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on Economic Geography |
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Issue of 2015‒12‒28
twelve papers chosen by Andreas Koch Institut für Angewandte Wirtschaftsforschung |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Holger Graf (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Susanne Hinzmann (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | The role of geographical proximity in fostering connections and knowledge flows between innovative actors ranks among the most controversial themes in the research of innovation systems, regional networks and new economic geography. While there is ample empirical evidence on the constituent force of co-location for the formation of research alliances, little attention has been paid to the actual consequences of geographical concentration of alliance partners for the subsequent performance of these linkages. In this paper we address this underexplored issue and aim to complement the rare examples of studies on the relevance of geographical proximity for research outputs. We utilize original and unique survey data from collaborative R&D projects that were funded within the "Leading-Edge Cluster Competition" - the main national cluster funding program in Germany in recent years. We find that the perception of the necessity of spatial proximity for project success is rather heterogeneous among the respondents of the funded projects. Moreover, the relationship between geographical distance and project success is by no means univocal and is mediated by various technological, organizational and institutional aspects. Our findings strongly support the assumption that the nature of knowledge involved determines the degree to which collaborators are reliant on being closely located to each other. The relevance of spatial proximity increases in exploration contexts when knowledge is novel and the innovation endeavor is more radical while this effect is less pronounced for projects with a stronger focus on basic research. Moreover, geographical proximity and project satisfaction foster cross- fertilization effects of LECC projects. |
| Keywords: | geographical proximity, collaboration, performance, innovation policy |
| JEL: | O3 O38 L14 R1 |
| Date: | 2015–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2015-025&r=geo |
| By: | Edward L. Glaeser; Scott Duke Kominers; Michael Luca; Nikhil Naik |
| Abstract: | New, “big” data sources allow measurement of city characteristics and outcome variables higher frequencies and finer geographic scales than ever before. However, big data will not solve large urban social science questions on its own. Big data has the most value for the study of cities when it allows measurement of the previously opaque, or when it can be coupled with exogenous shocks to people or place. We describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities. We first show how Google Street View images can be used to predict income in New York City, suggesting that similar image data can be used to map wealth and poverty in previously unmeasured areas of the developing world. We then discuss how survey techniques can be improved to better measure willingness to pay for urban amenities. Finally, we explain how Internet data is being used to improve the quality of city services. |
| JEL: | C18 C80 C83 R10 R11 R23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21778&r=geo |
| 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. |
| JEL: | F16 J6 J61 R0 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21706&r=geo |
| By: | Edward L. Glaeser; Giacomo A. M. Ponzetto; Yimei Zou |
| Abstract: | Should China build mega-cities or a network of linked middle-sized metropolises? Can Europe’s mid-sized cities compete with global agglomeration by forging stronger inter-urban links? This paper examines these questions within a model of recombinant growth and endogenous local amenities. Three primary factors determine the trade-off between networks and big cities: local returns to scale in innovation, the elasticity of housing supply, and the importance of local amenities. Even if there are global increasing returns, the returns to local scale in innovation may be decreasing, and that makes networks more appealing than mega-cities. Inelastic housing supply makes it harder to supply more space in dense confines, which perhaps explains why networks are more popular in regulated Europe than in the American Sunbelt. Larger cities can dominate networks because of amenities, as long as the benefits of scale overwhelm the downsides of density. In our framework, the skilled are more likely to prefer mega-cities than the less skilled, and the long-run benefits of either mega-cities or networks may be quite different from the short-run benefits. |
| JEL: | F15 O18 R10 R58 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21794&r=geo |
| By: | Pablo D. Fajgelbaum; Eduardo Morales; Juan Carlos Suárez Serrato; Owen M. Zidar |
| Abstract: | We study state taxes as a potential source of spatial misallocation in the United States. We build a spatial general-equilibrium model in which the distribution of workers, firms, and trade flows across states responds to state taxes and public-service provision. We estimate firm and worker mobility elasticities and preferences for public services using data on the distribution of economic activity and state taxes from 1980 to 2010. A revenue-neutral tax harmonization leads to aggregate real-GDP and welfare gains of 0.7%. Tax cuts by individual states lower own-state tax revenues and economic activity, and generate cross-state spillovers depending on trade linkages. |
| JEL: | E6 F12 H71 R13 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21760&r=geo |
| By: | Lena Edlund; Cecilia Machado; Maria Micaela Sviatschi |
| Abstract: | In 1980, housing prices in the main US cities rose with distance to the city center. By 2010, that relationship had reversed. We propose that this development can be traced to greater labor supply of high-income households through reduced tolerance for commuting. In a tract-level data set covering the 27 largest US cities, years 1980-2010, we employ a city-level Bartik demand shifter for skilled labor and find support for our hypothesis: full-time skilled workers favor proximity to the city center and their increased presence can account for the observed price changes, notably the rising price premium commanded by centrality. |
| JEL: | R21 R30 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21729&r=geo |
| By: | Thomas Brenner (Department of Geography, Philipps Universitaet Marburg); Marco Capasso (School of Business and Economics, Maastricht University); Matthias Duschl (Department of Geography, Philipps Universitaet Marburg); Koen Frenken (Copernicus Institute, Utrecht University and CIRCLE, Lund University); Tania Treibich (School of Business and Economics, Maastricht University and OFCE and Scuola Superiore Sant'Anna) |
| 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 auto- regressive 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 posi- tive 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: | Employment Growth, growth spillovers, KIBS, industrial dynamics, financial geography |
| JEL: | C53 O33 R10 |
| Date: | 2015–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2015-04&r=geo |
| By: | Cem Ertur (University of Orleans UMR 6221, CNRS Faculté de Droit d’Economie et de Gestion. Rue de Blois - B.P. 6739 45067 Orléans Cedex 2,France); Antonio Musolesi (Department of Economics and Management (DEM), University of Ferrara, and SEEDS, Via Voltapaletto 11, 44100 Ferrara - Italy.) |
| Abstract: | This paper provides an econometric examination of geographic R&D spillovers among countries by focusing on the issue of cross-sectional dependence, and in particular on the different ways – weak and strong – it may affect the model. A preliminary analysis based on the estimation of the exponent of cross-sectional correlation proposed by Bailey et al.(2013), a, provides a very clear-cut result with an estimate of a very close to unity, not only indicating the presence of strong cross-sectional correlation but also being consistent with the factor literature typically assuming that a = 1. Moreover, second generation unit roots tests suggest that while the unobserved idiosyncratic component of the variables under study may be stationary, the unobserved common factors appear to be nonstationary. Consequently, a factor structure appears to be preferable to a spatial error model and in particular the Correlated Common Effects approach is employed since, among other things, it is still valid in the more general case of nonstationary common factors. Finally, comparing the results with those obtained with a spatial model gives some insights on the possible bias occurring when allowing only for weak correlation while strong correlation is present in the data. |
| Keywords: | panel data; cross-sectional correlation; spatial models; factor models; unit root; international technology diffusion; geography. |
| JEL: | C23 C5 F0 O3 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:srt:wpaper:1915&r=geo |
| By: | Luigi Guiso; Luigi Pistaferri; Fabiano Schivardi |
| Abstract: | We document that individuals who grew up in areas with high density of firms are more likely, as adults, to become entrepreneurs, controlling for the density of firms in their current location. Conditional on becoming entrepreneurs, the same individuals are also more likely to be successful entrepreneurs, as measured by business income or firm productivity. Strikingly, firm density at entrepreneur’s young age is more important than current firm density for business performance. These results are not driven by better access to external finance or intergenerational occupation choices. They are instead consistent with entrepreneurial capabilities being at least partly learnable through social contacts. In keeping with this interpretation, we find that entrepreneurs who at the age of 18 lived in areas with a higher firm density tend to adopt better managerial practices (enhancing productivity) later in life. |
| JEL: | J24 M13 R11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21775&r=geo |
| By: | Tobias Ebert (Philipps-University of Marburg, Economic Geography and Location Analysis, Deutschhausstrasse 10, 35032 Marburg, Germany); Thomas Brenner (Philipps-University of Marburg, Economic Geography and Location Analysis, Deutschhausstrasse 10, 35032 Marburg, Germany); Udo Brixy (Institute of Employment Research (IAB), Nuremberg, Germany and Department of Geography, Ludwig-Maximilians University, Munich, Germany) |
| Abstract: | This paper provides evidence that the effect of agglomeration externalities on survival is moderated by the start-up’s innovative behavior. It is shown that localization externalities are prevalent particularly in non-high-tech environments and unfold a positive influence on survival for less innovative companies, while their highly innovative counterparts do not benefit or even suffer from spatial concentration. On the contrary, highly innovative high-tech start-ups benefit from a diverse economic structure which enhances their likelihood for survival by fostering the emergence of beneficial inter-industry spill-overs. |
| Keywords: | Firm survival, Innovation, Externalities |
| JEL: | D22 L26 O33 R11 |
| Date: | 2015–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pum:wpaper:2015-05&r=geo |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena, and University of Southern Denmark, Odense); Holger Graf (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Stefan Töpfer (School of Economics and Business Administration, Friedrich-Schiller-University Jena) |
| Abstract: | We study the effects of a German national cluster policy on the structure of collaboration networks. The empirical analysis is based on original data that was collected in fall 2011 and late summer 2013 with cluster actors (firms and public research organizations) who received government funding. Our results show that over time the program was effective in initiating new cooperation between cluster actors and in intensifying existing linkages. Newly formed linkages are to a substantial amount among actors who did not receive direct funding for a joint R&D project, which indicates an additional, mobilisation effect of the policy. Furthermore, we observe differential developments regarding clusters' spatial embeddedness. Some clusters tend to increase their localisation, whereas others increase their connectivity to international partners. The centrality of large firms increased over time, indicating their prominent role as preferred partners for R&D cooperation within the clusters while it is the opposite case for public actors. |
| Keywords: | Cluster, Innovation Policy, Evaluation, Social Network Analysis |
| JEL: | O38 L14 R10 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2015-026&r=geo |
| By: | OKUBO Toshihiro; OKAZAKI Tetsuji |
| Abstract: | In 2001, the Ministry of Economy, Trade and Industry (METI) launched the Industrial Cluster Policy, which aimed at promoting innovations and vitalizing regional economies by creating firm networks. The model envisioned by METI in drawing up this policy was the Silicon Valley in the United States. For that purpose, METI designated 19 industrial clusters and their members, including local small and medium-sized firms and universities, and supported the network creation of the members. In this paper, we identified the member firms from the original information provided by METI and matched it with the Tokyo Shoko Research (TSR) database. We used the dataset to evaluate how participation in the industrial cluster affected the transaction network, sales, and employment of each member firm.It was revealed that participation in the industrial cluster has a positive impact on the extent of transaction networks, especially that with firms in Tokyo. Also, participation in the industrial cluster increases the sales and employment of each member firm. It is remarkable that the cluster policy contributes to expanding the extensive margin of the local firms with transactions with firms in Tokyo. This extensive margin effect is larger for firms whose main banks are the first-tier regional banks. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:15063&r=geo |