nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒04‒23
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Production Networks, Geography, and Firm Performance By Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
  2. Explaining regional inequality from the periphery: The mexican case, 1900-2000. By José Aguilar Retureta
  3. The Global Spatial Distribution of Economic Activity: Nature, History, and the Role of Trade By Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
  4. Estimating Border Effects: The Impact of Spatial Aggregation By Coughlin, Cletus C.; Novy, Dennis
  5. Determinants of Industrial Coagglomeration and Establishment-level Productivity By Fujii, Daisuke; Nakajima, Kentaro; Saito, Yukiko Umeno
  6. The Effect of Local Taxes on Firm Performance: Evidence from Geo-referenced Data By Federico Belotti; Edoardo Di Porto; Gianluca Santoni
  7. International technology transfer and domestic innovation: evidence from the high-speed rail sector in China By Yatang Lin; Yu Qin; Zhuan Xie
  8. Regional economic impact assessment with missing input-output data: a spatial econometrics approach for Poland By Andrzej Toroj
  9. Regional Human Capital and University Orientation: A case study on Spain By Sánchez-Barrioluengo, Mabel; Consoli, Davide
  10. Knowledge Creation and Dissemination by Local Public Technology Centers in Regional and Sectoral Innovation Systems: Insights from patent data By FUKUGAWA Nobuya
  11. “Relatedness, external linkages and innovation” By Ernest Miguélez; Rosina Moreno

  1. By: Andrew B. BERNARD; Andreas MOXNES; SAITO Yukiko
    Abstract: This paper examines the importance of buyer-supplier relationships, geography, and the structure of the production network in firm performance. We develop a simple model where firms can outsource tasks and search for suppliers in different locations. Low search and outsourcing costs lead firms to search more and find better suppliers. This in turn drives down firms' marginal production costs. We test the theory by exploiting the opening of a high-speed train line (shinkansen) in Japan which lowered the cost of passenger travel but left shipping costs unchanged. Using an exhaustive dataset on firms' buyer-seller linkages, we find significant improvements in firm performance as well as creation of new buyer-seller links, which are consistent with the model.
    Date: 2016–03
  2. By: José Aguilar Retureta (Universitat de Barcelona, Spain)
    Abstract: Economic Historians have paid close attention to the long term evolution of regional inequality. Nevertheless, so far research has largely focused on industrialised economies, neglecting to a large extent the experience of low- and middle-income countries. This paper aims to provide, using a new regional labour productivity database, evidence on the determinants of regional income inequality changes in Mexico from 1900 to the present. Different forces have driven regional inequality in each historical period. During the primary-export led-growth period of the first globalization (1900-1930) differences across regions in the intensity of structural change caused an increasing divergence. From 1930 to 1980, during the State-led Industrialisation, internal migrations contributed to a strong process of regional convergence in productivity, both in the within and the between-sector components of regional inequality. Finally, the increasing regional divergence that has taken place from 1980 onwards has been mainly an effect of the operation of labour productivity differentials within each sector.
    Keywords: Economic History, Economic Growth, Regional Income Inequality, Mexico.
    JEL: N16 N96 R11
    Date: 2016–03
  3. By: Vernon Henderson; Tim Squires; Adam Storeygard; David Weil
    Abstract: We study the distribution of economic activity, as proxied by lights at night, across 250,000 grid cells of average are 560 kilometers. We first document that nearly half of the variation can be explained by a parsimonious set of physical geography attributes. A full set of country indicators only explains a further 10%. When we divide geographic characteristics into two groups, those primarily important for agriculture and those primarily important for trade, we find that the agriculture variable have relatively more explanatory power in countries that developed early and the trade variable have relatively more in countries that developed late, despite the fact that the latter group of countries are far more dependent on agriculture today. We explain this apparent puzzle in a model in which two technological shocks occur, one increasing agricultural productivity and the other decreasing transportation costs, and in which agglomeration economies lead to persistence in urban locations. In countries that developed early, structural transformation due to rising agricultural productivity began at a time when transport costs were still relatively high, so urban agglomerations were localized in agricultural regions. When transport costs fell well before structural transformation. To exploit urban scale economies, manufacturing agglomerated in relatively few, often coastal, locations. With structural transformation, these initial coastal locations grew, without formation of more cities in the agricultural interior.
    Keywords: Agriculture, physical geography, development
    JEL: O13 O18 R12
  4. By: Coughlin, Cletus C.; Novy, Dennis
    Abstract: Trade data are typically reported at the level of regions or countries and are therefore aggregates across space. In this paper, we investigate the sensitivity of standard gravity estimation to spatial aggregation. We build a model in which initially symmetric micro regions are combined to form aggregated macro regions. We then apply the model to the large literature on border effects in domestic and international trade. Our theory shows that larger countries are systematically associated with smaller border effects. The reason is that due to spatial frictions, aggregation across space increases the relative cost of trading within borders. The cost of trading across borders therefore appears relatively smaller. This mechanism leads to border effect heterogeneity and is independent of multilateral resistance effects in general equilibrium. Even if no border frictions exist at the micro level, gravity estimation on aggregate data can still produce large border effects. We test our theory on domestic and international trade flows at the level of U.S. states. Our results confirm the model's predictions, with quantitatively large effects.
    Keywords: Borders; Geography; Gravity; Heterogeneity; Home Bias; Modifiable Areal Unit Problem (MAUP); Spatial Attenuation; Trade Costs
    JEL: F10 F15 R12
    Date: 2016–04
  5. By: Fujii, Daisuke; Nakajima, Kentaro; Saito, Yukiko Umeno
    Abstract: This paper investigates the relationships between determinants of industrial coagglomeration and establishment-level productivity. For each pair of industries, we first construct degree of coagglomeration and indices for three factors of coagglomeration: inter-firm transactions, knowledge spillover, and labor market pooling. We then examine correlation between these three factors and degree of coagglomeration. Overall, inter-firm transactions and labor market pooling are positively correlated with the degree of coagglomeration whereas knowledge spillover has no significant relationship with coagglomeration. We also find that determinants of coagglomeration are quite different across industries. Further, we examine relationships between these factors and establishment-level productivity. In the results, we find that determinants of coagglomeration are not necessarily positively associated with productivity of establishments.
    Keywords: coagglomeration, transaction costs, knowledge spillover, labor pooling
    JEL: R11
    Date: 2016–03
  6. By: Federico Belotti (CEIS,University of Rome "Tor Vergata"); Edoardo Di Porto (University of Naples Federico II, CSEF and UCFS Uppsala University); Gianluca Santoni (CEPII)
    Abstract: This paper investigates the impact of business property taxation on firms' performance using a panel of italian manufacturing firms. To account for endogeneity in local taxation, we exploit a pairwise spatial differenced generalized method of moments estimator. As well as providing robust inference, we also improve on existing work by exploiting the exogenous variation in local taxes generated by the political alignment of each local government with the central one. We find that property taxation exerts 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, two-way clustering.
    JEL: H22 H71 R38
    Date: 2016–04–13
  7. By: Yatang Lin; Yu Qin; Zhuan Xie
    Abstract: How does the transfer of advanced technology spur innovation in developing countries? This paper exploits the large-scale introduction of high-speed railway (HSR) technology into China in 2004 as a natural experiment to address this question. The experiment is unique in the sense that this wave of technology transfer is large, abrupt and arguably exogenous in timing, covering a variety of technology classes and a large number of geographically-dispersed railway-related firms. With detailed information on the types of technology transferred and the identities of the receiving firms, as well as their product market specializations, we are able to depict a clear picture of how foreign technology is digested and spurs follow up innovation in and out of directly receiving firms. Our findings suggest that technology transfer leads to significant growth in HSR-related patents in cities with direct receivers of imported technology after 2004 in a triple-difference estimation. We also observe sizable spill overs to firms that are not directly related to the railway industry. Technology similarity plays an important role in technology diffusion, but we do not observe any significant impacts of geographic proximity. Previous university research strength in relevant fields is also conducive to stronger technology spill overs.
    Keywords: Innovation; foreign technology transfer; knowledge spill over; China
    JEL: J1
    Date: 2015–12
  8. By: Andrzej Toroj
    Abstract: We propose a novel method of constructing multisector-multiregion input-output tables, based on the standard multisector tables and the tools of spatial econometrics. Voivodship-level (NUTS-2) and subregion-level data (NUTS-3) on sectoral value added is used to fit a spatial model, based on a modication of the Durbin model. The structural coefficients are calibrated, based on I-O multipliers, while the spatial weight matrices are estimated as parsimoniously parametrised functions of physical distance and limited supply in certain regions. We incorporate additional restrictions to derive proportions in which every cross-sectoral ow should be interpolated into cross-regional ow matrix. All calculations are based on publicly available data. The method is illustrated with an example of regional economic impact assessment for a generic construction company located in Eastern Poland.
    Keywords: input-output model, spatial econometrics, Durbin model, multiregion analysis, regional economic impact assessment
    JEL: C21 C31 C67 D57 R12 R15
    Date: 2016–03
  9. By: Sánchez-Barrioluengo, Mabel; Consoli, Davide
    Abstract: This paper explores the relationship between regional human capital (HC) and the processes of knowledge creation and mobilization due to Higher Education Institutions (HEIs). Although the nexus between these dimensions emerges frequently in both the scholarly and policy discourses, no study has so far investigated explicitly how their connection works. Using occupations as a proxy for the skill content of jobs, we analyse individual (gender, schooling and age) and regional (university orientation) factors that influence HC employment structure in Spanish regions over the period 2003-2010. The main finding is that teaching university mission is a robust predictor of high-skill employment, while the impact of engagement (research and knowledge transfer) activities is more sensitive to structural characteristics of the regional socio-economic context.
    Keywords: Human Capital, University Orientation, Skills, Region
    JEL: J24
    Date: 2016–04–11
  10. By: FUKUGAWA Nobuya
    Abstract: Local public technology centers (LPTCs) in Japan help small- and medium-sized enterprises (SMEs) improve productivity through technology transfer. Using a comprehensive patent database and based on frameworks of regional and sector innovation systems, this study quantitatively evaluates LPTCs' technology transfer activities. The key findings can be summarized as follows. First, local SMEs' technological portfolios (the distribution of patents across technological fields) indicate a better fit with the technological portfolios of LPTCs than with those of local universities. This tendency is salient for manufacturing LPTCs. Second, LPTCs collaborate more intensively on research with local SMEs compared to the local universities. This tendency is also salient for manufacturing LPTCs. Third, in regions where SMEs' technological portfolios are concentrated in biotechnology, LPTCs engage more in licensing. In regions where SMEs' technological portfolios are concentrated in mechanical engineering, LPTCs engage more in technical consultation.
    Date: 2016–03
  11. By: Ernest Miguélez (GREThA, University of Bordeaux & AQR-IREA, University of Barcelona.); Rosina Moreno (AQR-IREA, University of Barcelona.)
    Abstract: This paper has two main objectives. First, it estimates the impact of related and unrelated variety of European regions’ knowledge structure on their patenting activity. Second, it looks at the role of technological relatedness and extra-local knowledge acquisitions for local innovative activity. Specifically, it assesses how external technological relatedness affects regional innovation performance. Results confirm the strong relevance of related variety for regional innovation; whereas the impact of unrelated variety seems relevant only for the generation of breakthrough innovations. The study also shows that external knowledge flows have a higher impact, the higher the similarity between these flows and the extant local knowledge base.
    Keywords: variety, patents, patent citations, relatedness, knowledge production function JEL classification: O18, O31, O33, R11
    Date: 2016–04
  12. By: Ivan Muñiz Olivera (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Vania Sánchez Trujillo (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: The research adresses the relation between proximity to employment and commuting distance for the case of Mexico City. Two mechanisms can reduce commuting distance associated to changes in proximity to employment: co-location (a more balanced relation between workers and employment at a local level) reduces the number of external commuters, and b) a decrease in external commuting distance since external commuters go to a periferic employment subcenter closer that the main CBD. Our results indicate that the decrase in commuting distances is only explained by co-location, questioning the positive effect of polycentrism in terms of mobility.
    Date: 2016–04

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