nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒02‒26
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional development in the context of economic reform: The case of Limassol By Benner, Maximilian; Hirth, Jana; Kraatz, Fabian; Ludwig, Katja; Schrade, Jessi
  2. A spatial regression approach to FDI in Vietnam: province-level evidence By Esiyok, Bulent; Ugur, Mehmet
  3. The role of innovation and agglomeration for employment growth in the environmental sector By Horbach, Jens; Janser, Markus
  4. High-skilled migration and agglomeration By Pekkala Kerr, Sari; Kerr, William; Özden, Çağlar; Parsons, Christopher
  5. Climate Change, Internal Migration and the Future Spatial Distribution of Population: A Case Study of New Zealand By Michael P. Cameron
  6. Bankruptcy Spillovers By Shai Bernstein; Emanuele Colonnelli; Xavier Giroud; Benjamin Iverson
  7. Spatial Price Discrimination and Privatization on Vertically Related Markets By Eleftheriou, Konstantinos; Michelacakis, Nickolas
  8. The cognitive and geographical structure of knowledge links and how they influence firms’ innovation performance By Broekel, Tom; Boschma, Ron
  9. Persistence of Regional Entrepreneurship: Causes, Effects, and Directions for Future Research By Michael Fritsch; Michael Wyrwich
  10. Can urban renewal policies reverse neighborhood ethnic dynamics? By Nicolas González Pampillón; Jordi Jofre-Monseny; Elisabet Viladecans-Marsal
  11. Do negative externalities have any impact on population agglomerations? Evidence from Urban India By Tripathi, Sabyasachi; Kaur, Shupinder

  1. By: Benner, Maximilian; Hirth, Jana; Kraatz, Fabian; Ludwig, Katja; Schrade, Jessi
    Abstract: Regional development occurs in the larger context of national economies. Thus, the elaboration of regional economic development strategies cannot be separated from higher-level economic policy which frames and conditions opportunities and risks for regional development. As a Southern European country undergoing a process of profound structural economic reform, Cyprus provides a case for a policy context aiming towards the emergence of a new model of economic growth. Within this context, the Limassol region as one of the country’s major economic centers with a number of comparatively strong industries can serve as an example of how to promote regional development in the framework of national reform priorities such as moving the national economy closer towards a knowledge- and innovation-driven model. The present study analyses current reform priorities on the national and supra-national level, takes stock of the regional economic structure of Limassol district, and presents some preliminary ideas that could be further explored if and when a comprehensive regional economic development strategy for Limassol were to be elaborated.
    Keywords: regional development; regional policy; smart specialisation; smart specialization; clusters; tourism; economic reform; Limassol; Lemesos; Cyprus; European Union
    JEL: L52 L53 L66 L83 L85 L86 L88 O14 O25 O31 O38 O52 Q18 R11 R30 R58
    Date: 2017–02–14
  2. By: Esiyok, Bulent; Ugur, Mehmet
    Abstract: Foreign direct investment (FDI) flows into Vietnam have increased significantly in recent years and are distributed unequally between provinces. This paper aims to investigate the locational determinants of FDI in 62 Vietnamese provinces and whether spatial dependence is a significant factor that both researchers and policy-makers should take into account. We report that province-specific percapita income, secondary education enrolment, labor costs, openness to trade, and domestic investment affect FDI directly within the province itself and have indirect effects on FDI in neighboring provinces. The direct and indirect effects coexist with spill over effects and spatial dependence between provinces. Our findings indicate that FDI in Vietnam reflects a combination of complex vertical and export platform motivations on the part of foreign investors; and an agglomeration dynamics that may perpetuate the existing regional disparities in the distribution of FDI capital between provinces.
    Keywords: Foreign direct investment; spatial dependence; agglomeration; Vietnam
    Date: 2015–11–23
  3. By: Horbach, Jens; Janser, Markus
    Abstract: The environmental sector is supposed to yield a dual benefit: its goods and services are in-tended to tackle environmental challenges and its establishments should create new jobs. However, it is still unclear in empirical terms whether that really is the case. This paper investigates to what extent employment growth in establishments with green products and services is higher compared to other establishments. Furthermore, the main factors determining labor demand in this field are analyzed. We use linked employment and regional data for Germany. The descriptive results show that the environmental sector is characterized by disproportionately high employment growth. The application of a generalized linear mixed model reveals that especially innovation and industry agglomeration foster employment growth in establishments in the environmental sector. Establishments without green products and services show a smaller increase in employment, even if they are also innovative.
    JEL: J21 Q55 R23
    Date: 2016
  4. By: Pekkala Kerr, Sari; Kerr, William; Özden, Çağlar; Parsons, Christopher
    Abstract: This paper reviews recent research regarding high-skilled migration. We adopt a data-driven perspective, bringing together and describing several ongoing research streams that range from the construction of global migration databases, to the legal codification of national policies regarding high-skilled migration, to the analysis of patent data regarding cross-border inventor movements. A common theme throughout this research is the importance of agglomeration economies for explaining high-skilled migration. We highlight some key recent findings and outline major gaps that we hope will be tackled in the near future.
    JEL: F15 F22 J15 J31 J44 L14 L26 O31 O32 O33
    Date: 2017–02–13
  5. By: Michael P. Cameron (University of Waikato)
    Abstract: This paper evaluates the impact of climate change on the future spatial distribution of population in New Zealand, with a focus on the effects of climate variables on internal migration dynamics. Specifically, a gravity modelling framework is first used to identify climate variables that have statistically significant associations with internal migration. The gravity model is then embedded within a cohort-component population projection model to evaluate the effect of different climate change scenarios on regional populations. Three climate variables are found to have statistically significant associations with internal migration: (1) mean sea level pressure in the destination; (2) surface radiation in the origin; and (3) wind speed at ten metres at the destination. Including these variables in the population projection model makes a small difference to the regional population distribution, and the difference between different climate scenarios is negligible. Overall, the results suggest that, while statistically significant, climate change will have a negligible effect on the population distribution of New Zealand at the regional level.
    Keywords: climate change; internal migration; gravity model; New Zealand
    JEL: J11 Q54 R23
    Date: 2017–02–21
  6. By: Shai Bernstein; Emanuele Colonnelli; Xavier Giroud; Benjamin Iverson
    Abstract: How do different bankruptcy approaches affect the local economy? Using U.S. Census microdata at the establishment level, we explore the spillover effects of reorganization and liquidation on geographically proximate firms. We exploit the random assignment of bankruptcy judges as a source of exogenous variation in the probability of liquidation. We find that within a five-year period, employment declines substantially in the immediate neighborhood of the liquidated establishments, relative to reorganized establishments. Most of the decline is due to lower growth of existing establishments and, to a lesser extent, reduced entry into the area. The spillover effects are highly localized and concentrate in the non-tradable and service sectors, particularly when the bankrupt firm operates in the same sector. These results suggest that liquidation leads to a reduction in consumer traffic to the local area and to a decline in knowledge spillovers between firms. The evidence is inconsistent with the notion that liquidation leads to creative destruction, as the removal of bankrupt businesses does not lead to increased entry nor the revitalization of the area.
    JEL: G33 R12
    Date: 2017–02
  7. By: Eleftheriou, Konstantinos; Michelacakis, Nickolas
    Abstract: We consider a vertically structured market with two retail firms of mixed ownership competing against each other exercising spatial price discrimination. We examine the strategic behavior of downstream rivals as well as the effect of privatization on the intensity of competition and welfare in two cases; when location decisions are taken sequentially and when location decisions are taken simultaneously. We show that production cost differentials are crucial in determining the Nash equilibrium locations (hence market shares) and the impact of the degree of privatization on the level of downstream competition. Privatization leads to stiffer competition when the mixed ownership firm has the cost advantage. However, it can be welfare enhancing only when decisions are taken sequentially with the follower being the semi-public firm having a moderate production cost advantage over the market leader. The results of our model generalize to capture the case of vertical mergers.
    Keywords: mergers; mixed oligopoly; privatization; spatial competition
    JEL: L13 L33 L42 R32
    Date: 2017–02–19
  8. By: Broekel, Tom; Boschma, Ron
    Abstract: Firms’ embeddedness in knowledge networks has received much attention in literature. However, little is known about the structure of firms’ knowledge exchange with respect to different types of proximities. Based on survey data of 295 firms in 8 European regions, we show that firms’ knowledge exchange systematically differs in their geographical and cognitive dimensions. We find that firms’ innovation performance is enhanced if the firm primarily links to technologically related as well as technologically similar organizations. Connecting with organizations at different geographical levels yields positive effects as well.
    Keywords: geographical proximity knowledge networks technological relatedness innovation performance
    JEL: D85 O18 O33
    Date: 2017–02
  9. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Michael Wyrwich (School of Economics and Business Administration, Friedrich-Schiller-University Jena)
    Abstract: This paper reviews the empirical evidence of persistent levels of regional self-employment and new business formation and the effect this persistence has on development. It is argued that a regional culture of entrepreneurship plays an important role in explaining persistence of entrepreneurship. We discuss possible explanations for the emergence of a culture of entrepreneurship, and how it becomes self-perpetuating over time. Finally, we draw policy implications and identify some promising avenues for further research.
    Keywords: Entrepreneurship, economic development, entrepreneurship culture, institutions
    JEL: L26 R11 O11
    Date: 2017–02–23
  10. By: Nicolas González Pampillón (Universitat de Barcelona & IEB); Jordi Jofre-Monseny (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB & CEPR)
    Abstract: This paper assesses the impact on neighborhood population dynamics of a major urban renewal policy implemented in Catalonia (Spain) between 2004 and 2010. Some of the most deprived neighborhoods in the region received large investments in their public spaces and facilities with the aim of attracting natives and high income individuals and of reducing the concentration of poverty and immigration. The control group comprises rejected projects and projects accepted towards the end of the program that, due to a fall in public tax revenues, were never executed. The results suggest that the urban renewal projects had little (if any) effects on population dynamics, suggesting that substantial investment in deprived neighborhoods is insufficient to attract natives and/or high income households. Interestingly, the sole exception were the interventions made in Barcelona’s historic districts, where the policy seems to have augmented ongoing processes of urban revival into its most deprived neighborhoods furthering processes of gentrification.
    Keywords: Place-based policies, income mixing, neighborhood segregation
    JEL: R23 R30 R58
    Date: 2017
  11. By: Tripathi, Sabyasachi; Kaur, Shupinder
    Abstract: India’s current haphazard unplanned urbanization has brought in its wake myriad problems like increase in number of vehicles, energy consumption, air pollution, noise pollution, violence, traffic congestion, traffic injuries and fatalities etc. In this perspective, the present paper tries to analyze and evaluate the trends and patterns of the different forms of urban negative externalities. It also measures the impact of negative externalities on city population agglomeration in India. In the absence of reliable city level data, the paper focuses only on 42 class I (population one lakh or more) cities in India and bases the analysis on four types of urban negative externalities i.e., number of registered motor vehicles, air pollution, road accidents, and crimes. The trends and patterns analysis suggests that urban India is currently witnessing a higher increase in the number and density of registered vehicles, air pollution, road accidents and also crimes. The OLS regression results show that negative externalities such as city wise air pollution, number of registered motor vehicles (measured by tractors and trucks density), and city-wise number of crimes have a negative effect on city population agglomerations. However, number of accidents, car density and total number of buses show a positive effect on city population agglomerations. Finally, this paper seeks to highlight the role of eco friendly public transport systems funded by the government in curbing urban negative externalities in India.
    Keywords: Urbanization, negative externalities, economic growth, India.
    JEL: R11 R12 R40
    Date: 2017–02–17

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