nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒06‒18
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Congestion, Agglomeration, and the Structure of Cities By Brinkman, Jeffrey
  2. Regional Patterns of Deindustrialization and Prospects for Reindustrialization in South and Central East European Countries By Zoran Aralica; Nebojsa Stojcic
  3. Does trade liberalization trigger tax competition? Theory and evidence from OECD countries By Nelly Exbrayat
  4. Highways, Market Access and Urban Growth in China By Nathaniel Baum-Snow; Loren Brandt; J. Vernon Henderson; Matthew A. Turner; Qinghua Zhang
  5. Spatial labour market matching By Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater
  6. How do road infrastructure investments affect the regional economy? Evidence from Spain By Anna Matas Prat; Adriana Karina Ruíz Marín; Josep Lluís Raymond Bara
  7. Smart Stories - Implementing Smart Specialisation across Europe By John Huw Edwards; Fatime Barbara Hegyi
  8. Un Índice de Desigualdad Regional usando Datos Agregados By German-Soto, Vicente
  9. Un ejercicio de descomposición estructural para Colombia By Lucas Wilfried Hahn-De-Castro

  1. By: Brinkman, Jeffrey (Federal Reserve Bank of Philadelphia)
    Abstract: Congestion costs in urban areas are significant and clearly represent a negative externality. Nonetheless, economists also recognize the production advantages of urban density in the form of positive agglomeration externalities. The long-run equilibrium outcomes in economies with multiple correlated but o setting externalities have yet to be fully explored in the literature. Therefore, I develop a spatial equilibrium model of urban structure that includes both congestion costs and agglomeration externalities. I then estimate the structural parameters of the model using a computational algorithm to match the spatial distribution of employment, population, land use, land rents, and commute times in the data. Policy simulations based on the estimates suggest that congestion pricing may have ambiguous consequences for economic welfare.
    Keywords: Congestion; Agglomeration; Externalities; Spatial Equilibrium; Urban Structure; Estimation
    JEL: C51 D62 R13 R40
    Date: 2016–05–10
  2. By: Zoran Aralica; Nebojsa Stojcic
    Abstract: Abstract Past decades in Central and South East European countries have been characterised with shrinking of manufacturing output and employment. However, little is known about the causes, nature and the extent of deindustrialization in these countries at the regional level. The objective of this research is to explore the regional patterns of deindustrialization and determinants of reindustrialization in several CEECs and SEECs. Our analysis presents one of the first attempts to address these processes at regional level while taking into account the spatial effects. A spatial panel Durbin econometric technique is applied to data covering 2006 – 2012 period to discern inter – regional from intra – regional effects. Results of investigation reveal spatial clustering of economic activity. Traits of deindustrialization are observed in metropolitan areas and in regions on eastern belt of these countries while other regions reveal traits of shift towards high technology intensive manufacturing. Recommendations for future policy makers are provided.
    Keywords: deindustrialization, reindustrialization, regions, spatial analysis
    Date: 2015–12
  3. By: Nelly Exbrayat (Université de Lyon, Lyon F- 69007, France; CNRS, GATE L-SE, Ecully, F- 69130, France; Université J. Monnet, Saint-Etienne, F- 42000, France)
    Abstract: This article aims at assessing the empirical relevance of New Economic Geography models of tax competition. We rely on a simple model to specify tax reactions functions, which we estimate with a panel covering (up to) 26 OECD countries over the period 1982 to 2006. We provide striking support for the two main predictions regarding the slope and the constant of the reaction function: national governments seem to adjust their corporate tax rate towards the level chosen in countries that are more populated, and they tend to set higher corporate tax rates when their country enjoys a high real market potential. Through the latter effect, trade integration exerts a positive influence on the level of corporate taxation. However, using a theoretically grounded index of bilateral trade integration, we also show that trade liberalization gives rise to significant tax interactions in the setting of effective average tax rates in the case of European countries, thus exerting a downward pressure on corporate tax rates.
    Keywords: Tax competition, new economic geography, panel data, trade integration, market potential
    JEL: H2 H3 C23 F12
    Date: 2016
  4. By: Nathaniel Baum-Snow; Loren Brandt; J. Vernon Henderson; Matthew A. Turner; Qinghua Zhang
    Abstract: We investigate the effects of the construction of the national highway system in China on local economic outcomes. The analysis employs three main approaches. The first is based on a structural model of Ricardian trade that provides an explicit description of the general equilibrium effects of changes in the highway network. The second involves reduced form estimates of the casual effects highways, which accommodates the non-random assignment of highways across locations. The third approach is a hybrid of the first two. Technique matters. The structural model suggests that access to domestic markets, but not to export markets, increases economic output. The reduced form estimates suggest the opposite conclusion and also point to the importance of highways in the rise of regional primate cities. These reduced form findings are consistent with export driven growth policies and central or provincial government policies favouring regional primate cities. In addition to informing policy, our results raise concerns about the use of quantitative results from Ricardian trade models in isolation for understanding how and the extent to which infrastructure drives regional growth.
    Keywords: construction, China, Ricardian trade models
    JEL: F10 N65
    Date: 2016–06
  5. By: Elzbieta Antczak; Ewa Galecka-Burdziak; Robert Pater
    Abstract: We analyse to what extent spatial interactions affect the labour market matching process. We apply spatial econometrics methods (including spatial panel Durbin model), which are rarely used in labour market matching analysis. We use the data on stocks and the inflows of unemployed individuals and vacancies registered at public employment offices. We conduct the analysis at the NUTS-3 and the NUTS-4 levels in Poland for the period 2003-2014. We find that (1) spatial dependency affects matching processes in the labour market; (2) both close and remote spatial interactions influence the results of the matching process; (3) spatial indirect, direct, and total spillover effects determine the scale of outflows from unemployment; and (4) spatial modelling is a more appropriate approach than classic modelling for matching function.
    Keywords: spatial interaction, spillover effect, matching function, region
    JEL: C23 J61 J64
    Date: 2016–05
  6. By: Anna Matas Prat (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Adriana Karina Ruíz Marín (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Josep Lluís Raymond Bara (Departament d'Economia i Història Econòmica, Universitat Autonoma de Barcelona)
    Abstract: This paper analyses the relationship between road infrastructure improvements and investment in capital assets. Using aggregate data at a provincial level for 1977-2008, an equation for machinery and equipment investment is estimated applying Panel Corrected Standard Errors. The results indicate that the long-term elasticities of investment in relation to market potential, GDP and average years of schooling are 0.90, 0.75 and 0.80, respectively. Additionally, the long run impact of a road infrastructure investment policy is assessed. We find that the elasticities of investment in machinery and equipment, capital stock and GDP in relation to travel time are 1.18, 0.33 and 0.11, respectively.
    Keywords: infraestructure, Regional investment, Market potential, Travel time
    JEL: R4 R11
    Date: 2016–06
  7. By: John Huw Edwards (European Commission – JRC - IPTS); Fatime Barbara Hegyi (European Commission – JRC - IPTS)
    Abstract: The insight that this booklet provides - thanks to the precious contribution of national and regional authorities - shows that smart specialisation has gone far beyond the mere fulfilment of the ex-ante conditionality criteria linked to Cohesion policy allocations. It has triggered a change in the way innovation-driven regional development policies are dealt with across Europe, confirming the outcome of a number of surveys recently run on this topic. These 'Smart Stories' will drive the reader through the features of smart specialisation as it has been applied in a number of EU countries and regions, with a view to stimulating to further explore the concept and its policy implications, to identify complementarities and potential for mutual learning and collaboration. The period of strategy development has in one sense finished; however, the process of implementing and monitoring S3 will hopefully lead to many more 'Smart Stories' to be shared across all territories of the European Union.
    Keywords: innovation, policy, R&D, monitoring, collaboration, competitiveness, education, governance, growth, research, sustainability
    Date: 2016–05
  8. By: German-Soto, Vicente
    Abstract: This work considers the Euclidean distance concept to assess the evolution of regional disparities from aggregate data, such as for example, the per capita output. The vector space concept, as a measure of inequality, presents interesting properties: it tends to zero when the distances are reduced, is equal to zero in the hypothetical case of absolute equality and considers the contribution of each element to the joint inequality. The exercise generates an individual inequality index for the Mexican states along 1940-2010 that may be attractive in many respects, for example, in methodologies testing stochastic convergence, in regional economic growth, to determine the effectiveness of policies aimed to reduce the regional differences, among others.
    Keywords: regional income inequality; Euclidian distance; data analysis; development index; per capita product
    JEL: C82 O10 R12
    Date: 2016–06
  9. By: Lucas Wilfried Hahn-De-Castro
    Abstract: El análisis de descomposición estructural estudia el cambio en la oferta sectorial y regional de una economía desde la teoría de insumo producto. Esta metodología se aplica para la economía colombiana, identificada en siete sectores y 25 regiones para los años 2004 y 2012. Se utilizó información estimada durante la elaboración del modelo CEER, un modelo de equilibrio general computable multirregional calibrado para ambos años. Este ejercicio encuentra que, a pesar de la diversidad en los resultados entre regiones y sectores, el factor de cambio más importante fue el aumento generalizado en la demanda final. ******ABSTRACT: The structural decomposition analysis studies the change in the total output of different sectors and regions in an economy using the input output perspective. This methodology is applied to the Colombian economy, identified in seven sectors and 25 regions for 2004 and 2012. Two sets of information are used, which are estimated during the elaboration for both years of the CEER model, a multi-regional model of computable general equilibrium. It is found that, although there are many differences in the results across regions and sectors, the most important factor of change during the period was the increase in the final demand.
    Keywords: Análisis de descomposición estructural, Modelo CEER, economías regionales, análisis insumo producto.
    JEL: R12 R15
    Date: 2016–06–08

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