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on Economic Geography |
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Issue of 2016‒04‒16
twelve papers chosen by Andreas Koch Institut für Angewandte Wirtschaftsforschung |
| By: | Inoue, Hiroyasu; Nakajima, Kentaro; Saito, Yukiko Umeno |
| Abstract: | This study investigates the localization of collaboration in knowledge creation by using the data on Japanese patent applications. Applying distance-based methods, we obtained the following results. First, collaborations are significantly localized at the 5% level with a localization range of approximately 100 km. Second, the localization of collaboration is observed in most technologies. Third, the extent of localization was stable from 1986–2005 despite extensive developments in information and communications technology that facilitate communication between remote organizations. Fourth, the extent of localization is substantially greater in inter-firm collaborations than in intra-firm collaborations. Furthermore, in inter-firm collaborations, the extent of localization is greater in collaborations with small firms. This result suggests that geographic proximity mitigates the firm-border effects in collaborations, especially for small firms. |
| Keywords: | Knowledge creation, Collaboration, Geographic frictions, Firm-border effects |
| JEL: | R12 O31 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hit:remfce:58&r=geo |
| By: | Ehrl, Philipp; Monteiro Monasterio, Leonardo |
| Abstract: | We exploit differences in the spatial distribution of industrial and liberal occupations in the years 1872 and 1920 to instrument for today's concentration of interpersonal and analytical skills in Brazil. The data suggest that the local supply of knowledge and manufacturing provided by these historical trades favored a growth path that has shaped the occupational structure until the present day, whereby the existence of a large local consumer market was a necessary condition for this development. By means of these instruments, we present causal evidence that the regional concentration of interpersonal and analytical skills generates positive wage externalities. Particularly university graduates and workers without formal education benefit most from these agglomeration economies. |
| Keywords: | agglomeration economies, skills, long-run industrial development, Brazil |
| JEL: | C26 J31 N16 R12 |
| Date: | 2016–04–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69829&r=geo |
| By: | Lionel Fontagné (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique) |
| Abstract: | A large portion of productivity differentials among locations is related to density. Firms located in denser areas are more productive due to agglomeration economies (Combes et al., 2012). We provide in this paper an explanation of such economies: lower input misallocation. The distribution of resources among heterogeneous firms has relevant consequences on allocative efficiency and denser areas provide a more favorable environment for dynamic matching between employers and employees. Using a methodology proposed by Petrin and Sivadasan (2013) we are able to assess the degree of resource misallocation among firms within sectors for each of the 96 French "Départements". Based on firm-level productivity estimates, we identify in the gap between the value of the marginal product and marginal input price the output loss due to inefficiencies in inputs allocation. Over the period 1993-2007 the average gap at firm level is around 10 thousands euro, showing a relevant increase starting from the early 2000s. Importantly, firms misallocations are lower in denser areas, suggesting that the matching mechanism is playing a role in explaining the productivity premium of agglomerated locations. |
| Keywords: | Misallocation, Productivity, Firm Level Data |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:hal-01299818&r=geo |
| By: | William Gbohoui (Sans nom); François Vaillancourt |
| Abstract: | To understand the role of subnational tax policies in explaining regional growth, we present stylized facts on U.S. state income and state-level tax policies. We use real Gross State Products (GSP) as the indicator of economic performance in contrast to the existing literature, which relies on Personal Income. The results reveal an increase in per capita income disparities, and time - persistent differences in human capital and physical capital between U.S. states. In addition, we find that subnational tax policies vary widely between states. Using augmented Barro regressions, we show that educational attainment, and state-level tax policies are the key determinants in explaining the differences between state-level economic growth. More precisely, higher corporate income or general sales taxes significantly retard economic growth, while human capital positively impacts state-level growth. |
| Keywords: | Regional growth, state and local taxation, |
| JEL: | H71 R11 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2016s-13&r=geo |
| By: | Keola, Souknilanh; Kumagai, Satoru |
| Abstract: | Ad-hoc population dynamics in Krugman’s type core and periphery models adjust population share of a region, based on its real wage rate deviation from national average, at pre-specified speed of population mobility. Whereas speed of population mobility is expected to be different across countries, for geographical, cultural, technological, etc. reasons, one common speed is often applied in theoretical and simulation analysis, due to spatially patchy, and temporally infrequent, availability of sub-national regional data. This article demonstrates how, increasingly available, high definition spatio-temporal remote-sensing data, and their by-products, can be used to measure speed of population mobility in national and sub-national level. |
| Keywords: | Southeast Asia, Population, Migration, Population movement, Regional data, Regional migration |
| JEL: | R10 R23 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper574&r=geo |
| By: | Matthias Firgo (WIFO); Peter Mayerhofer (WIFO) |
| Abstract: | Empirical results on the link between growth and diversity in (un-)related industries proved to be highly dependent on the specific regional and temporal context. Making use of highly disaggregated employment data at the sub-regional level, we find that higher employment growth in Austria is mainly linked to unrelated variety. However, in-depth analyses by sectors and regional regimes illustrate substantial heterogeneity in the results, mainly driven by the service sector and by a large number of relatively small regions. Thus, our results argue against structural policy conclusions based on assessments across all economic sectors or different types of regions. |
| Keywords: | related variety, specialisation, knowledge spillovers, employment growth, structural policy |
| Date: | 2016–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2016:i:511&r=geo |
| By: | Gong, Huiwen (Dept. of Geography, Kiel University); Hassink, Robert (Dept. of Geography, Kiel University) |
| Abstract: | The objective of this review paper is twofold: First, to review and synthesize the literature on the geographies of creative industries embedded in modern paradigms of economic geography; secondly, to reflect upon and identify a promising research agenda on the drivers of the geographical patterns of creative industries. Several deficiencies of current research are identified in this paper, and based on these deficiencies, we suggest some promising avenues for future research. In particular, we develop a comprehensive framework that goes beyond the analysis of individual drivers of the geographies of creative industries. |
| Keywords: | creative industries; geographical patterns; agglomeration economies; routine replication; institutional environment |
| JEL: | B52 L82 R11 R12 |
| Date: | 2016–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2016_009&r=geo |
| By: | Rappaport, Jordan (Federal Reserve Bank of Kansas City) |
| Abstract: | The monocentric city model is generalized to a fully structural form with leisure in utility, congested commuting, and the equalizing of utility and perimeter land price across metros. Exogenous and agglomerative differences in total factor productivity (TFP) drive differences in metro population, radius, land use, commute time, and home prices. Quantitative results approximate observed correspondences among these outcomes across U.S. metros. Traffic congestion proves the critical force constraining population. Self-driving cars significantly increase the sensitivity of metro population to productivity. Population becomes less responsive to increases in productivity as metros become larger. Correspondingly, the productivity “cost” of metro population—the TFP required to support a given population—increases convexly with size. Benchmark estimates suggest that agglomerative productivity suffices to support increases in population from low levels, allowing chance to play a significant role in determining which locations with sufficient exogenous TFP develop into small metros. But agglomerative productivity falls considerably short of supporting increases in population from high levels, suggesting that large metros arise from strong “fundamentals” such as high exogenous TFP. |
| Keywords: | City size; Commuting; Congestion; Land use; Metropolitan size; Self-driving cards; Time use |
| JEL: | J22 R12 R41 |
| Date: | 2016–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp16-03&r=geo |
| By: | Isono, Ikumo; Kumagai, Satoru; Hayakawa, Kazunobu; Keola, Souknilanh; Tsubota, Kenmei; Gokan, Toshitaka |
| Abstract: | The Geographical Simulation Model developed by IDE-JETRO (IDE-GSM) is a computer simulation model based on spatial economics. IDE-GSM enables us to predict the economic impacts of various trade and transport facilitation measures. Here, we mainly compare the prioritized projects of the Master Plan on ASEAN Connectivity (MPAC) and the Comprehensive Asia Development Plan (CADP). MPAC focus on specific hard or soft infrastructure projects that connect one ASEAN member state to another while the CADP emphasizes the importance of economic corridors or linkages between a large cluster and another cluster. As compared with MPAC projects, the simulation analysis shows that CADP projects have much larger positive impacts on ASEAN countries. |
| Keywords: | Asia, International economic integration, Regional economic cooperation, Economic geography, Spatial economics, Economic integration, ASEAN, Simulation analysis |
| JEL: | F15 O53 R12 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper567&r=geo |
| By: | Hayakawa, Kazunobu |
| Abstract: | Previous studies in the border-effect literature surprisingly found that domestic border effects are larger than international border effects (e.g., in the United States or Brazil). One interpretation of this result is that these estimates include the effects of producer agglomeration. Therefore, in this study, we estimate those border effects exclusively for transactions for final consumption, in which such agglomeration forces will be weak, in China and Japan. As a result, we found larger international border effects and could not find a significant role for producer agglomeration in the estimates of border effects. We also found that China's accession to the World Trade Organization reduces border effects in trading between China and Japan but does not decrease domestic border effects. |
| Keywords: | East Asia, China, Japan, International trade, Econometric model, Gravity, Border effects |
| JEL: | F15 F53 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper565&r=geo |
| By: | Cardoso-Vargas, Carlos-Enrique |
| Abstract: | This document examines whether the agglomeration of foreign processing firms (PCS) assembling imported inputs to make export products favors the incorporation to the export activity or market expansion of domestic companies. Similarly this situation is evaluated by considering ordinary foreign firms (ORD) or not manufactured processed products and non-local hybrid companies (HBR) that act in both regimes of commerce. The theoretical framework guiding the empirical evaluation is based on a simple model inspired by Melitz (2003), which is evaluated by means of a conditional logit model with panel data. The findings show evidence that the concentration of these types of foreign companies increases the probability that domestic companies show a presence in certain markets. Notwithstanding, these export spillovers widely heterogeneous in virtue of the fact that their existence and sphere of influence are associated with their specificity in terms of country or product, as well as with the regime of commerce and the technological capacity used by domestic companies vis-à-vis neighboring foreign companies. |
| Keywords: | international trade, agglomeration externalities, heterogeneity firms |
| JEL: | F13 F14 F21 |
| Date: | 2016–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70212&r=geo |
| By: | Beramendi, Pablo (Duke University); Stegmueller, Daniel (University of Mannheim) |
| Abstract: | Contrary to the expectations from currency unions theory and historical precedent, the EURO area has failed to integrate fiscally in response to the crisis. At the same time, however, significant horizontal transfers towards financial stabilization have taken place. What explains this co-existence of persistent reluctance by domestic leaders in core EU countries to pursue fiscal integration and large scale financial transfers between nations within the union? We analyze responses to the crisis as a result of the geography of income and production. Heterogeneity of constituencies’ redistribution preferences associated with a diverse economic geography accounts for the political constraints on national governments keeping them from furthering fiscal integration. In turn, cross-unit externalities in the form of potential financial risks shift the preferences of citizens potentially exposed to negative side-effects and open up the possibility of efforts towards international insurance/redistribution. The paper presents first an analytical framework to study these two mechanisms. Subsequently, we perform empirical analyses of the determinants of preferences for social insurance/redistribution, fiscal integration, and international redistribution in the aftermath of the Eurocrisis. |
| Keywords: | JEL Classification: |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cge:wacage:278&r=geo |