nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒03‒12
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. New regional identities in a global world By Bailly, Antoine
  2. The Path to Labor Formality: Urban Agglomeration and the Emergence of Complex Industries By Andres Gomez-Lievano; Eduardo Lora; Neave O'Clery
  3. Apprentice poaching in regional labor markets By Stockinger, Bastian; Zwick, Thomas
  4. The determinants of coagglomeration: Evidence from functional employment patterns By Behrens, Kristian; Guillain, Rachel
  5. Why the Current Tax Rate Tells You Little: Competing For Mobile and Immobile Firms By Langenmayr, Dominika Irma; Martin, Simmler
  6. Core-Periphery vs Home Market Effect: Trade in the Traditional Sector and the Demand Advantage By Sergey Kichko
  7. Job Changes and Interregional Migration of Graduates By Haußen, Tina; Haussen, Tina
  8. City Size, Distance and Formal Employment By Eduardo Lora; Neave O'Clery
  9. Social theory, economic geography, space and place: reflections on the work of Ray Hudson By Diane Perrons

  1. By: Bailly, Antoine
    Abstract: Regional movements are emerging in Europe, often to promote historical, cultural or economic regions. Are we going to have a new regional Europe with 60 regions instead of 27 nation-states?
    Keywords: regions,regional geography,centralisation,federation,confederation
    JEL: R11
    Date: 2017
  2. By: Andres Gomez-Lievano (Center for International Development at Harvard University); Eduardo Lora (Center for International Development at Harvard University); Neave O'Clery (Center for International Development at Harvard University)
    Abstract: Labor informality, associated with low productivity and lack of access to social security services, dogs developing countries around the world. Rates of labor (in)formality, however, vary widely within countries. This paper presents a new stylized fact, namely the systematic positive relationship between the rate of labor formality and the working age population in cities. We hypothesize that this phenomenon occurs through the emergence of complex economic activities: as cities become larger, labor is allocated into increasingly complex industries as firms combine complementary capabilities derived from a more diverse pool of workers. Using data from Colombia, we use a network-based model to show that the technological proximity (derived from worker transitions between industry pairs) of current industries in a city to potential new complex industries governs the growth of the formal sector in the city. The mechanism proposed has robust strong predictive power, and fares better than alternative explanations of (in)formality.
    JEL: B5 D8 J2 J4 O1 R1
    Date: 2016–10
  3. By: Stockinger, Bastian; Zwick, Thomas
    Abstract: A number of studies have found that firms provide less training if they are located in regions with strong labor market competition. This finding is usually interpreted as evidence of a higher risk of poaching in these regions. Yet, there is no direct evidence that regional competition is positively correlated with poaching. Building on a recently established approach to ex-post identify poaching of apprenticeship completers, our paper is the first to directly investigate the correlation between regional labor market competition and poaching. Using German adminis-trative data, we find that competition indeed increases training establishments' probability of becoming poaching victims. However, poaching victims do not change their apprenticeship training activity in reaction to past poaching. Instead, our findings indicate that the lower training activity in competitive regions can be attributed to lower retention rates, a less adverse selection, and lower labor and hiring costs of apprenticeship completers hired from rivals.
    Keywords: poaching,firm-sponsored training,apprenticeship,regional labor markets,labor market competition
    JEL: J24 M51 M53 R23
    Date: 2017
  4. By: Behrens, Kristian; Guillain, Rachel
    Abstract: Locations differ horizontally in the industry mix they host and vertically in the value-chain functions they perform. Since industry pairs should coagglomerate the functions that interact intensively across industries, analyzing horizontal and vertical patterns can improve our understanding of agglomeration mechanisms. We find that different functions within the same industry pairs display substantially different coagglomeration patterns. While production coagglomerates at longer distances, management and research coagglomerates at short distances. These patterns are consistent with our findings that buyer-supplier links and local labor pools are important for production, whereas they matter less for management and research that rely on shared knowledge. Our results provide support for agglomeration theories and show that extant estimates of average effects based on total employment mask substantial heterogeneity.
    Keywords: agglomeration mechanisms; coagglomeration; Duranton-Overman index; functional specialization
    JEL: L60 R12
    Date: 2017–02
  5. By: Langenmayr, Dominika Irma; Martin, Simmler
    Abstract: This paper analyses if, and to which extent, firms anticipate future tax rate changes. The weight of future tax rates in firms' location decisions may explain differences in the sensitivity of firms' location decision to current tax rates. Firms with high relocation costs, for example, are more sensitive to expected future changes in the tax rate, as they find it more costly to react to tax rate increases later. Governments react to this behavior by increasing the corporate tax rate if the share of firms with high relocation costs is high. We first derive these effects in a simple model and then test for them empirically, using the evolution of a new and highly immobile industry (wind turbines) for identification.
    JEL: H25 H71 F21
    Date: 2016
  6. By: Sergey Kichko (National Research University Higher School of Economics)
    Abstract: We study the role of (i) initial differences in shares of immobile workers between countries which stand for the agglomeration forces, and (ii) positive trade costs in the traditional sector which are related to the dispersion forces, in shaping the spatial pattern of the developed and transition countries. We show that on the trade liberalization path in skill-intensive industries, keeping high trade barriers in less skill-intensive sectors is enough to protect a transition country from de-industrialization. If trade liberalization in a skill-intensive sector is accompanied by decreasing trade barriers in the traditional sector, the developed country has a higher probability to become a Core. When partial agglomeration is stable, it is characterized by the Home Market Eect (HME).
    Keywords: Core-Periphery model, partial agglomeration, Home Market Eect, mo- nopolistic competition
    JEL: R12 R13
    Date: 2017
  7. By: Haußen, Tina; Haussen, Tina
    Abstract: We empirically analyze job changes and related location choices for graduates in Germany and its determinants. Using a longitudinal, representative survey-based dataset, we not only observe the transition of graduates to the labor market but also every subsequent job change within five years after graduation. Contrary to what is often assumed in the literature, our findings show that around 75% of the graduates have more than one job within our observation period and for a non-negligible share of them, job changes are related to interregional migration. Whereas job changes mostly depend on the field of study and previous employment conditions, migration is predominantly affected by previous migration paths and regional characteristics.
    JEL: J61 R11 I23
    Date: 2016
  8. By: Eduardo Lora (Center for International Development at Harvard University); Neave O'Clery (Center for International Development at Harvard University)
    Abstract: Cities thrive through the diversity of their occupants because the availability of complementary skills enables firms in the formal sector to grow, delivering increasingly sophisticated products and services. The appearance of new industries is path dependent in that new economic activities build on existing strengths, leading cities to both diversify and specialize in distinct areas. Hence, the location of necessary capabilities, and in particular the distance between firms and people with the skills they need, is key to the success of urban agglomerations. Using data for Colombia, this paper assesses the extent to which cities benefit from skills and capabilities available in their surrounding catchment areas. Without assuming a prioria a definition for cities, we sequentially agglomerate the 96 urban municipalities larger than 50,000 people based on commuting time. We show that a level of agglomeration equivalent to between 45 and 75 minutes of commuting time, corresponding to between 62 and 43 cities, maximizes the impact that the availability of skills has on the ability of agglomerations to generate formal employment. Smaller urban municipalities stand to gain more in the process of agglomeration. A range of policy implications are discussed.
    Date: 2016–10
  9. By: Diane Perrons
    Abstract: Economic geography, at its best, deploys economic and social theory to make sense of the economic, political and social transformation of regions and their impact on people’s lives and opportunities. Nowhere is this approach more evident than in the work of Ray Hudson, who has consistently focused on analysing the processes of combined and uneven development to explain the broad changes in the capitalist economy together with middle-level theories to account for the complexity of regional development in practice. In so doing he has created a powerful Geographical Political Economy that provides a deep understanding of the last four decades of economic restructuring and industrial transformation of the North-East Region of England and its impact on the lives of people living there. This article reflects on this aspect of Ray Hudson’s work in the context of his broader contributions to the academy.
    Keywords: Economic geography; space; place; social theory
    JEL: N0
    Date: 2017–01–23

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