nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒02‒29
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Geography of Innovation and Entrepreneurship By Backman, Mikaela; Lööf, Hans
  3. Industry Clustering and Unemployment in US Regions: An Exploratory Note By Lambert, Thomas; Mattson, Gary; Dorriere, Kyle
  4. Uncovering Regional Clustering of high technology SMEs: Russian Case By Vera Barinova; Denis Burkov; Stepan Zemtsov; Vladimir Eremkin
  5. Regional Growth with Spatial Dependence: a Case Study on Early Italian Industrialization By Carlo Ciccarelli; Stefano Fachin
  6. Refined tests for spatial correlation By Peter M. Robinson; Francesca Rossi
  7. Strategic Entrepreneurship and Knowledge Spillovers: Spatial and Aspatial Perspectives By Tavassoli, Sam; Bengtsson, Lars; Karlsson , Charlie
  8. The Joint Influencing Mechanism of Proximities and Knowledge Base on Multinational Companies’ Global Innovation Networks By Liu , Ju; Liefner , Ingo
  9. The geography of the economic crisis in Europe: national macroeconomic conditions, regional structural factors and short-term economic performance. By Riccardo Crescenzi; Davide Luca; Simona Milio
  10. The Effect of Local Taxes on Firm Performance: Evidence from Geo-referenced Data By Federico Belotti; Edoardo Di Porto; Gianluca Santoni
  11. Does crisis affect convergence process? The case of the Spanish provinces By Montañés, Antonio; Olmos, Lorena; Reyes, Marcelo
  12. The impact of accessibility on labor earnings By Isacsson, Gunnar; Börjesson, Maria; Andersson, Matts; Anderstig, Christer
  13. Manufacturing Growth and Local Multipliers in China By Ting Wang
  14. Welfare measures to assess urban quality of life By Francesco Andreoli; Alessandra Michelangeli
  15. Institutional Thickness Revisited By Zukauskaite , Elena; Plechero , Monica; Trippl , Michaela

  1. By: Backman, Mikaela (Jönköping University, & Centre of Excellence for Science and Innovation Studies (CESIS)); Lööf, Hans (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
    Abstract: This introduction to the special issue “The Geography of Innovation and Entrepreneurship” in Annals of Regional Science surveys a collection of nine papers which consider agglomeration economies and spatial heterogeneity of regions and firms through the lenses of innovation and entrepreneurship. They all make use of extensive and detailed data sources that enable models to provide a richer picture of how firms, industries and regions are affected by innovation and entrepreneurship but also how these entities shape and foster renewal. These factors include spatial concentration, industry composition, labour market characteristics, immigration, firm characteristics, R&D activities and R&D collaboration. The papers add to the understanding of the geography of innovation and entrepreneurship by suggesting alternative ways of identifying spillovers, combing and integrating internal and external knowledge sources, and by estimating the impact on innovation, new firm formation and growth.
    Keywords: Innovation; entreprenurship; spillovers; regional economy; spatial heterogeneity
    JEL: C10 O30 R10
    Date: 2015–09–11
  2. By: Marusca De Castris (Roma Tre, University of Rome); Guido Pellegrini (Sapienza, University of Rome)
    Abstract: The existence of a “size” effect on unemployment, related to the dimension of regional labour market, is often attributed to the presence of agglomeration of people and firms. However, urban and industrial cluster agglomeration effects are theoretically and empirically different. In this paper, we propose to disentangle agglomeration effects due to high concentration of population and those due to firm’s clusters or high presence of employees, by controlling for a wide set of variables, basically related to sectorial and dimensional shocks and human capital, in order to highlight the total “size” effect in the labour market. We estimate the correlation between unemployment and agglomeration in UE27 at disaggregated territorial level (Nuts 2), conditioning for covariates related to demographic, economic and geographical effects. Moreover, regional labour markets are spatial correlated within contiguous areas: we carefully model the presence of spatial correlation by a spatial lag model. We expect that the size effect is lower in Europe than in USA. Nevertheless, effects related to agglomeration of firms could be higher than effects related to agglomeration of people. The results show that urban agglomeration in Europe has a negative effect on employment; the results are opposite for industrial clusters, where the presence of firm’s agglomeration has a positive effect on labour markets. These results suggest some policy implications. First of all, government should increase the circulation of labour market information in order to enhance the matching between job seekers and labour positions even in urban areas. Incentive for reducing the costs of search cannot obviously be limited to the case of contiguity between the supply and demand of skills, but also regards the acquisition of information and knowledge which often occurs through informal chains, less strong in urban centres. Improvements in the quality of the matching require policies able to disseminate information which can substitute those channels. It is important to reduce the costs of getting information in order to avoid the discouraging effect on job search activities.
    Keywords: agglomeration, urban density, industrial density, unemployment, European Union
    JEL: C21 E24 R12 R23
    Date: 2015
  3. By: Lambert, Thomas; Mattson, Gary; Dorriere, Kyle
    Abstract: Much has been written by various scholars and practitioners over the years about the benefits of industrial clustering, whether the clustering revolves around mature industries or around new and innovative industries (innovation clustering). The benefits of such clustering or local agglomeration economies supposedly include greater regional exports, greater employment growth, greater payroll growth, and greater new business establishment creation, among other impacts. However, the work for this research note has not uncovered much if any literature on how agglomeration affects United States regional unemployment rates. In general, greater clustering is associated with lower US metro area unemployment rates on average, although this depends upon how one defines a cluster. Additionally, most growing industrial and innovation clusters over the last two decades or so require highly educated and skilled workers. Since most of the unemployed at any given time tend to be less educated and less skilled than most workers on average, local and state economic development policies that focus on clustering must be careful in targeting lower unemployment rates as a policy goal or outcome. On the other hand, greater clustering and greater industry concentration do not seem to be associated with greater levels of unemployment during stagnant economic times as some may expect. That is, it does not appear that diversity of industry has an advantage over industry clustering and concentration in bad economic times. Finally, the arguments that decentralized or local economic development planning is better for the macroeconomy than centralized planning at the national level is discussed in light of the results for industrial clustering found in this paper.
    Keywords: agglomeration economies, economic development, industrial clustering, unemployment, and urban economics.
    JEL: R11 R3 R38
    Date: 2016–02–16
  4. By: Vera Barinova (Gaidar Institute for Economic Policy); Denis Burkov (RANEPA); Stepan Zemtsov (RANEPA); Vladimir Eremkin (RANEPA)
    Abstract: The Soviet Union predetermined Russia’s economic activity’s location patterns. While the main forms of industry organization were territorial production complexes (TPC) - networks of industrial organizations united by a single technological process, - switch to the market economy in the early 90s destroyed economic ties within the TPC, leading to fragmentation of large enterprises and formation of a number of independent firms. Some scientists believe that this situation over the last 20 years could serve as a necessary foundation for clusters’ formation. Nowadays interest in clusters in Russia is rekindled due to the need to find new support mechanisms for production and innovation in a stagnating economy. The Ministry of Economic Development of the Russian Federation has initiated a project to support pilot territorial innovation clusters with infrastructure formation funding. The aim of this work is to identify clusters as areas of geographical concentration of small and medium enterprises (SMEs) in high technology sector. Authors also try to check, whether existing cluster initiatives comply with the actual concentration of high-tech SMEs and whether there is any potential for new cluster initiatives. The present paper analysis exploits modified methodology, based on localization index. The study provides tables and maps, reflecting small and medium businesses concentration in Russian regions using evidence from high and medium-high technology industries. The authors empirically confirm the existence of traditional and well-known clusters and identify new concentrations of firms in Russia. This useful information can be used for policy advice.
    Keywords: cluster identification, localization, SME, Russian regions, industrial complex, territorial innovation cluster, innovation, high technology, innovative firms
    JEL: F34 G24 O18 O47 R11
    Date: 2016
  5. By: Carlo Ciccarelli (Department of Economics and Finance, University of Rome Tor Vergata); Stefano Fachin (Department of Statistics, Sapienza University of Rome)
    Abstract: The paper estimates a conditional ß-convergence model of labor productivity growth in Italy’s manufacturing industry during 1871-1911, accounting for spatial dependence. The empirical evidence is based on a recent set of data at provincial (NUTS 3) level on manufacturing value added at 1911 prices, and a new set of data on human and social capital, political participation, and infrastructures. By focusing on a country and a time when the agglomeration forces and spillover effects advocated by the new economic geography were only starting to operate, we can investigate a particularly interesting case study. Our results suggest that human capital, a cooperative culture, and initial productivity in neighboring provinces can explain much of the geographical variability of productivity growth in manufacturing in nineteenth-century Italy.
    Keywords: ß-convergence, manufacturing, nineteenth-century, Italy, spatial dependence, labor productivity, human capital
    JEL: R11 O47 N64
    Date: 2016–02
  6. By: Peter M. Robinson; Francesca Rossi
    Abstract: We consider testing the null hypothesis of no spatial correlation against the alternative of pure first order spatial autoregression. A test statistic based on the least squares estimate has good first-order asymptotic properties, but these may not be relevant in small- or moderate-sized samples, especially as (depending on properties of the spatial weight matrix) the usual parametric rate of convergence may not be attained. We thus develop tests with more accurate size properties, by means of Edgeworth expansions and the bootstrap. Although the least squares estimate is inconsistent for the correlation parameter, we show that under quite general conditions its probability limit has the correct sign, and that least squares testing is consistent; we also establish asymptotic local power properties. The finite-sample performance of our tests is compared with others in Monte Carlo simulations.
    JEL: J1
    Date: 2015–12
  7. By: Tavassoli, Sam (Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University); Bengtsson, Lars (Faculty of Engineering, Department of Industrial Management and Logistics, Lund University); Karlsson , Charlie (Centre of Excellence for Science and Innovation Studies (CESIS), Royal Institute of Technology (KTH), & Jönköping International Business School (JIBS))
    Abstract: The literature in the Strategic Entrepreneurship (SE) is increasingly embracing the concept and implication of knowledge spillovers. In this paper, we add to the theoretical literature on SE and knowledge spillovers by investigating the different types of knowledge spill-overs and what they imply for various dimensions of SE. On the one hand, we distinguish between spatial and aspatial knowledge spillovers. On the other hand, we distinguish be-tween various dimensions of SE, i.e. inputs, resource orchestration, and output. Finally, we conceptually link the various types of knowledge spillovers and dimensions of SE and dis-cuss the implications. Doing so, we argue that spatial knowledge spillovers (inter-firm) play the major role in increasing the amount of ‘inputs’ dimension of SE, while the aspatial knowledge (either inter-regional or intra-firm) play the major role not only for ‘inputs’, but also for ‘resource orchestration’ dimension. At the end, the paper provides suggestions for future research.
    Keywords: Strategic entrepreneurship; knowledge spillovers; spatial; aspatial
    JEL: D23 D83 L10 L26 R10
    Date: 2016–01–14
  8. By: Liu , Ju (CIRCLE, Lund University); Liefner , Ingo (Department of Economic Geography, Justus Liebig University Giessen)
    Abstract: This paper explores the joint influencing mechanism of the two-dimensional proximity, namely geographical and organisational proximity, and knowledge base on the relational pattern of multinational companies’ (MNCs) global innovation networks (GINs). It argues when it comes to MNCs’ GINs, the conventional geographical-proximity-and-knowledge-base framework allows only for an incomplete understanding of the network relational patterns and particularly the observed differences between different GINs. The paper suggests an extended theoretical framework based on a two-dimensional proximity concept and the knowledge base approach for understanding how and why MNCs’ GINs are organised in specifically different ways. An in-depth comparative case study with social network analysis is used to illustrate the applicability of the framework in question.
    Keywords: global innovation network; Multinational company; Knowledge base; Geographical proximity; Organisational proximity; Social network analysis
    JEL: F23 L60 M16 O32
    Date: 2016–01–18
  9. By: Riccardo Crescenzi; Davide Luca; Simona Milio
    Abstract: This paper explores the linkages between pre-2008 crisis national macro-economic conditions, regional resistance factors and depth of the crisis in the regions of the EU27. The results suggest that only a limited set of macro-economic factors shape the regional reaction to the crisis. A healthy current account surplus is associated with stronger economic performance during the post-2008 recession. Conversely, high public debt countries are more successful in sheltering their regional economies in the short-run. When looking at regional-level resistance, human capital is the single most important positive factor. Conversely, research and development-intensive regions are more exposed to negative shocks.
    Keywords: economic crisis; crisis consequences; European Union; regional resistance; spatial heterogeneity.
    JEL: E32 O52 P48 R11
    Date: 2016–01–11
  10. By: Federico Belotti (University of Rome Tor Vergata); Edoardo Di Porto (Università di Napoli Federico II, CSEF and UCFS, Uppsala University); Gianluca Santoni (CEPII)
    Abstract: This paper studies the impact of municipal non-residential property taxation on firms' performance using a panel data of italian manufacturing firms in 2001-2010. In the spirit of Duranton et al. (2011), we use a pairwise spatial difference instrumental variable estimator which allows to tackle the endogeneity of local taxation. As well as providing robust inference to arbitrary cross-sectional dependence and serial correlation, our empirical strategy also improves on existing work by exploiting the exogenous variation in local taxes generated by the political alignment of each jurisdiction with the central government. We find that non-residential property taxation exert a negative impact on firms' employment, capital and sales to such an extent as to significantly affect total factor productivity.
    Keywords: Local taxation, endogeneity, spatial differencing, generalized method of moments, two-way clustering
    JEL: H22 H71 R38
    Date: 2016–02–13
  11. By: Montañés, Antonio; Olmos, Lorena; Reyes, Marcelo
    Abstract: We study the possible existence of convergence across the Spanish provinces, paying special attention to the influence the recent international crisis has had on this process. To this end, we have taken the traditional per capita GDP as well as the multidimensional index of human development as a reference. Our results show that the convergence pattern has been clearly modified by the crisis; the differences are greater in 2014 than in 2007. Nevertheless, a greater effect of the crisis has not been observed on predominantly urban provinces, in contrast to what other authors have found in the case of Europe.
    Keywords: Convergence; Human Development Index; Urban provinces; Crisis
    JEL: C22 O47 R10
    Date: 2016–02
  12. By: Isacsson, Gunnar (Trafikverket); Börjesson, Maria (CTS); Andersson, Matts (WSP); Anderstig, Christer (WSP)
    Abstract: We estimate the impact of job accessibility on wage earnings using micro-level data including all workers in the greater Stockholm region at two points in time 11 years apart. We control for both zone-specific and individual-specific fixed effects by separating workers who have changed zone of residence and those who have stayed. The accessibility is derived from the national transport model, taking into account consumer behavior and preferences for all travel modes and travel time components. A novel instrumental variable based on the temporal changes in job accessibility resulting from transport system improvements over the 11 years is applied. The elasticity of accessibility defined from the worker’s place of residence is estimated at 0.007. The elasticity of wage earnings with respect to job accessibility at the work place is only significant for workers moving work place and for those estimated at 0.036.
    Keywords: Cost-Benefit Analysis; Accessibility; Agglomeration effects; Wider Economic Benefits
    JEL: R12 R41 R42 R48
    Date: 2016–01–25
  13. By: Ting Wang
    Abstract: In this paper, I study the impact of employment growth in manufacturing on employ- ment in the non-tradable sector for prefecture-level cities in China. Using the 2000 and 2010 Censuses of Population, I apply the shift-share approach to isolate the exogenous change of employment growth in manufacturing and investigate its impact on the non- tradable sector. I find that adding ten manufacturing jobs creates 3.4 additional jobs in the non-tradable sector. I also show that the effect is heterogeneous along a number of dimensions. More specifically, one new job in high-technology manufacturing creates more jobs in the non-tradable sector while low-technology manufacturing employment growth has no significant multiplier effect. Among the non-tradable industries, the multiplier is the largest for wholesale, retail, and catering. Finally, I find that the eect is also geographically heterogeneous, with the multiplier being greater for inland regions.
  14. By: Francesco Andreoli (Department of Economics (University of Verona)); Alessandra Michelangeli (University of Milano-Bicocca, DEMS, Piazza Ateneo Nuovo 1, Milan I-20126, Italy)
    Abstract: The standard index of urban quality of life provides an approximated value of the quality of life, since it associates the bundles of amenities observed in urban areas with their implicit marginal prices, and not with the prices of infra-marginal units. In this paper, we adjust the standard measure to determine the monetary value of any bundle, which might substantially differ from the bundle of the marginal quantities of amenities. Our methodology relies on a welfare measure that represents the individual willingness to give up (accept) to insure (forego) a change in the current distribution of amenities across areas will take place, keeping the level of utility unchanged. We obtain a new measure, the value-adjusted quality of life index, that can be identified from parametric models of consumer preferences. We use this index to measure the quality of life in the city of Milan.
    Keywords: Hedonic Models, Quality of Life, Structural models
    JEL: D6 H4 R1 R2
    Date: 2014–06
  15. By: Zukauskaite , Elena (CIRCLE, Lund University); Plechero , Monica (DEAMS, University of Trieste and CIRCLE, Lund University); Trippl , Michaela (CIRCLE, Lund University)
    Abstract: Over the last two decades, the notion of “institutional thickness” has become a key reference for a large body of work that has sought to provide profound insights into the link between institutions and regional development. However, only few attempts have been made to reassess the concept, to improve its methodology and to reflect upon its empirical application. The aim of this paper is to identify some crucial limitations of the theoretical and empirical work on institutional thickness and to sketch out elements of a strategy that could help to advance the debate on the notion. It is argued that much can by gained by (1) employing a clear analytical distinction between the organizational and institutional dimensions of thickness; (2) moving beyond overly static views on thickness; (3) developing a multi-scalar approach to thickness; and (4) acknowledging that thickness can only be assessed in relative terms.
    Keywords: institutional thickness; Institutions; Organizations; Multi-scalar analysis
    JEL: D29 O18 P48
    Date: 2016–01–18

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