nep-geo New Economics Papers
on Economic Geography
Issue of 2016‒10‒30
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Global Investments and Regional Development Trajectories: the Missing Links By Riccardo Crescenzi; Simona Iammarino
  2. The Evolution of Income Disparities across US Metropolitan Statistical Areas By Licia Ferranna; Margherita Gerolimetto; Stefano Magrini
  3. Where Are the Artists? Analyzing Economies of Agglomeration in Spain By Ivan Boal-San Miguel; Luis Cesar Herrero-Prieto
  4. Economic Institutions and the Location Strategies of European Multinationals in their Geographical Neighbourhood By Andrea Ascani; Riccardo Crescenzi; Simona Iammarino
  5. Firm Level Allocative Inefficiency: Evidence from France By Lionel Fontagné; Gianluca Santoni
  6. Micro-dynamics in regional transition paths to sustainability - an analysis of organizational and institutional change in Augsburg’s transition topology By Simone Strambach; Gesa Pflitsch
  7. Does distance determine who is in higher education? By Sørensen, Elise Stenholt; Høst, Anders Kamp
  8. Survival of Entrepreneurial Firms: The Role of Agglomeration Externalities By Tavassoli, Sam; Jienwatcharamongkhol, Viroj
  9. Export diversification and economic development: a dynamic spatial data analysis By Roberto Basile; Aleksandra Parteka; Rosanna Pittiglio
  10. Innovation policies for regional structural change: Combining actor-based and system-based strategies By Arne Isaksen; Franz Tödtling; Michaela Trippl
  11. Spatio-Temporal Autoregressive Semiparametric Model for the analysis of regional economic data By Román Mínguez; María L.; Roberto Basile
  12. The Empirics of Agglomeration Economies By Pierre-Philippe Combes; Laurent Gobillon
  13. Discrete-Space Agglomeration Model with Social Interactions: Multiplicity, Stability, and Continuous Limit of Equilibria By Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
  14. The effect of immigration on convergence dynamics in the US By Licia Ferranna; Margherita Gerolimetto; Stefano Magrini

  1. By: Riccardo Crescenzi; Simona Iammarino
    Abstract: Regional economic development has been long conceptualised as a non-linear, interactive and socially embedded process: these features were traditionally regarded as spatially mediated and highly localised. However, unprecedentedly fast technological change coupled with the intensification of global economic integration processes has spurred the need to place regional development in a truly open and interdependent framework. Despite substantial progress made by the academic literature, rethinking regional development in this perspective still presents a number of challenges in terms of concepts, empirical evidence and policy approaches. Following an interdisciplinary assessment of how openness and connectivity – proxied by one particular of the many cross-border flows, i.e. global investments – interact with regional economic development trajectories, this paper presents a picture of the geography of foreign investments from and to the European regions and its change after the financial and economic crisis in 2008. This simple exercise allows us to shed some initial light on how the operationalisation of regional connectivity can improve our empirical understanding of the evolution of regional economies and the policy approach needed to support their reaction to change.
    Keywords: FDI, regions, local-global connectivity, regional development, Europe
    JEL: F2 R11 R12 O19 O3 O52
    Date: 2016–10
  2. By: Licia Ferranna (Ca’ Foscari University of Venice, Department of Economics); Margherita Gerolimetto; Stefano Magrini (Ca’ Foscari University of Venice, Department of Economics)
    Abstract: The paper investigates how the spatial evolution of core-based city regions affects the dynamics of income disparities across Metropolitan Statistical Areas in the United States between 1971 and 2010. Treating initially non-metropolitan counties as part of the functional economic system for the whole time period changes the internal composition of average per capita personal income thus biasing convergence analysis. The paper analyses the dynamics of the cross-sectional distribution of per capita personal income by comparing different methods to define MSAs over time. The results show that a cluster of high income economies emerges when MSAs are allowed to evolve spatially.
    Keywords: Convergence, Metropolitan Statistical Areas, Distribution Dynamics, Decentralization
    JEL: R12 R23 C14
    Date: 2016
  3. By: Ivan Boal-San Miguel (Department of Applied Economics, University of Valladolid); Luis Cesar Herrero-Prieto (Department of Applied Economics, University of Valladolid)
    Abstract: The creative economy has become the subject of increasing interest in recent years, both in the area of cultural economics as well as in economic development studies and the analysis of spatial disparities. In this regard, various studies have examined the spatial logics of cultural and creative industries, although analyses into the location and agglomeration of artists therein remain few and far between, in other words inquiry into the activities location linked to artistic creation in a purer sense. The present work thus seeks to delve into location and spatial structure of the cultural sector in a Spanish region, focusing specifically on activities more closely linked to artistic creativity, such as literary creation, performing arts, bullfighting, music, cinema, etc. The work examines the autonomous community of Castilla y León as an example, and posits an analysis of the spatial distribution of artists using micro-spatial disaggregation, in other words taking the network of towns as the territorial analysis unit. Spatial econometric techniques are used to identify location patterns, pinpoint territorial activity clusters and to measure agglomeration economies. A first look at the findings reveals that the cultural sector in Castilla y León evidences a strong trend towards concentration, with spatial distribution patterns which lead to the formation of statistically significant cultural clusters and strong spatial dependence between territories over the whole of the period analysed (2005-2013).
    Keywords: Artists, spatial economic analysis, economies of agglomeration, cultural clusters, micro-territorial analysis
    JEL: Z11 R12
    Date: 2016–10
  4. By: Andrea Ascani (The London School of Economics and Political Science (LSE)); Riccardo Crescenzi (The London School of Economics and Political Science (LSE)); Simona Iammarino (The London School of Economics and Political Science (LSE) and The John H Dunning Centre for International Business (Henley Business School, University of Reading))
    Abstract: This paper investigates how the location behaviour of Multinational Enterprises (MNEs) is shaped by the economic institutions of the host countries. The analysis covers a wide set of geographically proximate economies with different degrees of integration with the ‘Old’ 15 European Union (EU) members: New Member States, Accession and Candidate Countries, as well as European Neighbourhood Policy (ENP) countries and the Russian Federation. The paper aims to shed new light on the heterogeneity of MNE preferences for the host countries’ regulatory settings (including labour market and business regulation), legal aspects ( of property rights and contract enforcement) and the weight of the government in the economy. By employing data on 6,888 greenfield investment projects, the randomcoefficient Mixed Logit analysis here applied shows that, while the quality of the national institutional framework is generally beneficial for the attraction of foreign investment, MNEs preferences over economic institutions are highly heterogeneous across sectors and business functions.
    Keywords: multinational enterprises, economic institutions, location choice, European Union
    JEL: F23 P33 L20 R30
    Date: 2015–07
  5. By: Lionel Fontagné (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Gianluca Santoni (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)
    Abstract: A large portion of productivity differentials among locations is related to density. Firms located in denser areas are more productive due to agglomeration economies (Combes et al., 2012). We provide in this paper an explanation of such economies: lower input misallocation. The distribution of resources among heterogeneous firms has relevant consequences on allocative efficiency and denser areas provide a more favorable environment for dynamic matching between employers and employees. Using a methodology proposed by Petrin and Sivadasan (2013) we are able to assess the degree of resource misallocation among firms within sectors for each of the 96 French "Départements". Based on firm-level productivity estimates, we identify in the gap between the value of the marginal product and marginal input price the output loss due to inefficiencies in inputs allocation. Over the period 1993-2007 the average gap at firm level is around 10 thousands euro, showing a relevant increase starting from the early 2000s. Importantly, firms misallocations are lower in denser areas, suggesting that the matching mechanism is playing a role in explaining the productivity premium of agglomerated locations.
    Keywords: Misallocation, Productivity, Firm Level Data
    Date: 2015–07
  6. By: Simone Strambach (Department of Geography, Philipps University Marburg); Gesa Pflitsch (Department of Geography, Philipps University Marburg)
    Abstract: While there has recently been an increased interest in urban and regional transitions to sustainability, there are little profound insights about the emergence, design and enforcement of regional transition paths to sustainability (RTPS). The latter are characterized by organizational and institutional dynamics that affect multiple regimes and cannot fully be captured with the niche-regime categories of the multilevel perspective (MLP). This paper is therefore based on recent approaches from evolutionary economic geography (EEG) that focus on how actors at the micro- level use the plasticity of paths to enact change. The transition path and underlying micro-dynamics over more than 30 years in the Augsburg region revealed in an empirical study are visualized in the form of a transition topology. The results show that RTPS are not a determined process which follows a prescribed course of events from the beginning. Actors use the interpretative flexibility of institutions and establish organizational proximity between different institutional logics to break up institutional consolidations and allow new configurations within the path.
    Keywords: Sustainability transitions, regional paths, institutional change,organizational change, micro-dynamics
    JEL: B52 D83 Q01 R11
    Date: 2016–08
  7. By: Sørensen, Elise Stenholt; Høst, Anders Kamp
    Abstract: We assessed the effect of distance to higher education institutions on education enrolment. Furthermore, we analysed how parental education and geographic region affect the relationship between distance and enrolment. We employed Danish administrative data of high school students from 2006–2013 and found no relationship between distance and the decision to enrol in higher education, when controlling for individual and parental characteristics. However, the results did suggest a small negative association between distance and enrolment among students in cases where neither of their parents completed a higher education. However, this only applied in Central Jutland Region and Southern Denmark Region.
    Keywords: High school graduates, higher education, geographical accessibility, distance to school
    JEL: C25 I21 R10
    Date: 2015–12–11
  8. By: Tavassoli, Sam (CIRCLE, Lund University); Jienwatcharamongkhol, Viroj (Department of Economics, Lund University)
    Abstract: This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service (KIBS) sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the “related variety” of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while “unrelated variety” barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.
    Keywords: Entrepreneurial firms; region; agglomeration externalities; survival analysis; related variety; unrelated variety
    JEL: J24 L26 R12
    Date: 2016–10–19
  9. By: Roberto Basile (Second University of Naples); Aleksandra Parteka (Gdansk University of Technology); Rosanna Pittiglio (Second University of Naples)
    Abstract: This paper contributes to the empirical literature on the relationship between ‘export variety’ (export diversification) and economic development by relaxing the assumption of cross-country independence and allowing for spatial diffusion of shocks in observed and unobserved factors. Export variety is measured for a balanced panel of 114 countries (1992-2012) using very detailed information on their exports (HS 6-digit product level). The estimation results of a dynamic spatial panel data model confirm the relevance of spatial network effects: indirect effects (spatial spillovers) strongly reinforce direct effects, while spatial proximity to large countries accelerates the diversification process. These results are robust to the choice of the weights matrix (an inverse-distance matrix, an exponential distance matrix and a matrix based on bilateral trade flows are used).
    Keywords: export diversification, economic development, panel spatial data models
    JEL: F14 F43 C31 O11
    Date: 2016
  10. By: Arne Isaksen; Franz Tödtling; Michaela Trippl
    Date: 2016
  11. By: Román Mínguez (University of Castilla-La Mancha); María L. (Carlos III University); Roberto Basile (Second University of Naples)
    Abstract: In this paper we propose an extension of the semiparametric P-Spline model to spatio-temporal data including a non-parametric trend, as well as a spatial lag of the dependent variable. This model is able to simultaneously control for func- tional form bias, spatial dependence bias, spatial heterogeneity bias, and omitted time-related factors bias. Specically, we consider a spatio-temporal ANOVA model disaggregating the trend in spatial and temporal main eects, and second and third order interactions between them. The model can include both linear and non-linear effects of the covariates, and other additional xed or random eects. Recent algorithms based on spatial anisotropic penalties (SAP) are used to estimate all the parameters in a closed form without the need of multidimensional optimization. An empirical case compares the performance of this model against alternatives models like spatial panel data models.
    Keywords: : spatio-temporal trend, mixed models, P-splines, PS-ANOVA, SAR, spatial panel.
    JEL: C33 C14 C63
    Date: 2016
  12. By: Pierre-Philippe Combes (Institut d'Études Politiques [IEP] - Paris, CEPR - Center for Economic Policy Research - CEPR, AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales); Laurent Gobillon (CEPR - Center for Economic Policy Research - CEPR, PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics, INED - Institut national d'études démographiques)
    Abstract: We propose an integrated framework to discuss the empirical literature on the local determinants of agglomeration effects. We start by presenting the theoretical mechanisms that ground individual and aggregate empirical specifications. We gradually introduce static effects, dynamic effects, and workers' endogenous location choices. We emphasise the impact of local density on productivity but we also consider many other local determinants supported by theory. Empirical issues are then addressed. Most important concerns are about endogeneity at the local and individual levels, the choice of a productivity measure between wage and TFP, and the roles of spatial scale, firms' characteristics, and functional forms. Estimated impacts of local determinants of productivity, employment, and firms' locations choices are surveyed for both developed and developing economies. We finally provide a discussion of attempts to identify and quantify specific agglomeration mechanisms.
    Keywords: Agglomeration gains,Density,Sorting,Learning,Location choices
    Date: 2014–10
  13. By: Akamatsu, Takashi; Fujishima, Shota; Takayama, Yuki
    Abstract: This study examines the properties of equilibrium, including the stability, of discrete-space agglomeration models with social interactions. The findings reveal that while the corresponding continuous-space model has a unique equilibrium, the equilibrium in discrete space can be non-unique for any finite degree of discretization by characterizing the discrete-space model as a potential game. Furthermore, it indicates that despite the above result, any sequence of discrete-space models' equilibria converges to the continuous-space model's unique equilibrium as the discretization of space is refined.
    Keywords: Social interaction; Agglomeration; Discrete space; Potential game; Stability; Evolutionary game theory
    JEL: C62 C72 C73 D62 R12
    Date: 2016–10–23
  14. 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 analyzes the impact of immigration on the dynamics of the cross-sectional distribution of GSP per capita and per worker. To achieve this we combine different approaches: on the one hand, we establish via Instrumental Variable estimation the effect of the inflow of foreign- born workers on output per worker, employment and population; on the other hand, using the Distribution Dynamics approach, we reconstruct the consequences of migration flows on convergence dynamics across US states.
    Keywords: Immigration, Convergence, Distribution Dynamics, Counterfactual Analysis
    JEL: R12 C14
    Date: 2016

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