nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒06‒09
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. A new indicator for innovation clusters By Christopoulos, George; Wintjes, René
  3. Academic Knowledge Spillovers and the Role of Geographic Proximity in Regional Agriculture-related Sectors: The impact of agricultural research at Colorado State University on the Colorado economy, and beyond By Lee, Yoo Hwan; Graff, Gregory D.
  4. Agglomeration and innovation By Carlino, Gerald; Kerr, William R.
  5. Creating an environment for economic growth: creativity, entrepreneurship or human capital? By Faggian, Alessandra; Partridge, Mark; Malecki, Ed
  6. Knowledge shocks diffusion and the resilience of regional inequality By Lopez-Cermeño, Alexandra
  7. Public Transportation and Industrial Location Patterns in California By Chatman , Daniel; Xu, Ruoying; Park , Janice; Le, Kim
  8. Tie creation versus tie persistence in cluster knowledge networks By Sándor Juhász; Balázs Lengyel
  9. Compilation of a regionally-extended inter-country input-output table and its application to global value chain analysis By Meng, Bo; Yamano, Norihiko; Inomata, Satoshi; Xiao, Hao; Wang, Jianguo
  10. Racial and spatial interaction for neighborhood dynamics in Chicago By Alejandro Badel; Carlos Castro; Cristhian Rodriguez
  11. Knowledge-Based Regional Development in Albania and Kosovo - Reducing social and economic disparities through social and economic innovation By Blerjana Bino; Ketrina Çabiri; Erjon Curraj; Alban Hashani; Ilire Mehmeti
  12. Economic concentration and finance: Evidence from Russian regions By Hattendorff, Christian
  13. Spatial Autoregressive Conditional Heteroscedasticity Model and Its Application By Takaki Sato; Yasumasa Matsuda
  14. Gains de productivité statiques et d'apprentissage induits par les phénomènes d'agglomération au sein du Grand Paris By Combes, Pierre-Philippe; Gobillon, Laurent; Lafourcade, Miren

  1. By: Christopoulos, George (UNU‐MERIT, Maastricht University); Wintjes, René (UNU‐MERIT, Maastricht University)
    Abstract: This paper introduces a new approach for the definition of innovation clusters, based on the co-location of concentrated patenting and manufacturing activity in the EU. The incorporation of data on both the production and use of technologies results in an indicator that depicts both formal and informal modes of innovation and conditions which can be expected to be conducive to the generation, diffusion and absorption of innovation, and consequently the enhancement of competitiveness. Our findings indicate that certain types of patenting and manufacturing activity tend to co-locate. The sectoral-technological composition of the three types of concentrations observed points towards a higher level of diversity than one would expect in the case of narrow specialisation. Applying the new indicator in a test of the often hypothesised benefits of innovative clustering, we find that the identified clusters have consistently higher wages in the sectors concerned.
    Keywords: Innovation, clusters, regional studies, patenting, manufacturing
    JEL: O30 R12 L60
    Date: 2016–05–11
    Date: 2016
  3. By: Lee, Yoo Hwan; Graff, Gregory D.
    Abstract: This study examines the mechanisms and geographic scope of the impact of university knowledge spillovers on the agricultural economy, using the case of Colorado State University (CSU) and the state’s agricultural economy. Our findings show that the spillover impacts of journal publications are rarely localized within Colorado; rather, the geographic scope of these impacts is national and even global. However, the extent to which the spillover impacts of patented knowledge is localized within Colorado is open to question because it is possible to control permissions for use, but at the same time it is impossible to limit everyone’s awareness and use of it, particularly in foreign jurisdictions where patents are not taken out by the university. The collaboration mechanism of knowledge dissemination, such as indicated by industry coauthorship on journal articles and private sponsorship of grants and contracts, which are more rivalrous by virtue of the more tacit qualities of knowledge being disseminated and because of the higher transaction costs, requires closer interaction and greater geographic proximity, which usually prevents global dissemination. Thus, we observe geographic proximity is significantly important for these channels. Finally, university start-ups are highly geographically bounded near universities because in the early stages start-up companies need support from their host university.
    Keywords: knowledge spillovers, geographic proximity, innovation, agriculture, university research, non-parametric model, Agribusiness, Community/Rural/Urban Development, Industrial Organization, Research and Development/Tech Change/Emerging Technologies, Q16, R12, O33, D23, C14,
    Date: 2016–08–02
  4. By: Carlino, Gerald; Kerr, William R.
    Abstract: This paper reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then discuss how these factors are frequently measured in the data and note some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
    Keywords: agglomeration, clusters, innovation, invention, entrepreneurship
    JEL: J2 J6 L1 L2 L6 O3 R1 R3
    Date: 2015–12–10
  5. By: Faggian, Alessandra; Partridge, Mark; Malecki, Ed
    Abstract: Researchers have long searched for the underlying causes of growth. In developed countries, as they shifted from industrial to knowledge economies, researchers have recently stressed the following sources of growth embodied in its workforce: human capital (linked to education), entrepreneurship (variously measured), and the creative class (associated with worker occupations). This study first proposes new conceptual ways to portray the interrelationship of these knowledge-based attributes. Then simultaneously considers all of these factors in an empirical model using U.S. counties. We find that human capital as measured by educational attainment and the intensity of small and medium-sized firms are statistically associated with subsequent growth, while other factors such as the share of creative class workers or the share of advanced technology industries are insignificant. We conclude that economic development strategies are too focused on attracting large outside firms and attracting advanced technology firms and not enough attention is given to building a foundation of competitive small and medium-sized firms.
    Keywords: Economic growth, human capital, entrepreneurship, creative class, US counties
    JEL: J24 O1 R11
    Date: 2016–05–17
  6. By: Lopez-Cermeño, Alexandra
    Abstract: This paper provides a simplified method of exploring the geographical limits of a knowledge shock over the long run. Using a geographically decomposable distance weighed sum of world GDPs by county, differences in differences regression analysis shows that a new university will not only have a positive impact on the local economy, but also on the GDP of nearby counties. Furthermore, challenging the conventional wisdom that knowledge spillovers affect the local economy, this study provides evidence that the effect expands to the whole national though its strength dilutes with distance. Consistent with the education literature, this investigation provides evidence that the shock will make the relative GDP of foreign competitors worse-off. Results are persistent in the long run, although the effect of time is also decreasing. Resultsare robust to potential endogeneity related to the self-selection of prosperous allocations for new academic institutions.
    Keywords: U.S. Counties; Spillovers; New Economic Geography
    JEL: O18 R11 N72 L8
    Date: 2016–04
  7. By: Chatman , Daniel; Xu, Ruoying; Park , Janice; Le, Kim
    Abstract: Public transit investments are a large and growing share of all transportation investments in the state of California, and such critical investments should be evaluated partly on their economic benefits. Taking such benefits into account could alter investment, service, and service restructuring decisions taken by transit agencies in the state. The relationship of public transportation to economic productivity, and spatial patterns of industrial location, is understudied. This project investigated how changes in rail transit service in California metropolitan areas (Los Angeles, the San Francisco Bay Area, and San Diego) are associated with firm clustering by industry and with commercial property values. A mixed methods approach was used. One strand of the research involved first, describing location patterns by industry according to transit access, and second, quantitatively modeling the relationship between transit access and (a) employment densification by industry and (b) commercial property values, using instrumental variables techniques with dynamic panel modeling in order to better infer causal relationships. The second strand consisted of interviews and other qualitative research aimed at finding possible explanations for firm location and expansion, and firm productivity. The quantitative research found that rail development generally promotes employment agglomeration and increased land value, but the magnitude of such effects differs across regions. San Francisco County had the highest employment densification and land value associated with rail proximity, while the LA region also had a relatively strong relationship between rail access and both employment density and property value. Rail access in the southern part of the San Francisco Bay Area, where Silicon Valley is situated, had a small relationship with employment densification but a positive effect on land values. On the contrary, rail development in the San Diego region was positively associated with employment density, but negatively associated with land value appreciation. Our interviews were consistent with these quantitative findings, and suggested that the differences between regions are due to differences in historical land development and use patterns as well as urban land regulations. In the San Francisco Bay Area, developers and real estate brokers report that rail transit plays the greatest role in the City of San Francisco, with relatively weak importance in Silicon Valley due to higher parking provisions and employer-provided transportation amenities such as shuttles. In the Los Angeles metropolitan area, rail transit is most highly valued in the dense downtown Los Angeles area, and is perceived to be playing an increasingly important role across the region as in places where traffic congestion is high and increasing.
    Keywords: Engineering, public transportation, firm cluster, agglomeration, commercial property values, economic development
    Date: 2016–04–01
  8. By: Sándor Juhász; Balázs Lengyel
    Abstract: Knowledge networks in industrial clusters are frequently analyzed but we know very little about creation and persistence of ties in these networks. We argue that tie creation primarily depends on opportunities and thus the position ofactors in the network and in space; while tie persistence is influenced by the value of the tie. Accordingly, results from a Hungarian printing and paper product cluster suggest that reciprocity, triadic closure, and geographical proximity between firms increase the probability of tie creation. Tie persistence is positively affected by technological proximity between firms and the number of their extra-regional ties.
    Keywords: knowledge networks, clusters, network dynamics, stochastic actor-oriented models
    JEL: D85 L14 R11 O31
    Date: 2016–05
  9. By: Meng, Bo; Yamano, Norihiko; Inomata, Satoshi; Xiao, Hao; Wang, Jianguo
    Abstract: Studies on the rise of global value chains (GVCs) have attracted a great deal of interest in the recent economics literature. However, due to statistical and methodological challenges, most existing research ignores domestic regional heterogeneity in assessing the impact of joining GVCs. GVCs are supported not only directly by domestic regions that export goods and services to the world market, but also indirectly by other domestic regions that provide parts, components, and intermediate services to final exporting regions. To better understand the nature of a country's position and degree of participation in GVCs, we need to fully examine the role of individual domestic regions. Understanding the domestic components of GVCs is especially important for larger economies such as China, the US, India and Japan, where there may be large variations in economic scale, geography of manufacturing, and development stages at the domestic regional level. This paper proposes a new framework for measuring domestic linkages to global value chains. This framework measures domestic linkages by endogenously embedding a target country's (e.g. China and Japan) domestic interregional input–output tables into the OECD inter-country input–output model. Using this framework, we can more clearly understand how global production is fragmented and extended internationally and domestically.
    Keywords: International trade, Input-output tables, Trade in value-added, Global value chain, Input-output, Regional heterogeneity
    JEL: C65 Q56 R15
    Date: 2016–03
  10. By: Alejandro Badel; Carlos Castro; Cristhian Rodriguez
    Abstract: We look at the empirical validity of Schelling’s models for racial residential segregation applied to the case of Chicago. Most of the empirical literature has focused exclusively the single neighborhood model, also known as the tipping point model and neglected a multineighborhood approach or a unified approach. The multi-neighborhood approach introduced spatial interaction across the neighborhoods, in particular we look at spatial interaction across neighborhoods sharing a border. An initial exploration of the data indicates that spatial contiguity might be relevant to properly analyze the so call tipping phenomena of predominately non-Hispanic white neighborhoods to predominantly minority neighborhoods within a decade. We introduce an econometric model that combines an approach to estimate tipping point using threshold effects and a spatial autoregressive model. The estimation results from the model disputes the existence of a tipping point, that is a discontinuous change in the rate of growth of the non-Hispanic white population due to a small increase in the minority share of the neighborhood. In addition, we find that racial distance between the neighborhood of interest and the surrounding neighborhoods has an important effect on the dynamics of racial segregation in Chicago.
    Keywords: Racial residential segregation, tipping point, spatial econometrics, Chicago.
    JEL: J15 R23
    Date: 2016–05–20
  11. By: Blerjana Bino; Ketrina Çabiri; Erjon Curraj; Alban Hashani; Ilire Mehmeti
    Date: 2015–02
  12. By: Hattendorff, Christian
    Abstract: ​The paper investigates the relationship between economic concentration and level of financial development to illuminate the linkage of real economy structure and financial markets. Using data from 81 Russian regions for the period 2005–2011, empirical evidence is offered to show that poor diversification weakens credit. Geographical variables are used as instruments of concentration in accounting for endogeneity. This work supports previous findings at the national level that policymakers seeking to promote economic development should place stronger emphasis on output diversification.
    Keywords: economic concentration, diversification, financial development, Russia
    JEL: E51 O11 R11
    Date: 2015–05–18
  13. By: Takaki Sato; Yasumasa Matsuda
    Abstract: This paper proposes spatial autoregressive conditional heteroscedasticity (S- ARCH) models to estimate spatial volatility in spatial data. S-ARCH model is a spatial extension of time series ARCH model. S-ARCH models specify conditional variances as the variances given the values of surrounding observations in spatial data, which is regarded as a spatial extension of time series ARCH models that spec- ify conditional variances as the variances given the values of past observations. We consider parameter estimation for S-ARCH models by maximum likelihood method and propose test statistics for ARCH effects in spatial data. We demonstrate the empirical properties by simulation studies and real data analysis of land price data in Tokyo.
    Date: 2016–04–26
  14. By: Combes, Pierre-Philippe; Gobillon, Laurent; Lafourcade, Miren
    Abstract: Ce rapport de recherche évalue les primes salariales associées au fait de vivre dans une grande agglomération en France, à partir du panel des Déclarations Annuelles des Données Sociales (DADS). Les résultats montrent que doubler la densité d'une zone d'emploi permet d'y augmenter les salaires de 1% environ. Mais cette moyenne masque de fortes disparités entre catégories socio-professionnelles et secteurs d'activités : la prime est ainsi de près de 4% pour les cadres, ainsi que pour les salariés travaillant dans les activités culturelles et audiovisuelles, les activités de conseil et d'assistance ou les activités immobilières. Doubler la densité d'une zone engendre cependant aussi des économies d'agglomération dynamiques, en permettant à ses salariés d'accroître leur rémunération de 0,07% par année passée dans la zone (soit un bénéfice de 1,4% au bout de 20 ans). Ces effets d'apprentissage, bien qu'ils profitent ici encore surtout aux cadres et professions intellectuelles supérieures, bénéficient en revanche aussi dans une très large mesure aux employés et aux ouvriers, qui valorisent mieux l'expérience professionnelle acquise en dehors de leur zone d'emploi actuelle que, par exemple, les professions libérales.
    Date: 2016–04

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.