nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒05‒08
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Not too close, not too far: testing the Goldilocks principle of ‘optimal’ distance in innovation networks By Rune Dahl Fitjar; Franz Huber; Andrés Rodríguez-Pose
  2. Building the City: Sunk Capital, Sequencing and Institutional Frictions By J. Vernon Henderson; Tanner Regan; Anthony J. Venables
  3. Regional distribution of the national system of innovation actors and economic development: an international comparison By Ulisses Pereira dos Santos
  4. Quantitative Easing of an International Financial Centre: How Central London Came So Well Out of the Post-2007 Crisis By Ian Gordon
  5. Did Cheaper Flights Change the Direction of Science? By Christian Catalini; Christian Fons-Rosen; Patrick Gaulé
  6. New road infrastructure: the effects on firms By Gibbons, Steve; Lyytikainen, Teemu; Overman, Henry G; Sanchis-Guarner, Rosa
  7. When Regional Innovation Policies Meet Policy Rationales and Evidence: A Plea for Policy Analysis By Borrás, Susana; Jordana, Jacint
  8. Robust small area estimation under spatial non-stationarity By Baldermann, Claudia; Salvati, Nicola; Schmid, Timo
  9. Modelo Espacial Simples de uma Economia com Agentes: uma proposta metodológica By Bernardo Alves Furtado; Isaque Daniel Eberhardt

  1. By: Rune Dahl Fitjar; Franz Huber; Andrés Rodríguez-Pose
    Abstract: This paper analyses how the formation of collaboration networks affects firm-level innovation by applying the ‘Goldilocks principle’. The ‘Goldilocks principle’ of optimal distance in innovation networks postulates that the best firm-level innovation results are achieved when the partners involved in the network are located at the ‘right’ distance, i.e. ‘not too close and not too far’ from one another, across non-geographical proximity dimensions. This principle is tested on a survey of 542 Norwegian firms conducted in 2013, containing information about firm-level innovation activities and key innovation partners. The results of the ordinal logit regression analysis substantiate the Goldilocks principle, as the most innovative firms are found amongst those that collaborate with partners at medium levels of proximity for all non-geographical dimensions. The analysis also underscores the importance of the presence of a substitution-innovation mechanism, with geographical distance problems being compensated by proximity in other dimensions as a driver of innovation, whilst there is no support for a potential overlap-innovation mechanism.
    Keywords: Proximities, innovation, networks, collaboration, Goldilocks principle, Norway
    JEL: O31 O33 D85
    Date: 2016–05
  2. By: J. Vernon Henderson; Tanner Regan; Anthony J. Venables
    Abstract: This paper models a growing city, and focuses on investment decisions and consequent patterns of land use and urban density. We distinguish between formal and informal sector construction. The former can be built tall (at a cost), but structures once built are durable and cannot be modified. Investments are based on expectations about future growth of the city. In contrast, informal structures are malleable and do not involve sunk costs. As the city grows areas will initially be developed informally, and then formally; formal areas are redeveloped periodically. This process can be hindered by land right issues which raise the costs of converting informal to formal sector development. The size and shape of the city are sensitive to the expected returns to durable investments and to the costs of converting informal to formal sector usage. We take the model to data on the built environment for Nairobi, to study urban growth and change between 2004 and 2015 in a context where population is growing at about 4% a year. We study the evolution of building footprints and heights, development at the fringe, infilling, and redevelopment of the formal sector.
    Keywords: city, urban, urban growth, slum development, urban structure, urban form, housing investment, capital durability
    JEL: O14 O18 R1 R3
    Date: 2016–04
  3. By: Ulisses Pereira dos Santos (Cedeplar-UFMG)
    Abstract: It is believed that actors of the National System of Innovation (NSI) influence and are influenced by regional aspects, such as geographical distribution. Based on this perspective the scientific, technological and economical performances in sub-national divisions of nine developed and developing countries are analyzed in this paper. The aim is to evaluate the hypothesis on the existence of higher regional concentration of NSI actors in developing countries. The results suggest that this hypothesis may be correct, since science, technology and innovation activities are more likely to be regionally concentrated in the richest regions in the developing countries under consideration, contrary to that observed in developed countries.
    Keywords: National Systems of Innovation, Regional Development, Economic Development, Developing Countries.
    JEL: O10 O57 R58
    Date: 2016–03
  4. By: Ian Gordon
    Abstract: This paper documents and seeks to explain the remarkably positive employment trends of a central area of London in the years since the onset of the financial crisis. The volatility of this economy since the 1980s had suggested the likelihood of a sharp loss of jobs, maybe followed by a strong bounce-back, if the finance sector could overcome reputational damage from its role in the debacle of 2007-8. In fact this area proved both the most resilient in the downturn and the most dynamic in the upturn, accounting for all/most net job gains in the UK. This paper considers three types of explanation for this positive outcome - in terms of: fundamental economic strengths allowing it to keep going through generally tough times; an advantaged position in relation to elite choices about resource allocation and restructuring in the face of a general fiscal/commercial squeeze; and (less conventionally) the impact of massive support to/through the banking sector, in first mitigating impacts of the downturn for the financial centre, and then fuelling another global city boom. The last of these is argued to be key to understanding not only why central London has done so well since the crisis, but how it is still liable to be 'the capital of boom and bust'.
    Keywords: spatial imbalance, regional economic fluctuation, financial centre, monetary
    JEL: R11 R12 E58 E32
    Date: 2016–04
  5. By: Christian Catalini; Christian Fons-Rosen; Patrick Gaulé
    Abstract: We test how a reduction in travel cost affects the rate and direction of scientific research. Using a fine-grained, scientist-level dataset within chemistry (1991-2012), we find that after Southwest Airlines enters a new route, scientific collaboration increases by 50%, an effect that is magnified when weighting output by quality. The benefits from the lower fares, however, are not uniform across scientist types: younger scientists and scientists that are more productive than their local peers respond the most. Thus, cheaper flights, by reducing frictions otherwise induced by geography and allowing for additional face-to-face interactions, seem to enable better matches over distance.
    Keywords: scientific collaboration, air travel, temporary co-location, face-to-face meetings
    JEL: R4 L93
    Date: 2016–04
  6. By: Gibbons, Steve; Lyytikainen, Teemu; Overman, Henry G; Sanchis-Guarner, Rosa
    Abstract: This paper estimates the impact of new road infrastructure on employment and productivity using plant level longitudinal data for Britain. Exposure to transport improvements is measured through changes in accessibility, which is calculated at a detailed geographical scale from changes in minimum journey times along the road network. These changes are induced by the construction of new road link schemes. We deal with the potential endogeneity of scheme location by identifying the effects of changes in accessibility from variation across wards close to the scheme. We find substantial positive effects on employment and numbers of plants for small-scale geographical areas (electoral wards). In contrast, for firms already in the area we find negative effects on employment coupled with increases in output per worker and wages. A plausible interpretation is that new transport infrastructure attracts transport intensive firms to an area, but with some cost to employment in existing businesses.
    Keywords: accessibility; employment; productivity; transport
    JEL: D24 O18 R12
    Date: 2016–04
  7. By: Borrás, Susana (Copenhagen Business School); Jordana, Jacint (IBEI & Universitat Pompeu Fabra)
    Abstract: In spite of recent advancements regarding regional innovation policy rationales and evidence, there are few analyses about the actual features of existing regional innovation policies. Nevertheless, a policy analysis perspective is important in order to recognise their distinctive patterns across regions, and to understand how rationales and evidence can be translated into policy-making. To this purpose, this paper develops a framework to study the extent to which regional innovation policies have changed during the past few years. Since the mid-2000s there has been an important development of innovation policy rationales, advocating for more specialisation; likewise, greater data availability at the regional level has allowed more sophisticated assessment of innovation performance. Finally, the crisis since 2008 has had ravaging effects in some regions, with job losses and severe economic sluggishness. Therefore, it is reasonable to expect transforming dynamics in regional innovation policies. Against this backdrop, the paper compares the institutional frameworks and budgetary priorities of four Spanish regions during the period 2001-2014: Catalonia, the Basque country, Galicia, and Andalusia. In so doing, it aims at studying the extent to which regional governments have readily addressed past and new challenges related to their regional innovation system, and if so, how.
    Keywords: Catalonia; Basque country; Galicia; Andalusia; regional innovation system; smart specialisation; policy change; regional advantage; policy mixes; policy instruments; regulatory governance; Spain
    JEL: E61 O31 O38
    Date: 2016–04–19
  8. By: Baldermann, Claudia; Salvati, Nicola; Schmid, Timo
    Abstract: Geographically weighted small area methods have been studied in literature for small area estimation. Although these approaches are useful for the estimation of small area means efficiently under strict parametric assumptions, they can be very sensitive to outliers in the data. In this paper, we propose a robust extension of the geographically weighted empirical best linear unbiased predictor (GWEBLUP). In particular, we introduce robust projective and predictive small area estimators under spatial non-stationarity. Mean squared error estimation is performed by two different analytic approaches that account for the spatial structure in the data. The results from the model-based simulations indicate that the proposed approach may lead to gains in terms of efficiency. Finally, the methodology is demonstrated in an illustrative application for estimating the average total cash costs for farms in Australia.
    Keywords: bias correction,geographical weighted regression,mean squared error,model-based simulation,spatial statistics
    Date: 2016
  9. By: Bernardo Alves Furtado; Isaque Daniel Eberhardt
    Abstract: Este texto simula a evolução de economias artificiais no intuito de compreender a relevância tributária de limites administrativos na qualidade de vida de seus habitantes. A modelagem consiste na construção de algoritmo computacional cujo desenho contemple cidadãos, organizados em famílias, assim como firmas e governos que interagem nos mercados de bens, de trabalho e imobiliário. O mercado imobiliário permite que as famílias se mudem para domicílios com maior qualidade ou menor preço quando capitalizam a valorização dos terrenos. O mercado de bens comporta a busca do consumidor em número flexível de firmas, escolhendo por preço e proximidade. O mercado de trabalho é dado por processo de pareamento entre firmas (dada sua localização e o salário ofertado) e candidatos, de acordo com sua qualificação. O governo pode se configurar em uma região única ou em quatro ou sete governos subnacionais distintos, porém conurbados economicamente. O papel do governo é coletar impostos sobre o valor de venda das firmas no seu território e aplicá-los na melhoria da qualidade de vida dos habitantes. Este texto apresenta algumas ilustrações realizadas a partir de uma economia aleatória. Nessa configuração os limites administrativos parecem ser relevantes para os níveis de qualidade de vida advinda da inversão dos tributos. Nesse caso, o recorte com sete regiões é mais dinâmico, porém mais desigual e heterogêneo entre as regiões. O recorte com região única é homogeneamente mais pobre. O trabalho busca contribuir como referência metodológica para descrever, operacionalizar e testar modelos computacionais de análise de finanças públicas, com viés explicitamente espacial e dinâmico. Várias alternativas de expansão do modelo para objetos de pesquisa próximos são relatadas. This study simulates the evolution of artificial economies in order to understand the tax relevance of administrative boundaries in the quality of life of its citizens. The modeling involves the construction of a computational algorithm, which includes citizens, bounded into families; firms and governments; all of them interacting in markets for goods, labor and real estate. The real estate market allows families to move to households with higher quality or lower price when the families capitalize property values. The goods market allows consumers to search on a flexible number of firms choosing by price and proximity. The labor market entails a matching process between firms (given its location and offered wage) and candidates, according to their qualification. The government may mbe configured into a single region, or four or seven distinct sub-national governments, which are all economically conurbated. The role of government is to collect taxes on the value added of firms in its territory and transform the taxes into higher levels of quality of life for residents. As an illustration of the model the text suggests that the configuration of administrative boundaries is relevant to the levels of quality of life arising from the reversal of taxes. The model with seven regions is more dynamic, but more unequal and heterogeneous across regions. The simulation with only one region is more homogeneously poor. The study seeks to contribute to a theoretical and methodological framework and to describe, operationalize and test computer models of public finance analysis, with explicitly spatial and dynamic emphasis. Several alternatives of expansion of the model for future research are described.
    Date: 2016–03

This nep-geo issue is ©2016 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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