nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒06‒04
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Treatment-effect identification without parallel paths: An illustration in the case of Objective 1-Hainaut/Belgium, 1994-2006 By Vandenberghe, Vincent
  2. Market Thickness, Input-Output Linkages, and Agglomeration By MIYAUCHI Yuhei; MIYAKAWA Daisuke
  3. Manufacturing productivity in China: Deconstructing the role of Agglomeration By Chen, Yang; He, Ming; Rudkin, Simon
  4. Entrepreneurship and Industrial Clusters: Evidence from China Industrial Census By Zhu, Xiwei; Liu, Ye; He, Ming; Luo, Deming; Wu, Yiyun
  5. How Deep is Your Love? A Quantitative Spatial Analysis of the Transatlantic Trade Partnership By Oliver Krebs; Michael Pflüger
  6. Vocational Schools as an Instrument of Interregional Competition – Empirical Evidence from German Counties By Ivo Bischoff; Julia Hauschildt
  7. Critical links in knowledge networks Ð What about proximities and gatekeeper organizations? Abstract: The paper analyzes links in knowledge networks that are essential for the integration and knowledge diffusion properties of the entire network. By focusing on critical links, as defined in network science, we evaluate these linksÕ properties from the perspective of the proximity and regional gatekeeper literature. We thereby gain insights into likely conditions of their emergence and functions. Moreover, we extend the dyadic perspective on regional gatekeeper organizations and link it more strongly to the network science and proximity framework literature. An empirical study applies these arguments and investigates the proximity characteristics of critical links in 132 technology-specific subsidized knowledge networks in Germany. The results show that critical links tend be formed between regional gatekeepers that offer related knowledge resources. The links bridge institutional distances by utilizing the benefits of geographic and social proximity. Length: By Tom Broekel Author-X-Name-First: Tom; Wladimir Mueller Author-X-Name-First: Wladimir
  8. Local Determinants of Foreign Direct Investment in Poland By Jaroslaw Michal Nazarczuk; Anna Krajewska
  9. Associations among employment and industries of Slovak economy By Gabriela Kolvekova; Gabriela Kolvekova

  1. By: Vandenberghe, Vincent
    Abstract: Imagine an impoverished region that becomes eligible for a generous transfer programme (the treatment). Imagine difference-in-differences analysis (DiD)-a before-and-after comparison of the income-level handicap-shows that the handicap has risen. Most observers would conclude to the policy's inefficiency. The point made in this paper is that second thoughts are needed, because DiD rests heavily on the validity of a key assumption: parallel paths in the absence of treatment. What is more, when several pre-treatment periods are available in the data, it can easily be assessed and, if necessary, abandoned in favour of more relevant ones.
    Keywords: treatment-effect analysis,difference-in-differences models,EU convergence policy
    JEL: C21 R11 R15 O52
    Date: 2017
  2. By: MIYAUCHI Yuhei; MIYAKAWA Daisuke
    Abstract: Existing literature documents strong empirical relationships between input-output linkages and geographic concentration of industries. This paper empirically assesses one micro-foundation of this phenomenon: geographic concentration of firms reduces the matching friction of firm-to-firm trade (i.e., thick-market externality). Using a panel of over one million firms in Japan with dynamic supply-chain linkage information, we find that (1) firms have more suppliers and customers in denser areas on average, and (2) when a supplier exits the market for unexpected reasons (identified by the reported reasons of bankruptcy), firms recover alternative suppliers more in thicker supplier markets. These two pieces of evidence suggest the importance of thick-market externality of firm-to-firm trade as a mechanism of agglomeration.
    Date: 2017–05
  3. By: Chen, Yang (Division of Economics, Xi'an Jiaotong-Liverpool University); He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool University); Rudkin, Simon (SHU-UTS SILC Business School, University of Shanghai)
    Abstract: Economists talk of agglomeration bene ting rms but little work has sought to understand the impact various consequences of close location of rms has on productivity. Using unconditional quantile regression for the rst time in productivity we revisit the Chinese Industry Survey, from 1999 to 2007, to ask (a) how does spatial competition, local diversity, population density and regional specialisation impact across the productivity distribution, and (b) how have these effects changed through China's opening up to foreign direct investment. High productivity firms bene t more from specialist agglomerations, monopoly and can take larger advantage of market size compared to those which are less productive.
    Keywords: Unconditional Quantile Regression, Manufacturing Productivity, China, Agglomeration.
    Date: 2017–05–24
  4. By: Zhu, Xiwei (School of Economics, Zhejiang University); Liu, Ye (School of Economics, Zhejiang University); He, Ming (Division of Economics, Xi'an Jiaotong-Liverpool University); Luo, Deming (School of Economics, Zhejiang University); Wu, Yiyun (School of Economics, Zhejiang University)
    Abstract: This article studies the synergy effect of entrepreneurship on China’s industrial clusters. We propose an extension to Duranton and Overman’s (2005) method which enables us to delimit industrial clusters in space. The empirical model is identified with historical measures of local entrepreneur potential in the spirit of Chinitz (1961). We find that measures of entrepreneurship contribute significantly to cluster formation, cluster size, and cluster strength. Access to sea ports stimulates industrial concentration but agricultural legacy has the opposite effect. Light industries have more clusters which are also larger and stronger. Clusters also benefit from historical measures of market potential, localization/urbanization economies, and urban population density. Most of the results are robust to alternative instrumental strategies. Finally, we find evidence that the synergy effect is stronger where the local conditions are favorable to clusters.
    Date: 2017–05–24
  5. By: Oliver Krebs; Michael Pflüger
    Abstract: This paper explores the effects of trade liberalization envisioned in a Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union. We use a new quantitative spatial trade model with consumptive and productive uses of land and inputoutput linkages. Our calibration draws mainly on the World Input Output Database (WIOD). The eventual outcome of the negotiations is uncertain. Tariffs in EU-US-trade are already very low, however, so that an agreement will have a major impact only by eliminating non-tariff barriers. These are extremely hard to quantify. We address these uncertainties by considering a corridor of trade liberalization paths and by providing numerous robustness checks. We find that even with ambitious liberalization, real income gains within a TTIP are in the range of up to 0.46% for most countries. The effect on outside countries is often negative, and even smaller. Taking land into account scales down the welfare effects quite strongly. Interestingly, we find that all German counties derive unambiguous welfare gains even though the model allows for negative terms-of-trade effects, in principle. Our analysis also implies that in order to arrive at the same welfare gains as under a TTIP, a multilateral liberalization would have to be much more ambitious for the US than for the EU.
    Keywords: international trade and trade policy, factor mobility, intermediate inputs, sectoral interrelations, transatlantic trade, TTIP
    JEL: F11 F16 R12 R13
    Date: 2016–12
  6. By: Ivo Bischoff (University of Kassel); Julia Hauschildt (University of Kassel)
    Abstract: The German apprenticeship system is widely known throughout the world. We analyze expenditures on vocational schools on county level using data from 213 West-German counties between 2001 and 2006. We use spatial econometrics to test for spatial correlation in counties’ expenditure on vocational schools but find no evidence that vocational schools serve as instrument in inter-county competition. While the theoretical literature suggests that spending should be higher for apprentices from small firms, we find a negative relationship between the share of apprentices from small firms and the expenditures per pupil. Expenditures are found to increase in the share of Christian Democrats in the county council.
    Keywords: vocational schools, German apprenticeship system, local public finance, spatial econometrics
    JEL: H75 R51 R58
    Date: 2017
  7. By: Tom Broekel Author-X-Name-First: Tom; Wladimir Mueller Author-X-Name-First: Wladimir
    Keywords: proximities, knowledge networks, gatekeeper, R&D subsidies, critical links
    JEL: D85 L14 O33 R10
    Date: 2017–06
  8. By: Jaroslaw Michal Nazarczuk (University of Warmia and Mazury in Olsztyn, Poland); Anna Krajewska (University of Warmia and Mazury in Olsztyn, Poland)
    Abstract: The internationalisation of economies, which foreign direct investments significantly contribute to, affects the growth of regional and local economies. Their choice of location is the topic of frequent debates among scholars, politicians and regional/local authorities. Given the scarcity of empirical evidence on the locational determinants of foreign direct investments at the local level of analysis (LAU 1) in Poland, and the time that has passed since similar analyses were run on a regional scale, we conduct a study investigating the locational determinants of FDIs in Poland between 2011 and 2015.We use a unique dataset comprising data available in public statistics and information gathered from computations run using GIS software indicating the average distances of districts to selected points of interest (such as the border, motorway/express road, airport, railway line, special economic zone, etc.). The utilisation of GIS-based data is a significant improvement to the past research, which tended to use dummy variables in this regard. To identify the key locational determinants, we run a series of negative binomial regressions, due to the count character of the dependent variable.The results prove that a significant part of the spatial distribution of FDIs in Poland can be attributed to factors originating from New Economic Geography, whereas the rest stems from the heterogeneity of local areas. The lower and more detailed scale of the analysis brings to light new facts on the choice of location as compared to previous studies, especially regarding the role of SEZs or proximity to agglomerations.
    Keywords: foreign direct investments (FDIs), location determinants, regional and spatial distribution of FDI, LAU 1, Poland
    JEL: F23 F23 R12
    Date: 2017–05
  9. By: Gabriela Kolvekova (Technical University of Kosice, Slovak Republic); Gabriela Kolvekova (Technical University of Kosice, Slovak Republic)
    Abstract: Urban areas are as important as rural ones for regional development. This paper observes especially the position of cities, urban areas in the context of global value chains – GVC. Global value chains reflect specialization and labour division of companies, mostly multinational enterprises – MNEs. MNEs can be considered for flagships of some industries. Such flagship influence suppliers and purchasers. MNEs are a part of networks or do have got an access to such networks that combine dispersion of the value chain the boundaries of the firm and across national borders and. The impetus of this humble work was to look at position of Slovak cities (Bratislava, Žilina) in order to look for sectors that can help to develop the city and its adjacent regions, particularly cross-border regions. The paper discussed how the attribute of the cross-border regions gives the cities more advantageous position in GVC. Applying method of location quotient allowed to shed a light on GVC, which cities participate in. Some cities were in a position to take advantage of participation in GVC. Examined cities are located in the western part of Slovak Republic. Discussion about the attribute of the cross-border regions can stimulate new ideas for finding causalities in city sprawl or in specialization patterns in industrial structure of the city. Discussion further fosters the comparison of two cities strengths and weakness of each of them that were summarized in terms of employment and industrial exploitation of GVC. It is the first finding and value added of the paper. Second one, method of location quotient is simple, but provides clear evidence on the regional development or decline in particular industries and time of observation.
    Keywords: employment, value chains, industry
    JEL: J21 Q01 R12
    Date: 2017–05

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