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on Economic Geography |
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Issue of 2016‒08‒07
eight papers chosen by Andreas Koch Institut für Angewandte Wirtschaftsforschung |
| By: | Alessandra, Michelangeli; Nicola, Pontarollo |
| Abstract: | This paper aims at assessing the contribution of ethnic minorities to the productivity of the main sectors of Italian provinces. To this end, we consider the first ten nationalities by numbers of regularised persons observed at the provincial level (NUTS-3) between 2003 and 2011. We use an empirical panel growth model with spatially augmented specifications, which allows to capture both the direct (marginal) and indirect (spillover) effects of each community on local productivity at the provincial level. Our findings show that two communities out of ten have a positive impact on economic performance of Italian provinces. Other foreign groups have significant effects only indirectly, meaning that these groups do not affect growth of provinces where they live, but the neighbouring provinces likely because of commuting. |
| Keywords: | productivity growth, specialisation, spatial econometrics, foreigners |
| JEL: | R11 R12 R23 |
| Date: | 2016–08–02 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Berliant, Marcus; Watanabe, Hiroki |
| Abstract: | Zipf’s law is one of the best-known empirical regularities in urban economics. There is extensive research on the subject, where each city is treated symmetrically in terms of the cost of transactions with other cities. Recent developments in network theory facilitate the examination of an asymmetric transport network. In a scale-free network, the chance of observing extremes in network connections becomes higher than the Gaussian distribution predicts and therefore it explains the emergence of large clusters. The city-size distribution shares the same pattern. This paper decodes how accessibility of a city to other cities on the transportation network can boost its local economy and explains the city-size distribution as a result of its underlying transportation network structure. Finally, we discuss the endogenous evolution of transport networks. |
| Keywords: | Zipf’s law; city-size distribution; scale-free network |
| JEL: | L14 R12 R40 |
| Date: | 2016–07–30 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Eder, Christoph (University of Innsbruck); Halla, Martin (University of Innsbruck) |
| Abstract: | As a consequence of World War II, Austria was divided into four different occupation zones for 10 years. Before tight travel restrictions came into place, about 11 percent of the population residing in the Soviet zone moved across the demarcation line. We exploit this large internal migration shock to further our understanding of why economic activity is distributed unevenly across space. Our analysis shows that the distorted population distribution across locations has fully persisted until today (60 years after the demarcation line become obsolete). An analysis of more direct measures of economic activity shows an even higher concentration in the former non-Soviet zone. This gap in economic activity is growing over time, mainly due to commuting streams out of the former Soviet zone. This shows that a transitory shock is capable of shifting an economy to a new spatial equilibrium, which provides strong evidence for the importance of increasing returns to scale in explaining the spatial distribution of economic activity. |
| Keywords: | spatial equilibrium, agglomeration effects, population shock, World War II, Austria |
| JEL: | R11 R12 R23 J61 N44 N94 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Bakker, Jan David (University of Oxford); Parsons, Christopher (University of Western Australia); Rauch, Ferdinand (University of Oxford) |
| Abstract: | Under apartheid, black South Africans were severely restricted in their choice of location and many were forced to live in homelands. Following the abolition of apartheid they were free to migrate. Given gravity, a town nearer to the homelands can be expected to receive a larger inflow of people than a more distant town following the removal of mobility restrictions. Exploting this exogenous variation, we study the effect of migration on urbanisation and the distribution of population. In particular, we test if migration inflows led to displacement, path dependence, or agglomeration in destination areas. We find evidence for path dependence in the aggregate, but substantial heterogeneity across town densities. An exogenous population shock leads to an increase of the urban relative to the rural population, which suggests that exogenous migration shocks can foster urbanisation in the medium run. |
| Keywords: | economic geography, migration, urbanisation, natural experiment |
| JEL: | R12 R23 N97 O18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Goldschlag, Nathan (U.S. Census Bureau); Bianchini, Stefano (Université de Strasbourg); Lane, Julia (New York University); SanMartin Sola, Joseba; Weinberg, Bruce A. (Ohio State University) |
| Abstract: | Public support of research typically relies on the notion that universities are engines of economic development, and that university research is a primary driver of high wage localized economic activity. Yet the evidence supporting that notion is based on aggregate descriptive data, rather than detailed links at the level of individual transactions. Here we use new micro-data from three countries - France, Spain and the United States - to examine one mechanism whereby such economic activity is generated, namely purchases from regional businesses. We show that grant funds are more likely to be expended at businesses physically closer to universities than at those farther away. In addition, if a vendor has been a supplier to a grant once, that vendor is subsequently more likely to be a vendor on the same or related grants. Firms behave in a way that is consistent with the notion that propinquity is good for business; if a firm supplies a research grant at a university in a given year it is more likely to open an establishment near that university in subsequent years than other firms. |
| Keywords: | science policy, innovation, regional economic development, UMETRICS |
| JEL: | O30 R10 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Alexander Cordes; Birgit Gehrke; Christian Rammer; Roman Römisch (The Vienna Institute for International Economic Studies, wiiw); Paula Schliessler; Pia Wassmann |
| Abstract: | Abstract This study introduces a suitable method to break down national trade data to the regional level. This allows producing trade indicators at the regional level, revealed export advantages in particular. Identifying industries in which a region realises a strong trade specialisation plays a twofold role in industrial and regional policy-making. Firstly, identifying successful structures at the industry-region level helps to improve the understanding of micro- and meso-foundations for competitiveness as well as scope and cases for policy intervention. Secondly, knowledge of the spatial distribution of competitive industries and required location factors is necessary for differentiated perspectives on future economic development and the choice of policy instruments. The study applies descriptive, econometric and case study analysis to identify regional patterns of trade specialisation, as well as region- and industry-specific factors related to success in international markets. Based on the results obtained, the study develops conclusions for EU regional and smart specialisation policies. |
| Keywords: | EU regions, regional foreign trade, EU regional policy, smart specialisation strategies, regional competitiveness, determinants of competitiveness |
| JEL: | R12 R15 R58 F14 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Alexandra López-Cermeño (Universidad Carlos III de Madrid) |
| Abstract: | This paper provides a simplified method of exploring the geographical limits of a knowledge shock over the long run. Using a geographically decomposable distanceweighed 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 nation although 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. Results are robust to potential endogeneity related to the self-selection of prosperous allocations for new academic institutions. |
| Keywords: | New Economic Geography, Spillovers, U.S Counties |
| JEL: | L8 N72 R11 O18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |
| By: | Sabine D'Costa; Enrique Garcilazo; Joaquim Oliveira Martins |
| Abstract: | This paper aims to understand the impact of nation-wide structural policies on the productivity growth of OECD regions. In particular we explore how this impact varies with the productivity gap of regions with their country's frontier region. We use a policy-augmented growth model that allows us to estimate the effects of macroeconomic and structural policies on regional productivity growth. We estimate our model with an unbalanced panel dataset consisting of 265 regions from 24 OECD countries covering the period 1997 to 2007. We find that the effects on regional productivity growth are differentiated with respect to the regional productivity gap: Relaxing employment protection legislation on temporary contracts or lowering barriers to trade and investment would enhance productivity growth in lagging regions, whereas reducing the amount of state control has the opposite effect on lagging regions. Macroeconomic factors also influence regional performance: trade openness and the government debt to GDP ratio are more beneficial to lagging regions. These results reveal that average relationships between nation-wide policies and the productivity of regions can hide strong differentiated effects according to the distance to the country frontier. This carries important policy implications, mainly that these region-specific effects should be taken into account in the policy design. |
| Keywords: | structural reforms, regional growth, lagging regions |
| JEL: | R11 R58 O18 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=&r=geo |