nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒09‒18
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Cluster Policy and Firm Performance: A Case Study of the French Optic/Photonic Industry By Amel Ben Abdesslem; Raphaël Chiappini
  2. River deep, mountain high: Of long-run knowledge trajectories within and between innovation clusters By Nomaler, Onder; Verspagen, Bart
  3. Industrial cluster policy and transaction networks: Evidence from firm-level data in Japan By Toshihiro Okubo; Tetsuji Okazaki; Eiichi Tomiura
  4. Colocation and knowledge diffusion: evidence from million dollar plants By Christian Fons-Rosen; Vincenzo Scrutinio; Katalin Szemeredi
  5. Estimating border effects: the impact of spatial aggregation By Cletus C. Coughlin; Dennis Novy
  6. Production networks, geography and firm performance By Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
  7. Multiple core regions: regional inequality in switzerland, 1860 to 2008 By Stohr, Christian
  8. Determinants of exports: firm heterogeneity and local context By Pietro de Matteis; Filomena Pietrovito; Alberto Franco Pozzolo
  9. The house price gradient: evidence from Italian cities By Elisabetta Manzoli; Sauro Mocetti
  10. A spatial autoregressive panel model to analyze road network spillovers on production By Álvarez, Inmaculada C.; Barbero, Javier; Zofío, José L.
  11. Agglomeration Economies, Productivity, and Quality Upgrading By SAITO Hisamitsu; MATSUURA Toshiyuki
  12. Blooming Landscapes in the West? - German reunification and the price of land. By Raphael Schoettler; Nikolaus Wolf; ;
  13. Product mix and firm productivity responses to trade competition By Thierry Mayer; Marc J. Melitz; Gianmarco I. P. Ottaviano
  14. Local and sectoral import spillovers in Sweden By Evangelia Leda Pateli
  15. Multilevel Transmission of Cultural Attitudes and Entrepreneurial Intention: Evidence from High-School Students By A. Tubadji; E. Santarelli; R. Patuelli

  1. By: Amel Ben Abdesslem (LAREFI; University of Bordeaux, France); Raphaël Chiappini (Université Côte d'Azur; GREDEG CNRS)
    Abstract: This study empirically analyzes the effects of a cluster policy on firms' productivity, exports, employment and capital in the French optic/photonic industry. Exploiting firm-level data, we first analyze the selection process of the French cluster policy through a logit model, before combining a propensity score matching procedure and a differences-in-differences estimation in order to capture its impact on firms' performance in the optic/photonic industry. We first show that larger firms are more likely to be selected by the French public policy in the optic/photonic industry. Second, the firms that have received the competitiveness cluster label have become more productive. We also found a positive and significant impact of the public policy on exports, total fixed assets and employment, but no evidence has been found localization economies. Third, when compared to an industrial cluster that only benefits from agglomeration economies, we found that firms from the competitiveness clusters have experienced a labor productivity gain, greater employment, and an increase in total fixed assets.
    Keywords: Cluster policy, productivity, difference-in-difference, optic/phonotic industry
    JEL: L25 L52 R12
    Date: 2016–09
  2. By: Nomaler, Onder (UNU-MERIT, and Eindhoven University of Technology); Verspagen, Bart (UNU-MERIT, and Maastricht University, SBE)
    Abstract: We bring together the topics of geographical clusters and technological trajectories, and shift the focus of the analysis of regional innovation to main technological trends rather than firms. We define a number of inventive clusters in the US space and show that long chains of citations mostly take place between these clusters. This is reminiscent of the idea of global pipelines of knowledge transfer that is found in the geographical literature. The deep citations are used to identify technological trajectories, which are the main directions along which incremental technological progress accumulates into larger changes. While the origin and destination of these trajectories are concentrated in space, the intermediate nodes travel long distances and cover many locations across the globe. We conclude by calling for more theoretical and empirical attention to the "deep rivers" that connect the "high mountains" of local knowledge production.
    Keywords: patent citations, regional concentration of inventive activities, technological trajectories, regional clusters, technological trends
    JEL: O33 O31 R11
    Date: 2016–09–14
  3. By: Toshihiro Okubo (Faculty of Economics, Keio University); Tetsuji Okazaki (Faculty of Economics, The University of Tokyo); Eiichi Tomiura (Graduate School of Economics, Hitotsubashi University)
    Abstract: Cluster policy is designed to facilitate inter-firm networking. We examine industrial clusters in Japan based on firm-level transaction data. Firms in clusters expand transaction networks at a higher speed, but significantly only with firms in the agglomerated core Tokyo, not with local firms within the same region. We confirm the robustness by regional historical background as instruments. By disaggregating firms by their main bank types, we find that cluster firms expanding networks are mainly financed by regional banks, not by banks with nation-wide operations. This suggests the importance of intensive relationship with the main banks for inter-firm network formation.
    Keywords: cluster policy, transaction network
    JEL: O25 R11 R38 R58
    Date: 2016–08–01
  4. By: Christian Fons-Rosen; Vincenzo Scrutinio; Katalin Szemeredi
    Abstract: This paper uses the entry of large corporations into U.S. counties during the 1980s and 1990s to analyse the effect of plant opening on knowledge spillovers to local inventors. We use a difference-in-differences identification strategy exploiting information on the revealed ranking of possible locations for large plants in the US. Under the identifying assumption that locations not chosen (losers) are a counterfactual for the chosen location (winner), we find that patents of these large corporations are 68% more likely to be cited in the winning counties relative to the losing counties after entry. The effect materializes after the opening of the plant, rather than after the entry decision itself. The increase in citations is stronger for more recent patents whereas patent quality does not seem to play an important role. We find that the increase in citations is larger from patents belonging to the same technology class of the cited patent.
    Keywords: productivity; innovation; knowledge diffusion
    JEL: O3 R11 R12
    Date: 2016–08
  5. By: Cletus C. Coughlin; Dennis Novy
    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: Gravity; Geography; Borders; Trade Costs; Heterogeneity; Home Bias; Spatial Attenuation; Modifiable Areal Unit Problem (MAUP)
    JEL: F10 F15 R12
    Date: 2016–05
  6. By: Andrew B. Bernard; Andreas Moxnes; Yukiko U. Saito
    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 the firm’s marginal production costs. We test the theory by exploiting the opening of a high-speed (Shinkansen) train line 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, consistent with the model.
    Keywords: production networks; trade; productivity; infrastructure
    JEL: D85 F14 L10 L14 R12
    Date: 2016–06
  7. By: Stohr, Christian
    Abstract: This paper estimates regional GDP for three different geographical levels in Switzerland. My analysis of regional inequality rests on a heuristic model featuring an initial growth impulse in one or several core regions and subsequent diffusion. As a consequence of the existence of multiple core regions Swiss regional inequality has been comparatively low at higher geographical levels. Spatial diffusion of economic growth has occurred across different parts of the country and within different labor market regions at the same time. This resulted in a bell-shape evolution of regional inequality at the micro regional level and convergence at higher geographical levels. In early and in late stages of the development process, productivity differentials were the main drivers of inequality, whereas economic structure was determinant between 1888 and 1941.
    Keywords: Regional data, Inequality, Industrial structure, Productivity, Comparative advantage, Switzerland
    JEL: R10 R11 N93 O14 O18
    Date: 2016
  8. By: Pietro de Matteis (Banca d'Italia); Filomena Pietrovito (Università degli Studi del Molise); Alberto Franco Pozzolo (Università degli Studi del Molise)
    Abstract: It is frequently argued that the geographical context in which firms operate can have a crucial impact on their propensity to internationalize. In this paper, we present the results of an empirical analysis that examines the determinants of export performance for a sample including more than 4,300 Italian manufacturing firms over the period 2000-2013, focusing on the role of provincial context, after controlling for firm-level characteristics. To this end, we first adopt a cluster analysis methodology to classify each Italian province in terms of context variables, such as: the distance to foreign markets, the level of human and social capital and the degree of efficiency of the public administration. Second, we estimate a set of binomial choice and linear models to assess the impact of the economic and social environment on the extensive and intensive margins of trade. The results, after confirming that firm-specific factors (size, experience, productivity, capital intensity, innovation, geographical agglomeration and, to some extent, credit constraints) affect both the intensive and the extensive margins of exports, show that context characteristics at the province level have an additional (statistically and economically) significant impact on the export performances of firms.
    Keywords: firm internationalization, local context, firm heterogeneity
    JEL: D22 F10 F14 F18
    Date: 2016–09
  9. By: Elisabetta Manzoli (Banca d'Italia); Sauro Mocetti (Banca d'Italia)
    Abstract: The paper examines the geographical variability in house prices, focusing on the gradient from the center to peripheral areas. The results reveal large price differentials in the main urban areas, even more than those between the Centre-North and South. The higher real estate prices in the centers of urban areas are affected by centripetal pressures from the demand side (also related to the local economic activities) to which supply only partially adjusts. We find that better infrastructures and lower commuting times can, however, bring the suburbs closer to the center and accordingly mitigate the cost of living centrally and the inclination of the gradient. Finally, we find a center-periphery gradient also for incomes, though this is less steep than that of house prices; it follows that the ratio between the value of houses and income is higher in the city center and lower in the periphery.
    Keywords: housing prices, agglomeration, mobility, income
    JEL: R30 R14 R41
    Date: 2016–09
  10. By: Álvarez, Inmaculada C.; Barbero, Javier; Zofío, José L.
    Abstract: The production function approach is used to introduce the effect of public infrastructure on economic growth focusing on its spillover effects. We improve the existing literature both from a conceptual and methodological perspective. As regressors we incorporate variables related to the new concepts of internal and imported transport infrastructure capital stocks, which are actually used in commercial flows, calculated by network analysis performed in GIS. The internally used capital stock represents own infrastructure that benefits accessing markets within the region itself, while the imported capital stock captures the spillover effect associated to the use of the infrastructure situated in neighboring regions. From a methodological perspective, we introduce spatial interdependence into these models, applying the most recent spatial econometric techniques based on instrumental variables estimation in spatial autoregressive panel models in comparison with Maximum Likelihood estimation methods. We illustrate the methodology with Spanish provincial panel data for the period 1980-2007. Results support the hypothesis that the imported capital has a positive spillover effect on production.
    Date: 2016
  11. By: SAITO Hisamitsu; MATSUURA Toshiyuki
    Abstract: Empirical studies on agglomeration have focused on the identification of its productivity-enhancement effects. A reduction in marginal costs due to agglomeration economies increases the operating profit of firms, which enables them to employ more inputs to produce higher-quality products. This study examines such effects of agglomeration on product quality by using plant-product-level data for Japanese manufacturing. Empirical findings confirm that product quality increases with the market size of regions, suggesting that agglomeration-inducing polices are effective for increasing firms' profits by improving both productivity and product quality. Stated differently, our results indicate that the benefits of agglomeration on profits are underestimated in previous studies by ignoring its contribution to quality upgrading.
    Date: 2016–08
  12. By: Raphael Schoettler; Nikolaus Wolf; ;
    Abstract: Abstract: German reunification was a positive market access shock for both East and West Ger- many. Regions that for 45 years had experienced a decline in population due to their loss in market access following the division of Germany after WWII were most strongly aected by this positive shock. We use an entirely new data set to analyse the eects of German reunication on the value of land in West Germany. We nd that regions in the immediate border area experienced a relative rise in land prices compared to regions outside a 100km radius from the border. At the same time we conrm the absence of a population eect (Redding and Sturm, 2008) even including rural boroughs. We nd that land values have adjusted more quickly than population and in some cases even overshot predicted long-run levels within the rst decade of reunication. We attribute this nding to the information and expectation component of land prices. Land values incorporate expectations about long- run equilibrium adjustments following reunication more swiftly, but rms and households are slower to react due to the costs of relocating. The results are consistent with empirical work on the positive eects of infrastructure projects on land values (Yiu and Wong, 2005; Lai et al., 2007; Duncan, 2011).
    JEL: F15 N14 N94 R12 R30
    Date: 2016–08
  13. By: Thierry Mayer; Marc J. Melitz; Gianmarco I. P. Ottaviano
    Abstract: We document how demand shocks in export markets lead French multi-product exporters to re-allocate the mix of products sold in those destinations. In response to positive demand shocks, those French firms skew their export sales towards their best performing products; and also extend the range of products sold to that market. We develop a theoretical model of multi-product firms and derive the specific demand and cost conditions needed to generate these product-mix reallocations. Our theoretical model highlights how the increased competition from demand shocks in export markets .and the induced product mix reallocations - induce productivity changes within the firm. We then empirically test for this connection between the demand shocks and the productivity of multi-product firms exporting to those destinations. We find that the effect of those demand shocks on productivity are substantial .and explain an important share of aggregate productivity fluctuations for French manufacturing.
    Keywords: productivity; trade; competition
    JEL: R14 J01
    Date: 2016–07
  14. By: Evangelia Leda Pateli
    Abstract: In this paper I investigate the relevance and explore the nature of import spillovers on the firms' decision to start importing using an exceptionally detailed data set on Swedish firms' imports, at the product-level and by source-country, spanning the period between 1997 and 2011. I study whether the presence of established importers located in the same area and/or operating in the same industry influences the import behavior of individual firms. The import side of trade has received relatively less attention in the literature and this tendency carries over to the study of spillovers that have mainly been researched from the exporters' perspective. There are however reasons to believe that import spillovers are indeed a relevant phenomenon. This paper bridges the gap in the literature and further contributes to the understanding of import spillovers by laying out a theoretical framework that formalizes the main forces at play. I develop a model for firms' import decisions featuring heterogeneous firms, product and country specific fixed costs of sourcing while additionally accommodating spillovers. To the best of my knowledge, this is one of only a handful of papers to study spillovers for import activities, and the first to provide theoretical insights for this mechanism.
    Keywords: importers; spillovers
    JEL: R14 J01
    Date: 2016–06
  15. By: A. Tubadji; E. Santarelli; R. Patuelli
    Abstract: Intention toward any occupational choice can be widely categorized as a rational choice process combined with a subjective attitude function. There is extensive literature dealing with the formation of intention toward entrepreneurship in adolescents, in particular as a result of either parental (vertical) transmission of social capital or network effects from peers or neighbours (the latter two being two different levels of horizontal transmission varying in proximity in terms of bonding and bridging). We contribute to this literature by considering the joint effect of all these three levels simultaneously, in order to avoid an underspecification of the model due to omission of important cultural factors. We hypothesize that such three levels identify a mechanism where the individual perception of their importance interacts with their objective characteristics. With data for second-year high-school students, and employing empirical triangulation through Logit and 3SLS methods, we find evidence for a strong parental effect and of secondary peer effects on student intention. We also detect clear endogenous effects from the neighbourhood and the overall cultural context. Moreover, entrepreneurship is confirmed to be perceived, even by students, as a buffer for unemployment and social mobility.
    JEL: R32 R38 Z10 J60
    Date: 2016–08

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