appearances of bordering areas, supporting the Burgess “invasion” theory. In addition, physical appearance is more likely to improve in neighborhoods proximal to the central business district. Finally, we find modest support for “tipping” and “filtering” theories of urban change.
    JEL: C8 R20 Y10
    Date: 2015–10
  7. By: Daniel A. Tirado-Fabregat (Universitat de Valncia); Alfonso D’ez-Minguela (Universitat de Valncia); Julio Mart’nez-Galarraga (Universitat de Valncia)
    Abstract: This paper explores regional (NUTS3) income inequality in Spain, 1860-2010. Using a novel dataset spanning 150 years, we analyse the evolution of inequality in regional per-capita GDP. To do this, we follow the growth literature and use spatial exploratory tools. Our aim is to understand not only the long-term evolution as regards convergence or dispersion, but also aspects related to income distribution, i.e. modality, mobility and spatial clustering. We therefore use tolls such as kernel density estimates, boxplots, transition probability matrices, Shorrocks indices, KendallÕs !, MoranÕs I and LISA maps. The main finding is that there were two clearly distinguishable periods in the economic development process. First, there was an upswing in regional inequality accompanied by a certain mobility betwee 1860 and 1930. This was followed by a period of regional convergence lasting until the 1980Õs, in which mobility in income class or rank was rather low. As a result, spatial clustering became more significant and income distribution was transformed. Decreasing regional inequality was thus accompanied by a geographical concentration of the richest and poorest regions. While wealthy Spain was located in the north-east, poor Spain was in the south, particularly the south-west. Mobility has also been virtually non-existent in recent decades. All in all, the study shows the importance of history in the shaping of SpainÕs regional income distribution.
    Keywords: Regional inequality, Spain, Regional growth, Economic history
    JEL: C21 O18 R0 N64 F14
    Date: 2015–10
  8. By: Andrés Denes (Central Bank of Argentina); Gastón Repetto (Central Bank of Argentina)
    Abstract: Broadening the geographical coverage of the Önancial system is one of the concerns of the Central Bank of Argentina. In this regard, e§orts have been made to achieve a diagnosis of this issue at a national level. These led to concrete policy measures. Nevertheless, the spatial distribution of Önancial systems in large urban areas has been less explored. This paper aims at providing a comprehensive study of the geographical distribution of the supply and demand for Önancial services in the city of Buenos Aires. Our results are useful as drivers for economic and Önancial policy making at a urban level.
    Keywords: Buenos Aires City, financial system, spatial analysis
    JEL: C31 G21 G28 R12
    Date: 2015–10
  9. By: Miquel-Ángel Garcia-López (Universitat Autònoma de Barcelona & IEB); Ilias Pasidis (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB)
    Abstract: This paper provides evidence for the causal effect of the highway and railway infrastructure on the suburbanization of population in European cities. We adopt different measures of transportation infrastructure and estimate their joint effects on suburbanization using a two-step panel approach. Our main results suggest that an additional highway ray displaced approximately 4% of the central city population in European cities over a 10-year period, whereas we find no significant effect for the railways on average. However, railways did cause suburbanization those located in Central-North Europe. When employing the full time span covered by our data and accounting for the diversity of European cities, we find a smaller effect of highways on suburbanization during more recent decades and for “cities with history”. Factors such as historical urban amenities, traffic congestion, urban policies etc. appear to provide reasonable explanations for these differences. The findings of this paper are novel and provide valuable insights for European regional and transport policies.
    Keywords: Suburbanization, transportation, Europe
    JEL: R4 R2 O4
    Date: 2015
  10. By: Chiara Pancotti (CSIL Centre for Industrial Studies); Emanuela Sirtori (CSIL Centre for Industrial Studies); Silvia Vignetti (CSIL Centre for Industrial Studies)
    Abstract: A debated policy issue is how to combine the excellence goals chased by Research and Innovation (R&I) policies and the need to reduce regional disparities as of the EU Cohesion Policy priorities. In other words there is a tension between concentrating funds in core and well-endowed urban areas, in order to reach economies of scale and scope, or rather favouring less endowed, peripheral and economically weaker regions, which could be less prepared to achieve excellence in innovation and research. A way to address this trade-off has been proposed by the recent smart specialisation approach. This approach admits the possibility for any region to generate innovation, by leveraging its own strengths and competitive advantages and selectively targeting its place-based R&I strategy on those economic activities in which the region can hope to excel. However, the conditions which could actually ensure a synergic relation between different policies aiming at enhancing European competitiveness, overcoming possible obstacles and tensions, still have to be explored. This paper aims at providing some insights on how and at which conditions regional innovation policies can be effective in promoting both excellence and cohesion objectives in lagging behind EU regions. To this end, the case of the regional innovation policy carried out by Apulia region (Southern Italy) is presented. The experience of Apulia indicates that there is scope for lagging behind regions to develop well-designed regional innovation systems, supporting the development and implementation of far reaching innovation strategies adapted to the specific needs and assets of regional economy. At the same time, there is a pressing need to develop novel practices of governance in particular as regards avoiding demand-driven approach which adapts excessively to the perspectives of local firms and can be more easily (and in difficult circumstances perhaps even necessarily) prone to short termism. This paper critically describes elements of strengths and weaknesses observed within the case study of Apulia region, to produce lessons learned of more general relevance.
    Keywords: smart specialisation, place based, cohesion policy, regional innovation system
    JEL: O25 O38 R58
    Date: 2015–09–01
  11. By: Gülsüm Akarsu (Ondokuz Mayıs University, Faculty of Economic and Administrative Sciences); Burcu Berke (Niğde University, Faculty of Economic and Administrative Sciences)
    Abstract: The issue of convergence has been discussed by many theoretical and empirical studies beginning by the major contributions of Solow (1956), Baumol (1986), and Barro and Sala-i Martin (1991). In the literature, there are two different convergence concepts, as betaconvergence and sigma-convergence. However, in this study, our focus is on the betaconvergence. As per capita electricity consumption has been considered as an indication of economic growth and development, this study aims to test the presence of “conditional betaconvergence” of per capita electricity consumption among the provinces of Turkey for the period between 1987 and 2013. We employ a spatial dynamic panel data model with fixed effects in order to account for spatial spillover, spatial clusters and cross-sectional heterogeneity. Also, we consider two types of spatial models as Spatial Autoregressive Model and Spatial Error Model. We find that our results are robust to the different specifications of model and weight matrices, however, weight matrix based on the nearest three neighbours perform better than others. Findings show the evidence of conditional beta-convergence of per capita electricity consumption among the provinces of Turkey as well as the existence of spatial clusters and spillovers. Therefore, we can conclude that the regional policies are successful to reduce the regional disparities related to the electricity consumption.
    Keywords: : Convergence, Per Capita Electricity Consumption, Spatial Dynamic Panel Data Model, Spatial Effects
    JEL: C50 Q41 R10
    Date: 2015
  12. By: Chávez Juan Carlos; García Loredo Katia
    Abstract: This research presents a methodology to identify regional clusters based on the estimation of location's coefficients and measures of spatial autocorrelation. Local Moran I index is used as a measure of spatial autocorrelation, which allows to obtain a more varied typology of regional clusters. The methodology was applied to both the Mexican manufacturing industry as a whole, and its partition in 14 industry groups for 1993 and 2008. The results indicate the existence of heterogeneity in regional patterns of agglomeration of manufacturing activity at the aggregate level and at group level. It is shown that the process of relocation of manufacturing industry that occurred after the entry into force of the North American Free Trade Agreement (NAFTA) differentially affected the patterns of agglomeration of activity in different regions of the country.
    Keywords: Spatial autocorrelation; Location coefficient; Regional clusters; Manufacturing.
    JEL: L60 R11 R12
    Date: 2015–10
  13. W
    By: Eric Neumayer; Thomas Plümper
    Abstract: In spatial econometrics, W refers to the matrix that weights the value of the spatially lagged variable of other units. As unimportant as it may appear, W specifies, or at least ought to specify, why and how other units of analysis affect the unit under observation. This article shows that theory must inform five crucial specification choices taken by researchers. Specifically, the connectivity variable employed in W must capture the causal mechanism of spatial dependence. The specification of W further determines the relative relevance of source units from which spatial dependence emanates, and whether receiving units are assumed to be identically or differentially exposed to spatial stimulus. Multiple dimensions of spatial dependence can be modeled as independent, substitutive or conditional links. Finally, spatial effects need not go exclusively in one direction, but can be bi-directional; recipients can simultaneously experience positive spatial dependence from some sources and negative dependence from others. The importance of W stands in stark contrast to applied researchers’ typical use of crude proxy variables (such as geographical proximity) to measure true connectivity, and the practice of adopting standard modeling conventions rather than substantive theory to specify W. This study demonstrates which assumptions these conventions impose on specification choices, and argues that theories of spatial dependence will often conflict with them
    JEL: C1
    Date: 2015

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