nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒02‒04
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Endogenous Infrastructure Development and Spatial Takeoff By Alex Trew
  2. On the sustainability of a monocentric city : lower transport costs from new transport facilities By Gokan, Toshitaka
  3. Spatial search strategies of job seekers and the role of unemployment insurance By Elisa Guglielminetti; Rafael Lalive; Philippe Ruh; Etienne Wasmer
  4. The Spatial Distributional Effect of Common Agricultural Policy Reform By O'Donoghue, Cathal; Grealis, Eoin; Loughrey, Jason; Donnellan, Trevor; Hanrahan, Kevin; Hennessy, Thia
  5. Financialisation of built environments:A literature review By Eric Clark; Henrik Gutzon Larsen; Anders Lund Hansen
  6. The Effect of Industrial Cluster Policy on Firm Performance in Ethiopia: Evidence from the Leather Footware Cluster By Getahun, Tigabu Degu
  7. Local and regional spatial interactions in the analysis of Norwegian farm growth By Storm, Hugo; Heckelei, Thomas
  8. Population Density, Fertility and Demographic Convergence in Developing Countries By David de la Croix; Paula E. Gobbi
  9. Spatial Concentration of Milk Production in Norway: The Flow of Quotas By Marton, Tibor
  10. Geographical Concentration of Soviet Industry: A Comparative Analysis By Kofanov, D.; Mikhailova, T.; Shurygin, A.
  11. Determinants of FDI Location in Egypt—Empirical Analysis Using Governorate Panel Data By Shima'a Hanafy

  1. By: Alex Trew (University of St Andrews)
    Abstract: Infrastructure development can affect the spatial distribution of economic activity and, by consequence, aggregate structural transformation and growth. The growth of trade and specialization of regions, in turn, affects the demand for infrastructure. This paper develops a model in which the evolution of the transport sector occurs alongside the growth in trade and output of agricultural and manufacturing firms. Simulation output captures aspects of the historical record of England and Wales over c.1710-1881. A number of counterfactuals demonstrate the role that the timing and spatial distribution of infrastructure development plays in determining the timing and pace of takeoff.
    Keywords: Industrial revolution, growth, transport, spatial development.
    JEL: H54 O11 O18 O33 N13 N93 R12
  2. By: Gokan, Toshitaka
    Abstract: This paper proposes a general equilibrium model of a monocentric city based on Fujita and Krugman (1995). Two rates of transport costs per distance and for the same good are introduced. The model assumes that lower transport costs are available at a few points on a line. These lower costs represent new transport facilities, such as high-speed motorways and railways. Findings is that new transport facilities connecting the city and hinterlands strengthen the lock-in effects, which describes whether a city remains where it is forever after being created. Furthermore, the effect intensifies with better agricultural technologies and a larger population in the economy. The relationship between indirect utility and population size has an inverted U-shape, even if new transport facilities are used. However, the population size that maximizes indirect utility is smaller than that found in Fujita and Krugman (1995).
    Keywords: Econometric model, Transportation, Urban societies, Urban system, Monopolistic competition, Transport facilities
    JEL: F12 O14 R12
    Date: 2016–01
  3. By: Elisa Guglielminetti (Département d'économie (ECON)); Rafael Lalive (University of Lausanne); Philippe Ruh (University of Zürich); Etienne Wasmer (Département d'économie)
    Abstract: Job search is a spatially oriented activity. Searching farther is costly, and working far away from home entails high costs, affecting job acceptance decisions. We build a simple theoretical framework where job seekers choose how much to search, how far to search, and what lowest wage they accept for a given commute distance. In this setup, unemployment insurance discourages broader job search through reducing the net gain from getting a job. Opposite forces encourage broader search, either through the re-entitlement effect or, under liquidity constraints, to finance costly spatial job search. We use a unique dataset on all workers entering unemployment in Austria between 1995 to 2004 to investigate these forces. We find that newly unemployed workers initially find relatively more frequently jobs in the same workplace as they used to be employed. As the unemployment spell gets longer, they both accept lower wages and progressively enlarge their radius of search, ending up with a job farther away from their previous workplace (but not necessarily farther away from their residence). Unemployment insurance reduces reservation wages at a given accepted commute distance, and encourages search outside the municipality of the previous job. Reducing potential benefit duration affects wages and commuting distance more strongly than changes in the benefit level.
    Keywords: Job search; Job seekers; Unemployment insurance
    Date: 2015–11
  4. By: O'Donoghue, Cathal; Grealis, Eoin; Loughrey, Jason; Donnellan, Trevor; Hanrahan, Kevin; Hennessy, Thia
    Abstract: Agricultural incomes are quite heterogeneous relying as they are in part on the environmental context which land is farmed. In addition a very significant proportion of agricultural income results from public policy via the Farm Direct Payments within in the Common Agricultural Policy. In this paper we develop and test a methodology to spatially model the distribution of Agricultural Activity and associated income across place utilising a spatial microsimulation model. In particular we build upon a quota sampling method used in the development household based spatial microsimulation models to account for spatial heterogeneity in relation to stocking rate. We utilise this framework to model the spatial distribution of activity, incomes and viability across Ireland. We also model the static spatial incidence of changes in the Common Agricultural Policy.
    Keywords: Agricultural and Food Policy,
    Date: 2015
  5. By: Eric Clark (Lund University, Department of Human Geography); Henrik Gutzon Larsen (Lund University, Department of Human Geography); Anders Lund Hansen (Lund University, Department of Human Geography)
    Abstract: This paper provides a review of research into financialisation of built environments, especially in relation to urban politics, social geographies and sustainability. Focus is limited here to the theoretical and conceptual substance of selected literature. Financialisation is conceptualised as a profoundly spatial process, forging social relations that form conditions for urban governance, social geographic change and urban sustainability. The paper frames financialisation of built environments as a process enmeshed with related processes of commodification, privatisation, neoliberalisation, and accumulation by dispossession, associated with the creation and appropriation of rent gaps. Land rent and rent gaps are highlighted as central to understanding financialisation of built environments. We then review research into relations between financialisation of built environments and urban governance, i.e. how financialisation impacts upon, while being facilitated or deterred by, urban politics. This sets the stage for reviewing research into relations between financialisation of built environments and observed patterns of change in the social geographies of cities, and research into the sustainability implications of financialisation of built environments. Conclusions reconsider the nature of the relationship between financialisation and urbanisation, and the challenges of bringing financial systems into the service of achieving social and natural sustainability.
    Keywords: financialisation, built environment, urban governance, land rent, sustainability
    JEL: D63 G19 O29 P16 Q01 R00 R58
    Date: 2015–09–01
  6. By: Getahun, Tigabu Degu
    Abstract: This paper empirically analyzes the productivity, profitability, innovation and network effects of a public policy promoting micro and small scale industrial clusters in Ethiopia. To this end, firm-level survey data was collected from randomly selected clustered leather shoe manufacturers that have directly benefited from the policy and those that do not, both before and after the cluster policy intervention. The results from econometric analysis suggests that the industrial cluster policy adversely impacts the productivity, profitability, growth, and innovation performance of the small and micro leather shoe manufacturing enterprises that moved to the government created clusters . The analysis of the transmission mechanism further reveals that the relocated cluster policy hampers the treated firms’ collaborative business and knowledge network and aggravates their growth impediments which includes lack of trust, high customer and supplier search and reach cost, lack of market information, imperfect contract enforcement, delays in the supply of raw materials and the lack of skilled labor. The time lag between policy implementation and its impacts may conceal the long-term impact of the cluster policy. The overwhelming majority of the representatives of treatment group firms also continue to believe that their buisness performance will improve over time as a result of their participation in the MSE cluster development program. This study is a pioneer to quantitatively evaluate the productivity, profitability, innovation and network effect of industrial cluster policy in Ethiopia.
    Keywords: Cluster Policy, Productivity, Profitability, Networks, Small and Micro Enterprises, Ethiopia, Institutional and Behavioral Economics, Production Economics, Research and Development/Tech Change/Emerging Technologies, Risk and Uncertainty, D02, D04, D25, D85, L11, L52, L67, O14,
    Date: 2016–01
  7. By: Storm, Hugo; Heckelei, Thomas
    Abstract: We analyse the importance of farm level spatial interaction for farm growth. We hypothesize that farms compete on local land markets and interact through knowledge transfer leading to positive and negative feedbacks, respectively. One of the main challenges in the analysis of farm level interaction is to distinguish between actual interactions from the effects of spatially correlated omitted variables. We approach this challenge be estimating a spatially lagged explanatory model (SLX) employing two spatial weighting matrix differentiating between a local and regional neighbourhood. Using a spatially explicit dataset for nearly all Norwegian farms in 1999 and 2009, we found that neighbouring effects differ substantially between local and regional neighbourhood. Our results indicate that the behaviour of directly neighbouring farms is indeed important for farm growth decisions.
    Keywords: farm growth, direct payments, land market, spatial competition, spatial interaction, Agricultural and Food Policy,
    Date: 2015
  8. By: David de la Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Paula E. Gobbi (National Fund for Scientific Research (FNRS) and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Whether the population tends towards a long-run stationary value depends on forces of demographic convergence. One such force is the result of fertility rates being negatively affected by population density. We test the existence of such an effect in 44 developing countries, matching georeferenced data from the Demographic and Health Surveys for half a million women with population density grids. When we correct for selection and endogeneity bias and control for the usual determinants of fertility such as education and income, a rise in density from 10 to 1000 inhabitants per square kilometer corresponds with a decrease in fertility of about 0.6 of a child. Duration analysis reveals that both age at marriage and age at first birth increase with density.
    Keywords: Demographic and Health Survey, Preventive check, Agglomeration externalities, Population Dynamics, Marriage
    JEL: J13 D19 O18 R11
    Date: 2016–01–18
  9. By: Marton, Tibor
    Abstract: This paper sets up several random effects spatial autoregressive panel data models with nested Translog production function with non-constant and non-neutral technological change to explain the variation of milk quantity with given stocks of capital, labor (hired and family) and feed production area as other limited productive resource. The aim of the paper is to discover the spatial spillovers in Norwegian milk production as a result of changing quota systems by introducing a spatially lagged variable of milk output. The paper examines three distinctive 5-year balanced panel data sets to account for the evolving milk quota system, such as: no quota, restrictive quota and transferable quota system. The paper also derives joint and conditional Lagrange Multiplier (LM) tests for detecting spatial error correlation (ρ), serial correlation (ψ) and random individual effects (µ) in panel models as well as Moran's I test for testing spatial dependence on panel variables. The tests help to avoid misspecifications of the spatial models. The outcome of the SAREM2SRRE model verified our hypothesis of increasing quota flows within the counties, since the spatial spillover parameters (λ) showed increasing trend under the distinguished dataframes. As a conclusion, the quota system gave rise to positive structural changes because it increased the spatial interdependence and spatial relations between Norwegian dairy farmers.
    Keywords: Agricultural and Food Policy,
    Date: 2015
  10. By: Kofanov, D. (Russian Presidential Academy of National Economy and Public Administration); Mikhailova, T. (Russian Presidential Academy of National Economy and Public Administration); Shurygin, A. (Russian Presidential Academy of National Economy and Public Administration)
    Abstract: In this paper we study the geographic concentration of industries in the Soviet Union. The distribution of economic activity in the geographical space of Russia - largely the result of long years of development of the Soviet system. Understand how and why different economic geography of Russia from the countries that have developed in a market economy, it is necessary to develop the right policy measures today. We look forward index of geographic concentration Dyurantona-Overman for manufacturing industries in the USSR in 1989 at the level of 2, 3 and 4-digit code, SIC. We then analyze the degree of geographical concentration of different industries and a comparative analysis with other countries. In general, the industrial sector in Russia / USSR weakly concentrated geographically. However, we conclude that the concentration of weak partly due to the geography of the country: the large distances between the centers of population and geographic dispersion of economic activity. However, the most significant difference from the late Soviet Union countries with a market economy - a weak concentration of high-tech industries, it is those who get the greatest benefit from the positive externalities of concentration.
    Keywords: industries, Soviet Union, geography
    Date: 2015–10–01
  11. By: Shima'a Hanafy (University of Marburg)
    Abstract: We empirically analyse the determinants of inward foreign direct investment (FDI) in Egypt employing a novel panel dataset of 26 Egyptian governorates for the period 1992–2008. Using the case of Arab FDI to Egypt, we also investigate whether FDI location determinants are different depending on similarity of culture and language between FDI source and host region. Our results indicate that domestic private investment, well-functioning Free Zones, and labour abundance positively affect FDI location. In contrast to results for other countries, we find no significant effect of concentration of previous FDI stocks on the location of inward FDI. Moreover, regional investment preferential policies in Egypt—with the exception of Free Zones—do not affect the unequal spatial FDI distribution. Finally, we find that the location of Arab FDI inflows to Egypt is not sensitive to the usual determinants. Arab investors are more willing to invest in less investment-agglomerated areas and are less affected by economic considerations and incentives.
    Keywords: Foreign direct investment, FDI location, agglomeration, cultural similarity, regional FDI, Arab countries
    JEL: F21 E22 R12 O53 Z10
    Date: 2015

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