nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒06‒11
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional variation of innovation activity in Poland. The positive role of location in metropolitan areas affirmed By Tomasz; Anna Golejewska
  2. Testing for localization: A new approach By Yasusada Murata; Ryo Nakajima; Ryuichi Tamura
  3. Economic institutions and the location strategies of European multinationals in their geographic neighborhood By Andrea Ascani; Riccardo Crescenzi; Simona Iammarino
  4. Spatial Differencing: Estimation and Inference By Federico Belotti; Edoardo Di Porto; Gianluca Santoni
  5. Smooth Transition Spatial Autoregressive Models By Bo Pieter Johannes Andree; Francisco Blasques; Eric Koomen
  6. Does neighbour’s grass matter? Exploring spatial dependent heterogeneity in technical efficiency of Italian hospitals By Cavalieri, M.; Di Caro, P.; Guccio, C.; Lisi, D.;
  7. Transport Infrastructure, City Productivity Growth and Sectoral Reallocation: Evidence from China By Yang, Yang
  8. Small-Area Variation of Fertility Rates By Lauridsen, Jørgen T.
  9. Do toll-free highways foster firm formation and employment growth? Results from a quasi-natural experiment By Audretsch, David B.; Dohse, Dirk; dos Santos, João Pereira
  10. Regional Economic Competitiveness. The Case of Romania By Elena Pelinescu; Marioara Iordan; Nona Chilian; Mihaela Simionescu
  11. The UK's Regional Divide: Can Policy Make a Difference By Henry Overman
  12. The Labor Market Effects of Refugee Waves: Reconciling Conflicting Results By Clemens, Michael A.; Hunt, Jennifer

  1. By: Tomasz (Faculty of Economics, University of Gdansk; Institute for Development); Anna Golejewska (Faculty of Economics, University of Gdansk)
    Abstract: Poland’s innovation performance is unsatisfactory. In the context of the required shift of the present mostly-extensive growth paradigm to more knowledge and innovation-intensive one has to take into account the regional variation in innovative and economic activity in this middle-sized open economy in order to fine-tune its regional development and innovation policies. Using the firm-level data for manufacturing sector aggregated to NUTS3 regions as well as firm-level data from a unique qualitative survey carried out by the Institute for Development we try to identify the determinants of variation in innovative activity of firms within Poland in order to account for regional differences in particular between metropolitan and non-metropolitan regions. The analysis at aggregated NUTS3 level does not bring satisfactory results. The difference between metropolitan and non-metropolitan regions is statistically insignificant and the overall results are mixed. In the second step, we apply more sophisticated econometric methods controlling for firm-specific, sector-specific and region-specific features as suggested in the literature of the subject identifying the positive effect of location within metropolitan regions on the innovative performance of companies. Furthermore, the results point to the significance of firm-specific, internal, as well as region-specific – factors external to a firm, nonetheless, supporting the notion of regional innovation systems in which firms are embedded.
    Keywords: innovation, regional innovation system, regional economic performance, firm-level, logit model, Poisson model, negative binomial model
    JEL: O30 R11 R12 R58 C21
    Date: 2017–05
  2. By: Yasusada Murata (Nihon University Population Research Institute (NUPRI); and University Research Center, Nihon University.); Ryo Nakajima (Faculty of Economics, Keio University); Ryuichi Tamura (Faculty of Economics, Keio University)
    Abstract: Recent empirical studies document that knowledge spillovers attenuate and industry localization decays with distance. It is thus imperative to detect localization accurately especially at short distances. We propose a new approach to testing for localization that corrects the first-order bias at and near the boundary in existing methods while retaining all desirable properties at interior points. Employing the NBER U.S. Patent Citations Data File, we illustrate the performance of our localization measure based on local linear density estimators. Our results suggest that the existing kernel density methods and regression approaches can be substantially biased at short distances.
    Keywords: localization, knowledge spillovers, local linear density, boundary bias, micro-geographic data
    JEL: R12 O31
    Date: 2017–05–03
  3. By: Andrea Ascani; Riccardo Crescenzi; Simona Iammarino
    Abstract: This article investigates how the location behavior 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 Neighborhood Policy (ENP) countries and the Russian Federation. The article aims to shed new light on the heterogeneity of MNE preferences for the host countries’ regulatory settings (including labor market and business regulation), legal aspects (i.e. protection 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 random-coefficient Mixed Logit analysis 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 L20 P33 R30
    Date: 2016–06–06
  4. By: Federico Belotti (University of Rome Tor Vergata); Edoardo Di Porto (Università di Napoli Federico II, CSEF and UCFS, Uppsala University); Gianluca Santoni (CEPII)
    Abstract: Spatial differencing is a spatial data transformation pioneered by Holmes (1998) increasingly used to estimate casual effects with non-experimental data. Recently, this transformation has been widely used to deal with omitted variable bias generated by local or site-specific unobservables in a “boundary-discontinuity” design setting. However, as well known in this literature, spatial differencing makes inference problematic. Indeed, given a specific distance threshold, a sample unit may be the neighbor of a number of units on the opposite side of a specific boundary inducing correlation between all differenced observations that share a common sample unit. By recognizing that the spatial differencing transformation produces a special form of dyadic data, we show that the dyadic-robust variance matrix estimator proposed by Cameron and Miller (2014) is, in general, a better solution compared to the most commonly used estimators.
    Keywords: Spatial differencing, Boundary discontinuity, robust inference, dyadic data.
    JEL: C12 C21
    Date: 2017–06–01
  5. By: Bo Pieter Johannes Andree (VU Amsterdam and Tinbergen Institute, The Netherlands); Francisco Blasques (VU Amsterdam and Tinbergen Institute, The Netherlands); Eric Koomen (VU Amsterdam, The Netherlands)
    Abstract: This paper introduces a new model for spatial time series in which cross-sectional dependence varies nonlinearly over space by means of smooth transitions. We refer to our model as the Smooth Transition Spatial Autoregressive (ST-SAR). We establish consistency and asymptotic Gaussianity for the MLE under misspecification and provide additional conditions for geometric ergodicity of the model. Simulation results justify the use of limit theory in empirically relevant settings. The model is applied to study spatio-temporal dynamics in two cases that differ in spatial and temporal extent. We study clustering in urban densities in a large number of neighborhoods in the Netherlands over a 10-year period. We pay particular focus to the advantages of the ST-SAR as an alternative to linear spatial models. In our second study, we apply the ST-SAR to monthly long term interest rates of 15 European sovereigns over 25-year period. We develop a strategy to assess financial stability across the Eurozone based on attraction of individual sovereigns toward the common stochastic trend. Our estimates reveal that stability attained a low during the Greek sovereign debt crisis, and that the Eurozone has remained to struggle in attaining stability since the onset of the financial crisis. The results suggest that the European Monetary System has not fully succeeded in aligning the economies of Ireland, Portugal, Italy, Spain, and Greece with the rest of the Eurozone, while attraction between other sovereigns has continued to increase. In our applications linearity of spatial dependence is overwhelmingly rejected in terms of model fit and forecast accuracy, estimates of control variables improve, and residual correlation is better neutralized.
    Keywords: Dynamic panel, Threshold models, Spatial heterogeneity, Spatial autocorrelation, Urban density, Interest Rates, Monetary Stability, Sovereign Debt Crisis
    JEL: C01 R1
    Date: 2017–05–31
  6. By: Cavalieri, M.; Di Caro, P.; Guccio, C.; Lisi, D.;
    Abstract: With respect to the other dimensions of hospital behaviour, studying the presence of interaction effects on efficiency involves the issue of which approach is most appropriate to incorporate the spatial dependence in the empirical efficiency model. Using a large sample of Italian hospitals, this paper explores the presence of spatial dependence in technical efficiency. To this purpose, we employ a Spatial Stochastic Frontier Analysis (SSFA) that allows us to robustly estimate the efficiency of each hospital while considering the presence of spatial dependence. Furthermore, we employ both standard spatial contiguity matrix and spatial matrixes exploring the idea of institutional contiguity. Overall, the results suggest an insignificant role for spatial dependence in the efficiency of Italian hospitals, regardless of the specific form of spatial dependence implicit in the weights matrix.
    Keywords: technical efficiency; hospitals; spatial dependence; SSFA;
    JEL: C21 I11 D61
    Date: 2017–06
  7. By: Yang, Yang (Anderson School of Management, University of California, Los Angeles)
    Abstract: This paper examines the impact of highway expansion on aggregate productivity growth and sectoral reallocation between cities in China. To do so, I construct a unique dataset of bilateral transportation costs between Chinese cities, digitized highway network maps, and firm-level census. I first derive and estimate a market access measure for cities in China from 1995 to 2005. I then examine the channels through which the highway infrastructure affected economic outcomes. The results suggest that highways promoted aggregate productivity growth by facilitating the entry of new firms and reallocation among existing firms. I estimate the aggregate economic impact of China's national highway system and find that eliminating all highways in China would decrease aggregate productivity by 3.2%. There is also evidence that the national highway system led to a sectoral reallocation between cities in China.
    Keywords: Transport infrastructure, trade, highway, productivity, China
    JEL: F10 H54 O18 O40 R10
    Date: 2017–05–26
  8. By: Lauridsen, Jørgen T. (Department of Business and Economics, and COHERE)
    Abstract: Alike most of the Western world, the Danish fertility rate declined throughout the 20th century simultaneous to economic growth. This development, which conflicts with economic intuition, has been denoted the fertility paradox, and several studies have been devoted to resolve it. The present study analyzes the geographic variation across Danish municipalities in the fertility rate during the years 1982 to 2004. Several factors commonly believed to explain the variation in the fertility rate is found to be exerted to considerable regional variation. A model linking the fertility rate to several economic determinants is established and further modified to capture geographic small-area variation. Specifically, a positive correlation between regional levels of income and fertility is found, which contradicts the fertility paradox. Thus, the necessity of separating small-area and dynamic variation, aiming at obtain a proper interpretation of the link between fertility and its determinants, is demonstrated.
    Keywords: Spatial econometrics; Dempgraphy; Fertility; Regional population variation
    JEL: C21 J13 N30 R23
    Date: 2017–05–31
  9. By: Audretsch, David B.; Dohse, Dirk; dos Santos, João Pereira
    Abstract: The paper studies the impact of a switch from free to charged highway provision on firm numbers and private sector employment in a cross-section of Portuguese municipalities. It exploits the fact that highway tolls in Portugal were unexpectedly raised in reaction to the financial crisis to establish causality. Results from a difference-in-differences analysis indicate a significantly negative effect of highway tolls on number of firms and employment in treated municipalities vis-à-vis the control group. We also find negative effects of tolls in municipalities not directly traversed by the treated highways, with larger firms and manufacturing firms being most strongly affected.
    Keywords: infrastructure provision,regional economic development,quasi-natural experiment
    JEL: R48 L25 R12
    Date: 2017
  10. By: Elena Pelinescu (Institute of Economic Forecasting); Marioara Iordan (Institute of Economic Forecasting); Nona Chilian (Institute of Economic Forecasting); Mihaela Simionescu (Institute of Economic Forecasting)
    Abstract: The paper approaches the issue of regional competitiveness in Romania, focusing on simple tools for analysis, namely the shift-share analysis (introduced by Dunn in 1960) and specific competitiveness indicators: RCA, RCA1 and RCA2. As documented in the literature, the level of such indicators and the changes that occur in their levels are key factors for an analysis of economic and social performance at regional and sub-regional levels (D’Elia, 2005; Chilian, 2012; Iordan et al., 2014; Pelinescu, 2015). The classical form of shift-share analysis chosen by the authors envisages to “divide†the dynamics of a certain growth factor in a certain region into three components: national, sectoral and regional. Given such issues, by using the sectoral shift-share analysis of exports completed by the indices-based competitiveness analysis in the paper will be identified the regions of Romania which reveal dynamics of their economic structures conducing to high levels of external competitiveness (and, thus, to a higher degree of integration into the European Single Market), and to sustainable specializations, adequate to the requirements of building a modern economy, with high flexibility and high technological level.
    Keywords: regional competitiveness, Romanian regions and counties, comparative advantage / disadvantage indices, shift-share analysis
    JEL: F14 R12 R15
    Date: 2017–01
  11. By: Henry Overman
    Abstract: There are large variations in economic performance across the cities and regions of the UK. There is a broad North-South pattern to these disparities. But there is also substantial variation within those broad areas: some Northern cities (such as Manchester) are doing well and some Southern cities (such as Hastings) are doing relatively badly. Despite many policy initiatives by the current and previous governments, these disparities remain large and persistent. On some measures, they have widened since the global financial crisis.
    Keywords: regional divide, cities, devolution deals
    Date: 2017–06
  12. By: Clemens, Michael A. (Center for Global Development); Hunt, Jennifer (Rutgers University)
    Abstract: An influential strand of research has tested for the effects of immigration on natives' wages and em-ployment using exogenous refugee supply shocks as natural experiments. Several studies have reached conflicting conclusions about the effects of noted refugee waves such as the Mariel Boatlift in Miami and post-Soviet refugees to Israel. We show that conflicting findings on the effects of the Mariel Boatlift can be explained by a sudden change in the race composition of the Current Population Survey extracts in 1980, specific to Miami but unrelated to the Boatlift. We also show that conflicting findings on the labor-market effects of other important refugee waves can be produced by spurious correlation between the instrument and the endogenous variable introduced by applying a common divisor to both. As a whole, the evidence from refugee waves reinforces the existing consensus that the impact of immigration on average native-born workers is small, and fails to substantiate claims of large detri-mental impacts on workers with less than high school.
    Keywords: immigration, wages, unemployment, refugee, asylum, crisis, violence, conflict, labor, integration, mariel boatlift, Miami, Israel, France, Algeria
    JEL: J61 O15 R23
    Date: 2017–05

This nep-geo issue is ©2017 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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