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on Economic Geography |
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Issue of 2015‒12‒12
twelve papers chosen by Andreas Koch Institut für Angewandte Wirtschaftsforschung |
| By: | Rudiger Ahrend; Emily Farchy; Ioannis Kaplanis; Alexander C. Lembcke |
| Abstract: | This paper estimates agglomeration benefits across five OECD countries, and represents the first empirical analysis that combines evidence on agglomeration benefits and the productivity impact of metropolitan governance structures, while taking into account the potential sorting of individuals across cities. The comparability of results in a multi-country setting is supported through the use of a new internationally-harmonised definition of cities based on economic linkages rather than administrative boundaries. In line with the literature, the analysis confirms that city productivity increases with city size but finds that cities with fragmented governance structures tend to have lower levels of productivity. This effect is mitigated by the existence of a metropolitan governance body. |
| Keywords: | cities; productivity; governance; agglomeration economies |
| JEL: | H23 R12 R23 R50 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64619&r=geo |
| By: | Jordi Jofre-Monseny; Maria Sánchez-Vidal; Elisabet Viladecans-Marsal |
| Abstract: | This paper analyses the effects of large manufacturing plant closures on local employment. Specifically, we estimate the net employment effects of the closure of 45 large manufacturing plants in Spain, which relocated abroad between 2001 and 2006. We run differences-in-differences specifications in which locations that experience a closure are matched to locations with similar pre-treatment employment levels and trends. The results show that when a plant closes, for each job directly lost in the plant closure, between 0.3 and 0.6 jobs are actually lost in the local economy. The adjustment is concentrated in incumbent firms in the industry that suffered the closure, providing indirect evidence of labor market pooling effects. We find no employment effects in the rest of manufacturing industries or in the services sectors. These findings suggest that traditional input-output analyses tend to overstate the net employment losses of large plant closures. |
| Keywords: | local employment; plant closures; input-output; agglomeration economies |
| JEL: | J23 R12 R23 R58 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64621&r=geo |
| By: | Tony Champion; Ian Shuttleworth |
| Abstract: | This paper is prompted by the widespread acceptance that the rates of inter-county and inter-state migration have been falling in the USA and sets itself the task of examining whether this decline in migration intensities is also the case in the UK. It uses the inter-area migration matrices available for England and Wales from the National Health Service Central Register (NHSCR) which provides continuous monitoring since the 1970s by broad age group. The main methodological challenge, arising from changes in the geography of health areas for which the inter-area flows are given, is addressed by adopting the lowest common denominator of 80 areas. Care is also taken to allow for the effect of business cycles in producing short-term fluctuations on migration rates and to isolate the effect of a sharp rise in rates for 16-24 year olds in the 1990s, which is presumed to be related to the expansion of the university sector. The findings suggest that, unlike for the USA, there has not been a substantial decline in the intensity of internal migration between the first two decades of the study period and the second two. While there was a 3 per cent reduction in the overall rate of migration between the regions of England and Wales between 1975-1990 and 1996-2011 (omitting the 16-24s), the rate for within-region moves between areas was some 10 per cent higher in the latter period. The main evidence for decline relates to particular age groups of between-region migration, where the rate for those aged 65 and over shrank by a quarter and that for 0-15 year olds was down by a tenth. In general, however, if there has been any major decline in the intensity of address changing in England and Wales, it can only be for the shortest-distance (within area) moves that the NHSCR does not record. |
| Keywords: | internal migration; migration intensity; between-area moves; long-term trend; England and Wales |
| JEL: | J11 J61 O15 R23 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64617&r=geo |
| By: | Gabriel M. Ahlfeldt; Daniel P. McMillen |
| Abstract: | We analyze the determinants of building heights in Chicago by combining a micro-geographic data set on tall buildings with a unique panel of land prices covering 140 years. Consistent with the predictions of classic urban economics models, we find that developers respond to increasing land prices by increasing density, i.e. building taller. In 2000, the elasticity of height with respect of land price was about 45% for tall commercial buildings and 30% for tall residential buildings. As expected given significant improvement in construction technology over time, we find that the height elasticity approximately doubled over the last 100 years. We find evidence for dissipative height competition within cities, as excessively tall buildings are significantly less likely to be constructed near to each other than other buildings. Proximity to scenic amenities creates an extra incentive to outrival competitors, particularly in the residential market. |
| Keywords: | Chicago; density; height; land value; skyscraper |
| JEL: | R20 R30 |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64622&r=geo |
| By: | Riccardo Crescenzi; Marco Di Cataldo; Andrés Rodríguez-Pose |
| Abstract: | Transport infrastructure investment is a cornerstone of growth-promoting strategies. However, in the case of Europe the relevant literature is increasingly failing to find a clear link between infrastructure investment and economic performance. This may be a consequence of overlooking the role of government institutions. This paper assesses the connection between regional quality of government and the returns of different types of road infrastructure in EU regions during the period between 1995 and 2009. The results unveil a strong influence of regional quality of government on the economic returns of transport infrastructure. In weak institutional contexts, investments in motorways – the preferred option by local governments – yield significantly lower returns than the more humble but possibly more efficient secondary road. Government institutions also affect the returns of transport maintenance investment. |
| Keywords: | Transport infrastructure, Public capital investment, Economic growth, Institutions, Government quality, Regions, Europe. |
| JEL: | O43 R11 R40 R58 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:gov:wpaper:1508&r=geo |
| 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: | F22 J61 O18 O4 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64616&r=geo |
| By: | Cristina Cattaneo (FEEM and CMCC); Giovanni Peri (University of California, Davis) |
| Abstract: | Climate change, especially the warming trend experienced by several countries, could affect agricultural productivity. As a consequence, rural incomes 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 migration rates to urban areas and other countries in middle income economies. In poor countries, higher temperatures reduced the probability of migration to cities or to other countries, consistent 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. |
| Keywords: | Global Warming, Emigration, Rural-Urban Migration, Agricultural Productivity |
| JEL: | F22 Q54 O13 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.87&r=geo |
| By: | Antonescu, Daniela |
| Abstract: | During the last period, innovation represented the core topic of a wide number of studies and analyses due to the potential impact it could have on the development level of a country or a region. This aspect is relatively easy to explain: innovation represents an important source of regional/national competitiveness, a modern factor of growth and economic resilience, but also the fundamental objective of the current programming period and of the Europe 2020 Strategy. According to theory, innovation is a process that takes place predominantly at micro-economic level. Still, its approach at regional level gains increasingly more room within economic approaches starting from the premise that innovative performances of a company depend directly and to a large share on the endogenous local potential, but also on a combination of factors of influence, determined by the specifics and conditions of the area. The study intends to analyse from the theoretical and practical viewpoint the role of the innovation process within economic development and growth at regional and national level. |
| Keywords: | innovation, research, regional development, Strategy 2020, innovative region |
| JEL: | O3 O38 R1 R10 R12 R58 |
| Date: | 2015–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68178&r=geo |
| By: | Fabio Grazi (Agence Française de Développement, Research Directorate); Henri Waisman (Centre International de Recherche sur l’Environnement et le Développement) |
| Abstract: | This paper presents an integrated model of urban agglomeration economies within a computable general equilibrium (CGE) model of global economic activity, energy use and carbon emissions to explore the theoretical and empirical nature of the interdependence of cities and the world economy in a climate policy context. Based on calibration data for 74 major OECD agglomerations, the integrated model is used to gauge the long-term impact of: i) global carbon pricing on urban systems and the economic activity; ii) urban infrastructure development on the economic costs of curbing carbon emissions. Importantly, it is found that combining urban infrastructure and carbon pricing allows for stringent emissions reduction targets, while still avoiding the economic and welfare costs of the carbon price only. |
| Keywords: | Calibration, Cities, Hybrid Energy-Economy Modeling, New Economic Geography, Trade and Transport, Urban Infrastructure, Welfare |
| JEL: | C68 R12 Q54 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.61&r=geo |
| By: | Guillermo Garc\'ia-P\'erez; Mari\'an Bogu\~{n}\'a; Antoine Allard; M. \'Angeles Serrano |
| Abstract: | Here, we present the World Trade Atlas 1870-2013, a collection of annual world trade maps in which distances incorporate the different dimensions that affect international trade, beyond mere geography. The atlas provides us with information regarding the long-term evolution of the international trade system and demonstrates that, in terms of trade, the world is not flat, but hyperbolic. The departure from flatness has been increasing since World War I, meaning that differences in trade distances are growing and trade networks are becoming more hierarchical. Smaller-scale economies are moving away from other countries except for the largest economies; meanwhile those large economies are increasing their chances of becoming connected worldwide. At the same time, Preferential Trade Agreements do not fit in perfectly with natural communities within the trade space and have not necessarily reduced internal trade barriers. We discuss an interpretation in terms of globalization, hierarchization, and localization; three simultaneous forces that shape the international trade system. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1512.02233&r=geo |
| By: | Rui Dang |
| Abstract: | This paper is the first to estimate the causal effect of local human capital stock on individual adiposity and adds to the existing literature on estimating human capital externalities at the neighborhood level. We explore the possible causal pathways that college-educated neighbors exert on individual body weight, with the results revealing small yet significant human capital spillover effects. Among all adults, a percentage point increase in the neighborhood college graduates share results in a decrease of individual body mass index by 0.0026 log points, as well as a decrease of the individual likelihood of being overweight by 0.77 percentage points. Among high school graduates and college graduates, a percentage point increase in the neighborhood college graduates share results in a decrease of individual likelihood of being overweight by approximately 0.83 percentage points. |
| Keywords: | Obesity, local human capital externalities, control function, non-random sorting |
| JEL: | I00 R23 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp805&r=geo |
| By: | Antonios Garas; Celine Rozenblat; Frank Schweitzer |
| Abstract: | How are economic activities linked to geographic locations? To answer this question, we use a data-driven approach that builds on the information about location, ownership and economic activities of the world's 3,000 largest firms and their almost one million subsidiaries. From this information we generate a bipartite network of cities linked to economic activities. Analysing the structure of this network, we find striking similarities with nested networks observed in ecology, where links represent mutualistic interactions between species. This motivates us to apply ecological indicators to identify the unbalanced deployment of economic activities. Such deployment can lead to an over-representation of specific economic sectors in a given city, and poses a significant thread for the city's future especially in times when the over-represented activities face economic uncertainties. If we compare our analysis with external rankings about the quality of life in a city, we find that the nested structure of the city-firm network also reflects such information about the quality of life, which can usually be assessed only via dedicated survey-based indicators. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1512.02859&r=geo |