nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒05‒07
eight papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Amenities and the Social Structure of Cities By Carl Gaigné; Hans R.A. Koster; Fabien Moizeau; Jacques-François Thisse
  2. Where Is the Consumer Center of St. Petersburg? By Konstantin A. Kholodilin; Irina Krylova; Darya Kryutchenko
  3. Regional Innovation Systems and Global Flows of Knowledge By Martin, Roman; Wiig Aslesen, Heidi; Grillitsch, Markus; Herstad, Sverre
  4. Knowledge externalities and firm heterogeneity: Effects on high and low growth firms By Grillitsch, Markus; Nilsson, Magnus
  5. Market Size in Globalization By Hayato Kato; Toshihiro Okubo
  6. Exuberance in the U.K. Regional Housing Markets By Alisa Yevgenyevna Yusupova; Efthymios Pavlidis; Ivan Paya; David Alan Peel
  7. Estimating the Gains from New Rail Transit Investment: A Machine Learning Tree Approach By Seungwoo Chin; Matthew E. Kahn; Hyungsik Roger Moon
  8. The spatial autocorrelation problem in spatial interaction modelling: a comparison of two common solutions By Griffith, Daniel A.; Fischer, Manfred M.; LeSage, James P.

  1. By: Carl Gaigné (INRA, UMR1302, SMART-LERECO Rennes (France) and CREATE, Laval University, Quebec (Canada)); Hans R.A. Koster (Department of Spatial Economics, Vrije Universiteit Amsterdam (The Netherlands)); Fabien Moizeau (Université de Rennes 1, CREM UMR CNRS 6211, Condorcet Center and Institut Universitaire de France); Jacques-François Thisse (CORE-UCL (Belgium), NRU Higher School of Economics (Russia) and CEPR)
    Abstract: We develop a new model of a "featureful" city in which locations are differentiated by two attributes, that is, the distance to employment centers and the accessibility to given amenities, and we show how heterogeneous households in income are sorted out across the urban space. Under Stone-Geary preferences, the spatial income distribution is governed by a location-quality index which reflects the interaction between the amenity and commuting cost functions. The residential equilibrium typically involves the spatial separation of households sharing similar incomes. Using data on Dutch cities, we show that there is a causal relationship between the amenity level and consumer income, suggesting that richer households sort themselves into high amenity locations. We do not find strong evidence that employment accessibility leads to income segregation, suggesting that the standard monocentric city model without amenities is a poor predictor of the social structure of cities.
    Keywords: social stratification, income, amenities, commuting
    JEL: R14 R23 R53 Z13
    Date: 2017–04
  2. By: Konstantin A. Kholodilin; Irina Krylova; Darya Kryutchenko
    Abstract: In an urban economy, the distribution of people and real estate prices depends on the location of the central business district of a city. As distance from the city center increases, both prices and population density diminish, for travel costs increase in terms of time and money. As manufacturing gradually leaves the cities, the importance of consumer amenities as attractors of population to the urban areas increases. The role of a business center is being replaced by the consumer center. In this paper, we identify the location of the consumer center of St. Petersburg - the second largest city in Russia and its former capital. For this purpose using the data from open sources in the Internet regarding the location of many different types of urban amenities, the indices of their spatial density are computed. Using the weights based on coefficients of spatial variation and survey-based weights, the individual indices are aggregated to two general centrality indices. Their unique maxima correspond to the city center of St. Petersburg, which is located on Nevsky prospekt, between Fontanka river and Liteinyi prospekt.
    Keywords: St. Petersburg, urban amenities, consumer city center, kernel density estimation
    JEL: R14 R15 C43
    Date: 2017
  3. By: Martin, Roman (University of Gothenburg); Wiig Aslesen, Heidi (BI Norwegian Business School); Grillitsch, Markus (CIRCLE, Lund University); Herstad, Sverre (Inland Norway University of Applied Sciences)
    Abstract: The literature on regional innovation systems emphasizes the role of the region as locus for interactive learning and knowledge exchange, stressing the importance of (geographical) proximity for innovation (Asheim and Gertler 2005). Even though the importance of extra-regional knowledge is widely acknowledged (Trippl et al. 2015), there has been only little emphasis on the particular role and the nature of global knowledge flows. The aim of this chapter is to explore the differentiated nature of global knowledge flows in regional innovation systems. We provide an overview of the different ways firms can gain access to global knowledge sources. Identified knowledge sourcing channels include international R&D collaborations, foreign direct investments, personally embedded relationships, international mobility of skilled labour, virtual communities and online platforms, and the participation in temporary clusters such as fairs, exhibitions, and conferences (Maskell et al. 2006, Aslesen and Sardo 2016). Depending on regional innovation system preconditions, firms use and combine different knowledge sourcing channels to access global knowledge. Firms in organisationally thick and diversified regional innovation systems have a geographical advantage in accessing knowledge globally, but even firms in peripheral areas can exchange knowledge worldwide, due to improved means of transport and communication at distance. Furthermore, not only multinational companies that are dominated by analytical or synthetic knowledge bases, but even small and medium sized enterprises in symbolic industries are often deeply involved in global knowledge sourcing activities. We illustrate our arguments with interview data collected among New Media firms in southern Sweden and in the Oslo Region in Norway.
    Keywords: regional innovation systems; globalisation of innovation; knowledge sourcing; new media
    JEL: L82 L86 O19 O33
    Date: 2017–04–27
  4. By: Grillitsch, Markus (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University)
    Abstract: Knowledge externalities affect high and low growth firms differently. The paper develops two theoretical arguments. The knowledge equilibrium argument postulates that knowledge externalities weaken high growth firms for the benefit of low growth firms until performance differences vanish. The knowledge competition argument claims that high growth firms are in a better position to identify, attract, and integrate knowledge, thereby benefiting more from knowledge externalities than low growth firms. Based on 188,936 observations of 32,736 Swedish firms from 2004 to 2011, it is analyzed whether knowledge centers enable high growth firms to surge ahead or low growth firms to catch up.
    Keywords: knowledge spillovers; externalities; firm growth; competitiveness; core-periphery
    JEL: O18 O30 P48 R10 R12
    Date: 2017–04–27
  5. By: Hayato Kato (Faculty of Economics, Keio University); Toshihiro Okubo (Faculty of Economics, Keio University)
    Abstract: A salient feature of the current globalization is a loss of manufacturing in developed countries and rapid industrialization in middle-sized developing countries. This paper aims to construct a simple three-country trade and geography model with different market sizes and endogenous wage rates. The large country fosters industrial agglomeration (geographical concentration) in the early stage of globalization, but loses manufacturing in the later stage of globalization. When losing manufacturing, the large country might be worse off. Thus, the large country might have an incentive to implement welfare-maintaining policies to prevent a loss of manufacturing. All of these results can be explained by relative market sizes.
    Keywords: Agglomeration, Market size, Middle-sized country, Endogenous wages, Industry/welfare maintaining policy
    JEL: F12 F15 F20
    Date: 2017–01–08
  6. By: Alisa Yevgenyevna Yusupova; Efthymios Pavlidis; Ivan Paya; David Alan Peel
    Abstract: We combine the estimation of a structural model with inference based on recently developed recursive unit root tests to analyse the behaviour of regional real estate markets in the U.K. over the last four decades. We find two episodes, the late 1980s and the early and mid-2000s, when all regional house prices experienced explosive dynamics above and beyond factors such as housing supply relative to demographics, income, regional spillovers and credit availability. This is the first econometric analysis to provide evidence that would endorse the view that ‘bubbles’, with a particular spatial pattern, are a feature of UK regional housing markets.
    Keywords: Regional house prices, Structural housing model, Cointegration, Generalised supremum ADF, Speculative bubbles
    JEL: C22 G12 R30 R31
    Date: 2017
  7. By: Seungwoo Chin; Matthew E. Kahn; Hyungsik Roger Moon
    Abstract: Urban rail transit investments are expensive and irreversible. Since people differ with respect to their demand for trips, their value of time, and the types of real estate they live in, such projects are likely to offer heterogeneous benefits to residents of a city. Using the opening of a major new subway in Seoul, we contrast hedonic estimates based on multivariate hedonic methods with a machine learning approach that allows us to estimate these heterogeneous effects. While a majority of the "treated" apartment types appreciate in value, other types decline in value. We explore potential mechanisms. We also cross-validate our estimates by studying what types of new housing units developers build in the treated areas close to the new train lines.
    JEL: R21 R4
    Date: 2017–04
  8. By: Griffith, Daniel A.; Fischer, Manfred M.; LeSage, James P.
    Abstract: Spatial interaction models of the gravity type are widely used to describe origin-destination flows. They draw attention to three types of variables to explain variation in spatial interactions across geographic space: variables that characterize the origin region of interaction, variables that characterize the destination region of interaction, and variables that measure the separation between origin and destination regions. A violation of standard minimal assumptions for least squares estimation may be associated with two problems: spatial autocorrelation within the residuals, and spatial autocorrelation within explanatory variables. This paper compares a spatial econometric solution with the spatial statistical Moran eigenvector spatial filtering solution to accounting for spatial autocorrelation within model residuals. An example using patent citation data that capture knowledge flows across 257 European regions serves to illustrate the application of the two approaches.
    Keywords: Origin-destination flows, Spatial dependence in origin-destination flows, Spatial econometrics, Spatial filtering, Patent citation flows
    JEL: C31 R15
    Date: 2016

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