nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒10‒23
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Comparative Advantage and Agglomeration of Economic Activity By Pflüger, Michael P.; Tabuchi, Takatoshi
  2. Urban Governance Structure and Wage Disparities across US Metropolitan Areas By Licia Ferranna; Margherita Gerolimetto; Stefano Magrini
  3. Does trade liberalization trigger tax competition? Theory and evidence from OECD countries By Nelly Exbrayat
  4. Patterns and determinants of inventors' mobility across European urban areas By Clément Gorin
  5. Innovation and Manufacturing Offshoring with Fully Endogenous Productivity Growth By Colin Davis; Ken-ichi Hashimoto
  6. Assessing the Role of Tramsmission Channels in Sovereign Risk: A Spatial Econometrics Approach By Nicolas DEBARSY; CYRILLE DOSSOUGOIN; Cem ERTUR; Jean-Yves GNABO
  7. Diversity and Employment Prospects: Neighbors Matter! By C. Hémet; C. Malgouyres
  8. Four Essays in Empirical Urban: Economics Evaluation of French Regional Policies By Corentin Trevien
  9. Matriz insumo-producto interregional para Colombia, 2012 By Eduardo Haddad; Weslem Faria; Luis Armando Galvis-Aponte; Lucas Wilfried Hahn-De-Castro

  1. By: Pflüger, Michael P. (University of Würzburg); Tabuchi, Takatoshi (University of Tokyo)
    Abstract: The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction between agglomeration economies and comparative advantage involves a fundamental tension which is intricately affected by trade costs. A reduction of trade costs fosters the dispersive impact of comparative advantage in sectors governed by this force whilst the impact of agglomeration economies is enhanced by trade cost reductions in the increasing returns sector. The key implication for international trade is that the wage ratio between large and small economies is not only shaped by the primitives that determine agglomeration economies and comparative advantage but also, and differentially, by the sectoral levels of trade costs. The fundamental implication for an economic geography context where labor is mobile across locations is that partial agglomeration emerges when agglomeration economies are strong relative to comparative advantage, and this is more likely the lower are trade costs in increasing returns sectors and the higher are trade costs in sectors governed by comparative advantage. The model may serve as a foundation for an urban system where the endogenously emerging larger city exhibits more diversity in production.
    Keywords: comparative advantage, increasing returns, labor mobility, agglomeration, offshoring, urban systems
    JEL: F12 F22 R11 R12 R13
    Date: 2016–10
  2. By: Licia Ferranna (Ca’ Foscari University of Venice, Department of Economics); Margherita Gerolimetto (Ca’ Foscari University of Venice, Department of Economics); Stefano Magrini (Ca’ Foscari University of Venice, Department of Economics)
    Abstract: This paper analyses the determinants of spatial wage disparities in the US context for the period 1980-2000. Agglomeration benefits are estimated based on city productivity premia which are computed after controlling for the skills distribution among metropolitan areas as well as industry fixed effects. The drivers of productivity differentials that are taken into consideration are the size of the local economy, the spatial interactions among local autonomous economic systems and the structure of urban governance as well as the policy responses to the fragmentation issue. A metropolitan area with ten percentage more administrative units than another of the same size, experiences wages that are between 2.0% and 3.0% lower. The presence of a voluntary governance body is found to mitigate the problem of fragmentation only marginally, while the existence of special purpose districts have a negative impact on regional productivity. The implementation of a metropolitan government with a regional tax system is expected to increase productivity by around 6%.
    Keywords: Governance, Productivity, Metropolitan Statistical Areas, Agglomeration Econonomies
    JEL: H70 R12 R23 J3
    Date: 2016
  3. By: Nelly Exbrayat (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    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
    Date: 2016
  4. By: Clément Gorin (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Highly skilled professionals are regarded as one of the main driver for the economic development of cities through their effect on innovative capabilities. Skilled individuals are mobile in space and tend to cluster within a limited number of urban areas, therefore a crucial question is what factors shape this flows and influence the divergent levels of economic development across urban areas. Building on these considerations, this paper takes advantage of a large-scale dataset to shed light on the patterns and determinants of inventors' mobility across European urban areas. First, a descriptive analysis is carried out to document the dynamics of inventors' mobility and their spatial dimension. Second, a gravity model is used to analyse how job opportunities and socio-professional networks influence the flows of inventors between urban areas. From a methodological perspective, this paper uses a spatial filtering variant of the Poisson gravity model, which accommodate the nature of the data, while controlling for multilateral resistance and spatial autocorrelation in mobility flows. The descriptive analysis suggest that inventors' mobility occurs primarily between relatively large and collocated urban areas, partly because of the high level of circular and intra-firm mobility. The econometric analysis shows that employment opportunities, social networks, as well as various forms of proximity are important determinants of inventors' mobility.
    Keywords: Inventors’ mobility, urban areas, job opportunities, socio-professional network, Poisson gravity model, spatial filtering
    Date: 2016
  5. By: Colin Davis (Institute for the Liberal Arts, Doshisha University); Ken-ichi Hashimoto (Graduate School of Economics, Kobe University)
    Abstract: This paper investigates the relationship between net offshoring patterns for innovation and manufacturing and fully endogenous productivity growth in a two-country model. The occupational choice of skill-differentiated workers into low-skilled employment in production and high-skilled employment in innova- tion determines labor market allocations, and perfect investment mobility allows firms to shift innovation and manufacturing independently between countries. These mechanisms generate a tension between access to technical knowledge and low-cost high-skilled labor in the location decision for innovation, which results in innovation and manufacturing tending to concentrate in the asset-wealthy (asset-poor) country when trade costs are high (low). The model exhibits a positive relationship between innovation costs and the concentration of industry and innovation, ensuring that a rise in knowledge diffusion between countries coincides with increases in net offshoring flows in innovation and manufacturing from the asset-wealthy country to the asset-poor country, and a faster rate of productivity growth, when the asset-wealthy country has larger shares of innovation and production.
    Keywords: innovation offshoring, manufacturing offshoring, endogenous productivity growth, process innovation, industry location, international trade
    JEL: F12 F43 R11
    Date: 2016–10
    Date: 2016
  7. By: C. Hémet; C. Malgouyres
    Abstract: This paper aims at determining whether and how the level of origins' diversity of a community affects its members' employment prospects. Relying on detailed data from the French Labor Force Survey, we measure diversity at two geographic levels: the neighborhood and the local labor market. The correlation between diversity and employment varies accordingly: it is negative at the former level but positive at the latter level. We then tackle the endogenous location selection issue in two ways. First, we rely on a standard instrumental variable approach to deal with diversity at the local labor market level, and propose a new instrument: diversity in the public housing sector. After correcting for endogeneity, the positive effect of diversity at this level is driven down to zero, revealing that it was mostly due to self-selection. Second, regarding neighborhood diversity, we adopt the strategy developed by Bayer et al. (2008) which takes advantage of the very precise localization of the data. The negative effect of diversity on employment at the neighborhood level is reinforced. We also show that diversity in terms of nationalities (a proxy for cultural diversity) matters more than diversity based on parents' origins (a proxy for ethnic diversity). These results reveal that local diversity may act as a barrier to communication, preventing job information transmission, and hence reducing employment prospects.
    Keywords: diversity, employment, neighborhood effects.
    JEL: J15 J60 R23 Z13
    Date: 2016
  8. By: Corentin Trevien (Département d'économie)
    Abstract: Cette thèse porte sur l’évaluation de quatre politiques d’aménagement du territoire en France. Elle aborde également trois questions majeures de l’économie urbaine : l'influence des transports sur la localisation de l'emploi et de la population, l’élasticité de l'offre de logement et la ségrégation urbaine. La première politique publique étudiée est le Réseau express régional. Ainsi, l’amélioration des transports publics en Île-de-France a favorisé la croissance de l’emploi dans les communes de banlieue. Il n’y aurait en revanche pas de croissance globale de la population mais un possible effet de gentrification à proximité des stations. Dans un deuxième temps, cette thèse s’intéresse au rôle du train à grande vitesse dans l’organisation spatiale des entreprises multi-implantations. Il est établi que les filiales voyant le temps de parcours vers leur siège diminuer se spécialisent dans les activités de production. Cette création s'effectue au détriment des activités d'encadrement. Ensuite, ce travail évalue l’impact des zones franches urbaines. L’effet de première génération de ce dispositif sur la localisation des entreprises et sur l'emploi est massif. En revanche, il n'a que faiblement profité aux habitants de ces quartiers, soulignant un manque de ciblage de la mesure. Le dernier chapitre évalue l’effet des aides au logement sur le niveau des loyers et l’offre de logements locatifs. Il confirme que les aides au logement induisent une hausse des loyers privés. L’élasticité de l'offre de logements reste faible dans le long terme, puisque l'effet inflationniste perdure tandis que la quantité et la qualité des logements locatifs ne s'adaptent pratiquement pas.
    Keywords: Economie urbaine; Evaluation des politiques publiques; Infrastructures de transports; Localisation des entreprises; Urban economics, evaluation of public policies, transport infrastructures, firm location choice
    Date: 2016–05
  9. By: Eduardo Haddad; Weslem Faria; Luis Armando Galvis-Aponte (Banco de la República); Lucas Wilfried Hahn-De-Castro (Banco de la República)
    Abstract: Este documento presenta un breve resumen de los principales aspectos asociados a la construcción de una matriz de insumo-producto interregional para Colombia. Como parte de un proyecto en curso que tiene como objetivo actualizar un modelo interregional de equilibrio general computable (ICGE), el modelo CEER, se construyó una base de datos bajo condiciones de información limitada. Para ello se estimó un modelo de insumo-producto interregional completamente especificado, que sirvió para la posterior calibración del modelo ICGE. Con este modelo se lleva a cabo un análisis de las participaciones intra e interregionales de los multiplicadores medios de producto. Por otra parte, también se muestran algunas cifras detalladas sobre la descomposición del producto, teniendo en cuenta la estructura de la demanda final. Classification JEL:R15
    Keywords: Modelo CEER, Matriz insumo-producto interregional, nueva geografía económica, Colombia.
    Date: 2016–10

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