nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒11‒15
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Tolerance, Agglomeration and Enterprise Innovation Performance: A Multi-Level Analysis of Latin American Regions By Edward Lorenz; Jana Schmutzler
  2. Distance is crucially important, at least for neighbors – foreign employment at the district level By Wolfgang Nagl; Robert Lehmann
  3. Spillovers from Immigrant Diversity in Cities By Thomas Kemeny; Abigail Cooke
  4. The Spatial Decay in Commuting Probabilities: Employment Potential vs. Commuting Gravity By Gabriel M. Ahlfeldt; Nicolai Wendland
  5. Spatial Mismatch through Local Public Employment Agencies? Answers from a French Quasi-Experiment By Mathieu Bunel; Elisabeth Tovar
  6. Households or locations ? cities, catchment areas and prosperity in India By Li,Yue - SARCE; Rama,Martin G.
  7. QML Estimation of the Spatial Weight Matrix in the MR-SAR Model By Saruta Benjanuvatra; Peter Burridge
  8. Equilibrium Commuting By Berliant, Marcus; Tabuchi, Takatoshi
  9. An Empirical Analysis of Japanese Industrial Agglomeration and Factors of Supply Chain Internationalization in East Asia: A case of Japanese food, electronics, and automobile firms (Japanese) By TOKUNAGA Suminori; AKUNE Yuko; IKEGAWA Maria; OKIYAMA Mitsuru

  1. By: Edward Lorenz (Université Nice Sophia Antipolis, France; GREDEG-CNRS); Jana Schmutzler (Universidad de Norte, Colombia; Bergische Universität Wuppertal, Germany)
    Keywords: human capital, tolerance, innovation, regional development, Latin America
    JEL: O30 R10 J24
    Date: 2015–11
  2. By: Wolfgang Nagl; Robert Lehmann
    Keywords: Migration costs; Distance; Foreign Employment
    JEL: F22 J15 J61 O15
    Date: 2015–10
  3. By: Thomas Kemeny; Abigail Cooke
    Abstract: Using comprehensive longitudinal matched employer-employee data for the U.S., this paper provides new evidence on the relationship between productivity and immigration spawned urban diversity. Existing empirical work has uncovered a robust positive correlation between productivity and immigrant diversity, supporting theory suggesting that diversity acts as a local public good that makes workers more productive by enlarging the pool of knowledge available to them, as well as by fostering opportunities for them to recombine ideas to generate novelty. This paper makes several empirical and conceptual contributions. First, it improves on existing empirical work by addressing various sources of potential bias, especially from unobserved heterogeneity among individuals, work establishments, and cities. Second, it augments identification by using longitudinal data that permits examination of how diversity and productivity co-move. Third, the paper seeks to reveal whether diversity acts upon productivity chiefly at the scale of the city or the workplace. Findings confirm that urban immigrant diversity produces positive and nontrivial spillovers for U.S. workers. This social return represents a distinct channel through which immigration generates broad-based economic benefits.
    Keywords: immigrants, diversity, productivity, spillovers, cities
    JEL: O4 R0 O18 F22 J61
    Date: 2015–11
  4. By: Gabriel M. Ahlfeldt; Nicolai Wendland
    Abstract: We show that an employment potential capitalisation model, which establishes a spatial relationship between the price of land and the spatial distribution of employment through a transport matrix, produces estimates of the spatial decay in bilateral commuting probabilities that are very close to the decay observed in commuting data.
    Keywords: Accessibility, commuting, employment, gravity, land price, potential
    JEL: R12 R23 R33
    Date: 2015–11
  5. By: Mathieu Bunel; Elisabeth Tovar
    Abstract: Using the unanticipated creation of a new agency in the French region of Lyon as a quasinatural experiment, we question whether distance to local public employment agencies (LPEAs) is a new channel for spatial mismatch. Contrary to past evidence based on aggregated data and consistent with the spatial mismatch literature, we find no evidence of a worker/agency spatial mismatch, which supports a resizing of the French LPEA network. However, echoing the literature on the institutional determinants of the local public employment agencies’ efficiency, we do find detrimental institutional transitory effects.
    Keywords: spatial mismatch, unemployment, public employment service, quasi-experiment.
    JEL: J58 R53
    Date: 2015
  6. By: Li,Yue - SARCE; Rama,Martin G.
    Abstract: Policy makers in developing countries, including India, are increasingly sensitive to the links between spatial transformation and economic development. However, the empirical knowledge available on those links is most often insufficient to guide policy decisions. There is no shortage of case studies on urban agglomerations of different sorts, or of benchmarking exercises for states and districts, but more systematic evidence is scarce. To help address this gap, this paper combines insights from poverty analysis and urban economics, and develops a methodology to assess spatial performance with a high degree of granularity. This methodology is applied to India, where individual household survey records are mapped to ?places? (both rural and urban) below the district level. The analysis disentangles the contributions household characteristics and locations make to labor earnings, proxied by nominal household expenditure per capita. The paper shows that one-third of the variation in predicted labor earnings is explained by the locations where households reside and by the interaction between these locations and household characteristics such as education. In parallel, this methodology provides a workable metric to describe spatial productivity patterns across India. The paper shows that there is a gradation of spatial performance across places, rather than a clear rural-urban divide. It also finds that distance matters: places with higher productivity are close to each other, but some spread their prosperity over much broader areas than others. Using the spatial distribution of this metric across India, the paper further classifies places at below-district level into four tiers: top locations, their catchment areas, average locations, and bottom locations. The analysis finds that some small cities are among the top locations, while some large cities are not. It also finds that top locations and their catchment areas include many high-performing rural places, and are not necessarily more unequal than average locations. Preliminary analysis reveals that these top locations and their catchment areas display characteristics that are generally believed to drive agglomeration economies and contribute to faster productivity growth.
    Keywords: Housing&Human Habitats,National Urban Development Policies&Strategies,Population Policies,Rural Poverty Reduction,Urban Housing and Land Settlements
    Date: 2015–11–05
  7. By: Saruta Benjanuvatra; Peter Burridge
    Abstract: We investigate QML estimation of a parametric form for the spatial weight matrix, W, appearing in the mixed regressive, spatial autoregressive (MR-SAR) model and extend the identifiability, consistency, and asymptotic Normality results given by Lee (2004, 2007) to the case when W depends on an unknown parameter, y, that is to be estimated from a single cross-section. Numerical experiments illustrate that the QML estimator works quite well inmoderate sized samples, yielding well-behaved parameter estimates and t-statistics with approximately correct size in most cases. These findings should open the door to a much more flexible approach to the construction of spatial regression models. Finally, the QML estimator using two types of sub-models for the spatial weights is applied to the cross-sectional dataset used in Ertur and Koch (2007), to illustrate the utility of the approach.
    Keywords: Spatial autoregressive model, estimated spatial weight matrix, quasi-maximum likelihood estimator, growth spillovers.
    JEL: C13 C15 C21 R15
    Date: 2015–09
  8. By: Berliant, Marcus; Tabuchi, Takatoshi
    Abstract: We consider the role of a nonlinear commuting cost function in determination of the equilibrium commuting pattern where all agents are mobile. Previous literature has considered only linear commuting cost, where in equilibrium, all workers are indifferent about their workplace location. We show that this no longer holds for nonlinear commuting cost. The equilibrium commuting pattern is completely determined by the concavity or convexity of commuting cost as a function of distance. We show that a monocentric equilibrium exists when the ratio of the firm agglomeration externality to commuting cost is sufficiently high. Finally, we find empirical evidence of both long and short commutes in equilibrium, implying that the commuting cost function is likely concave.
    Keywords: Commuting; Land rent; Wage gradient
    JEL: R13 R41
    Date: 2015–11–06
  9. By: TOKUNAGA Suminori; AKUNE Yuko; IKEGAWA Maria; OKIYAMA Mitsuru
    Abstract: In the first part of this paper, we found positive but weak agglomeration economies resulting from agglomeration and coagglomeration in Japan's manufacturing industry during 1995-2010 using panel data of two-digit and four-digit Standard Industrial Classification of Census of Manufactures and Ellison and Glaeser's (1997) agglomeration index with the same industry and coagglomeration index with different industry groups. On the other hand, in the latter part of this paper, based on the new economic geography (NEG) model, we examined location decision, particularly market potential which appropriate way to take into account the spatial distribution of demand in location choice, supplier access, and agglomeration effects. Especially, we used a Krugman's type market potential using the data of bilateral trade from 1995-2009 in East Asia. After calculating this Krugman market potential and supplier access data, we conducted the logit estimation of country choice of Japanese food, electronics, and automobile firms in 11 East Asia countries including China (mainland), Hong Kong, India, Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, and Vietnam, and analyzed the determinants of the location choice for Japanese electronics firms. From the estimated results, we found wage, infra, Krugman market potential as market demand and supplier access as market supply, and vertical agglomerations such as Japanese final goods and intermediate goods affiliates agglomeration which show agglomeration economies have affected Japanese industry investment in East Asia.
    Date: 2015–11

This nep-geo issue is ©2015 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.