nep-geo New Economics Papers
on Economic Geography
Issue of 2015‒11‒21
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Spatial Business Cycles By enoch hill; Fabrizio Perri; Alessandra Fogli
  2. A proximity-based measure of industrial clustering: By Ruan, Jianqing; Zhang, Xiaobo
  3. Dutch Disease or Agglomeration? The Local Economic Effects of Natural Resource Booms in Modern America By Hunt Allcott; Daniel Keniston
  4. Innovation, Spillovers and Productivity Growth: A Dynamic Panel Data Approach By Christopher F Baum; Hans Lööf; Pardis Nabavi
  5. Causal relations between knowledge-intensive business services and regional employment growth By Brenner T.; Capasso M.; Duschl M.; Frenken K.; Treibich T.G.
  6. The Role of Spatial and Temporal Structure for Residential Rent Predictions By Fuess, Roland; Koller, Jan
  7. Commuting, Migration and Local Employment Elasticities By Ferdinando Monte; Stephen J. Redding; Esteban Rossi-Hansberg
  8. Downtown Parking Supply, Work-Trip Mode Choice and Urban Spatial Structure By Sofia F. Franco
  10. Harris and Wilson (1978) Model Revisited: The Spatial Period-doubling Cascade in an Urban Retail Model By Akamatsu, Takashi; Osawa, Minoru; Takayama, Yuki
  11. Nighttime lights revisited : the use of nighttime lights data as a proxy for economic variables By Addison,Douglas M.; Stewart,Benjamin P.
  12. Die Treiber der räumlichen Emergenz und Konzentration der Photovoltaik-Industrie in Deutschland By Breul, Moritz; Broekel, Tom; Brachert, Matthias

  1. By: enoch hill (university of minnesota); Fabrizio Perri (University of Minnesota); Alessandra Fogli (Minneapolis Federal Reserve Bank)
    Abstract: This paper uses micro-spatial data and develops a simple theory that explicitly includes a spatial dimension to better understand the start and the diffusion of business cycles. We first document how unemployment has diffused across US counties during recent recessions and find a recurring spatial pattern. Unemployment does not increase in all counties at the same time; at the start of the recession it increases in a few specific areas and then spreads from there to the rest of the country, following an epidemic pattern, i.e. increasing first in areas that are closer to areas of high unemployment. Our theory develops a stylized model of a country, composed by many locations, where each location is connected to its neighbors by explicit trade links. In particular we assume that each location produces a differentiated good which is demanded more heavily by locations which are nearby. Labor markets are segmented at the location level and in each location there can be unemployment due to sticky wages. We then model an aggregate shock as an event that affects, at the same time, the productivity or the demand (modeled as government demand for a good produced by a given location) of many different (random) locations. We have two main findings. The first is that our setup is able to account for the spatial pattern of business cycles we document in the data. The second is that the intensity of the local trade links is an important determinant of the amplification and propagation of the initial aggregate shock. If trade links are strong, small shocks tend to be muted and not persistent, while large shocks can be very disruptive. If trade links are weak, the opposite is true, small shocks
    Date: 2015
  2. By: Ruan, Jianqing; Zhang, Xiaobo
    Abstract: An industrial cluster is a locality with a high concentration of firms in related businesses. Although relatedness and concentration are the two defining features of an industrial cluster, the commonly used measures of clustering often fail to simultaneously capture both dimensions. Based on the product space literature, we first compute the degree of relatedness based on the concept of industrial proximity. Next, we develop a clustering index that takes into account both proximity and concentration. Finally, we calculate this new proximity-based index using the 1995 China Industrial Census and the 2004 and 2008 China Economic Census. The new index predicts China’s top 100 industrial clusters much more accurately than existing cluster measures.
    Keywords: economic development, industrial sector, industrial development, markets, regulations, economic policies, industrial clusters, proximity, concentration,
    Date: 2015
  3. By: Hunt Allcott; Daniel Keniston
    Abstract: Do natural resources benefit producer economies, or is there a "Natural Resource Curse," perhaps as Dutch Disease crowds out manufacturing? We combine new data on oil and gas abundance with Census of Manufactures microdata to estimate how oil and gas booms have affected local economies in the United States. Migration does not fully offset labor demand growth, so local wages rise. Notwithstanding, manufacturing is actually pro-cyclical with resource booms, driven by growth in upstream and locally traded sectors. The results highlight the importance of highly local demand for many manufacturers and underscore how natural resource linkages can drive manufacturing growth.
    JEL: J2 L6 O4 Q43 R1
    Date: 2015–11
  4. By: Christopher F Baum (Boston College; DIW Berlin); Hans Lööf (Royal Institute of Technology, Stockholm); Pardis Nabavi (Royal Institute of Technology, Stockholm)
    Abstract: This paper examines variations in productivity growth due to innovation within a given location and between different locations. Implementing a dynamic panel data approach on Swedish micro data, we test the sepa- rate and complementary effects of internal innovation efforts and spillovers from the local milieu. Measuring the potential knowledge spillover by ac- cess to knowledgeintensive services, the estimation results produce strong evidence of differences in the capacity to benefit from external knowledge among persistent innovators, temporary innovators and non-innovators. The results are consistent regardless of whether innovation efforts are measured in terms of the frequency of patent applications or the rate of R&D investment.
    Keywords: Innovation, spillovers, TFP growth, panel data
    JEL: C23 O31 O32
    Date: 2015–11–01
  5. By: Brenner T.; Capasso M.; Duschl M.; Frenken K.; Treibich T.G. (GSBE)
    Abstract: This paper studies the causal relations between regional employment growth in Knowledge-Intensive Business Services KIBS and overall regional employment growth using German labour-market data for the period 1999-2012. Adopting a recently developed technique, we are able to estimate a structural vector autoregressive model in which the causal directions between KIBS and other sectors are examined including various time lags. One main finding holds that although regional growth has a negative short-term effect on KIBS, KIBS growth has a long-term positive effect on the whole regional economy. This result confirms the claim that KIBS can play a key role in regional policies. Distinguishing between financial and non-financial KIBS, we find that financial KIBS have a procyclical effect on regional growth underlining the potential de-stabilizing effect of a large financial sector.
    Keywords: Forecasting and Prediction Methods; Simulation Methods ; Technological Change: Choices and Consequences; Diffusion Processes; General Regional Economics (includes Regional Data);
    JEL: C53 O33 R10
    Date: 2015
  6. By: Fuess, Roland; Koller, Jan
    Abstract: This paper examines the predictive power of five linear hedonic pricing models for the residential market with varying complexity in their spatial and temporal structure. In contrast to similar studies, we extend the out-of-sample forecast evaluation to one-day-ahead predictions with a rolling estimation window, which is a reasonable setting for many practical applications. We can show that in-sample fit and cross-validation prediction accuracy improve significantly when we account for spatial heterogeneity. In particular, for one-day-ahead forecasts, the spatiotemporal autoregressive (STAR) model demonstrates its superiority compared to model specifications with alternating spatial and temporal heterogeneity and dependence structures. In addition, sub-market fixed-effects, constructed on the basis of statistical TREE methods, further improve the results of predefined local rental markets.
    Keywords: Classification and Regression Tree (CART) Technique, Forecast Evaluation, Hedonic Pricing Model, Rental Prices, Spatiotemporal Autoregressive (STAR) Model
    JEL: C1 C2 R3
    Date: 2015–11
  7. By: Ferdinando Monte; Stephen J. Redding; Esteban Rossi-Hansberg
    Abstract: Many changes in the economic environment are local, including policy changes and infrastructure investments. The effect of these changes depends crucially on the ability of factors to move in response. Therefore a key object of interest for policy evaluation and design is the elasticity of local employment to these changes in the economic environment. We develop a quantitative general equilibrium model that incorporates spatial linkages between locations in goods markets (trade) and factor markets (commuting and migration). We find substantial heterogeneity across locations in local employment elasticities. We show that this heterogeneity can be well explained with theoretically motivated measures of commuting flows. Without taking into account this dependence, estimates of the local employment elasticity for one location are not generalizable to other locations. We also find that commuting flows and their importance cannot be accounted for with standard measures of size or wages at the county or commuting zone levels.
    Keywords: Commuting, migration and local employment elasticities
    JEL: F16 J6 J61 R0
    Date: 2015–11
  8. By: Sofia F. Franco
    Abstract: This paper examines the effects of changes in downtown parking supply on urban welfare, modal choice decisions and urban spatial structure using a spatial general equilibrium model of a closed monocentric city with two transport modes, endogenous residential parking and a form of bottleneck congestion at the CBD. Our analysis shows that parking reforms at the CBD that increase delay congestion costs in the short-run such as parking supply limits can be welfare improving if other commuting externalities such as air pollution can be reduced. In addition, because parking limits can also change location decisions such as where to live and invest they may complement anti-sprawl policies efforts by leading to a more compact urban spatial structure in the long run. We also show that changes in downtown parking supply can have different spatial impacts on the market supply of residential parking by affecting urban residents’ location decisions. Finally, we discuss the role of parking pricing as a complementary tool of congestion pricing to combat congestion in central areas and investigate whether the self-financing theorem of transportation economics holds within the context of our spatial urban model. JEL codes:
    Keywords: Downtown Parking, Bottleneck Congestion, Urban Form, Modal Choice
    Date: 2015
  9. By: Mikhailova, Tatiana
    Abstract: This paper studies the effect of forced labor relocation in GULAG, and the losses during the WWII on the long-term dynamics of city growth in the USSR. The main goal is to test whether the impact of Stalinist policies and the WWII on economic geography of the USSR persists in long run, and whether, in response to these policies, the long-term dynamics of the Soviet city growth shows evidence of multiple equilibria. I find that WWII does not have a statistically significant long-term effect on city growth, controlling for other factors, while GULAG system does. The growth of an average city in 1960s exhibits partial mean-reversion after the shocks of 1930s-1950s. The dynamics is consistent with multiple equilibria hypothesis: cities that received a lot of investment (as measured by the GULAG population) in the 1930s-1950s, have a higher chance not to revert to the previous trajectory, but to continue growing, while neglected cities are more likely to decline.
    Abstract: Эта статья изучает влияние принудительного труда в ГУЛАГе, переселения, и потерь во Второй мировой войне на долгосрочную динамику роста города в СССР. Основная цель заключается в проверке, сохранилось ли влияние сталинской политики и Второй мировой войны на экономическую географию СССР в долгосрочной перспективе, и показывала ли, в ответ на эти политики, долгосрочная динамика роста советского города свидетельство множественного равновесия , Я считаю, что Вторая мировая война не оказывает статистически значимого долгосрочного влияния на рост города, при учете других факторов, в то время как система ГУЛАГа - оказывает. Рост среднего города в 1960-е годы проявляет частичное возвращение к норме после потрясений 1930-1950. Динамика согласуется с гипотезы множественного равновесия: города, которые получили много инвестиций (измеренных в населении ГУЛАГа) в 1930-1950, имеют более высокий шанс не вернуться к прежней траектории, а продолжать расти, в то время как рост оставшихся в стороне городов, вероятно, снизится.
    Keywords: economic geography,cities,USSR,GULAG
    JEL: R11 R12 P25
    Date: 2015–02–06
  10. By: Akamatsu, Takashi; Osawa, Minoru; Takayama, Yuki
    Abstract: Harris and Wilson (1978)’s retail location model is one of the pioneering works in regional sciences on the combination of the “fast” and “slow” dynamic describing spatial pattern formation processes in the economic landscape, which is a current well-established modeling technique. Although proposed some time ago, the comparative static (bifurcation) properties of the model have not yet been sufficiently explored. We employ a simple analytical approach developed by Akamatsu et al. (2012) to reveal previously unknown bifurcation properties of the model in a space with a large number of locations. It is analytically shown that the evolutionary path of spatial structure exhibits a remarkable property, namely “spatial period- doubling cascade,” which we cannot observe in the popular two-location setup. We also discuss strong linkages between the model and the models of “new economic geography” regarding the modeling strategies and their bifurcation properties.
    Keywords: agglomeration, multiple agglomerations, stability, bifurcation, new economic geography model
    JEL: C62 F12 F15 R12 R13
    Date: 2015–11–19
  11. By: Addison,Douglas M.; Stewart,Benjamin P.
    Abstract: The growing availability of free or inexpensive satellite imagery has inspired many researchers to investigate the use of earth observation data for monitoring economic activity around the world. One of the most popular earth observation data sets is the so-called nighttime lights from the Defense Meteorological Satellite Program. Researchers have found positive correlations between nighttime lights and several economic variables. These correlations are based on data measured in levels, with a cross-section of observations within a single time period across countries or other geographic units. The findings suggest that nighttime lights could be used as a proxy for some economic variables, especially in areas or times where data are weak or unavailable. Yet, logic suggests that nighttime lights cannot serve as a good proxy for monitoring the within-in country growth rates all of these variables. Examples examined this paper include constant price gross domestic product, non-agricultural gross domestic product, manufacturing value added, and capital stocks, as well as electricity consumption, total population, and urban population. The study finds that the Defense Meteorological Satellite Program data are quite noisy and therefore the resulting growth elasticities of Defense Meteorological Satellite Program nighttime lights with respect to most of these socioeconomic variables are low, unstable over time, and generate little explanatory power. The one exception for which Defense Meteorological Satellite Program nighttime lights could serve as a proxy is electricity consumption, measured in 10-year intervals. It is hoped that improved data from the recently launched Suomi National Polar-Orbiting Partnership satellite will help expand or improve these outcomes. Testing this should be an important next step.
    Keywords: E-Business,Pro-Poor Growth,Economic Theory&Research,Economic Growth,Inequality
    Date: 2015–11–16
  12. By: Breul, Moritz; Broekel, Tom; Brachert, Matthias
    Abstract: Following the relatedness literature, we explore to what extent related industries influenced the regional emergence of the PV-industry. In addition, we shed light on factors explaining selective processes of clustering. We particularly argue that generic resources and resources of related activities have been crucial for the regional concentration in early phases of the industry life cycle. With increasing maturity, industry-specific resources became more important. Based on a unique dataset containing population dynamics of the German PV-industry, the hypotheses are tested empirically. Our results partially confirm the assumed beneficial effects of related industries for the emergence of the PV-industry. Moreover, we observe changes in the relative importance of factors supporting regional concentration, with industry-specific resources becoming dominant as the industry matures.
    Keywords: Photovoltaik Industrie, Entstehung, Konzentration, Clusterung, Deutschland
    JEL: O33 O38 R11
    Date: 2015

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