nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒06‒18
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Is there trickle-down from tech? Poverty, employment and the high-technology multiplier in US cities By Neil Lee; Andrés Rodríguez-Pose
  2. Housing Price and Population Growth across China: The Role of Housing Supply By Wang, Hongbo; Rickman, Dan S.
  3. Regional Growth Differences in China for 1995-2013: An Empirical Integrative Analysis of their Sources By Wang, Hongbo; Rickman, Dan S.
  4. Two Tales of Two U.S. States: Regional Fiscal Austerity and Economic Performance By Rickman, Dan S.; Wang, Hongbo
  5. Innovation, Skill, and Economic Segregation By Florida, Richard; Mellander, Charlotta
  6. The Geography of Economic Segregation By Florida, Richard; Mellander, Charlotta
  7. "On the regional impact of broadband on productivity: the case of Brazil" By Juan Jung; Enrique López-Bazo
  8. Cross-border Co-operation Networks in West Africa By Olivier J. Walther
  9. Is the Rent Too High? Aggregate Implications of Local Land-Use Regulation By Devin Bunten
  10. New evidence on interregional mobility of students in tertiary education: the case of Italy By Ilaria De Angelis; Vincenzo Mariani; Roberto Torrini
  11. A Two-Sector Model of Creative Capital Driven Regional Economic Growth By Batabyal, Amitrajeet; Nijkamp, Peter
  12. The R package emdi for estimating and mapping regionally disaggregated indicators By Kreutzmann, Ann-Kristin; Pannier, Sören; Rojas-Perilla, Natalia; Schmid, Timo; Templ, Matthias; Tzavidis, Nikos

  1. By: Neil Lee; Andrés Rodríguez-Pose
    Abstract: High-technology industries are seen as important in helping urban economies thrive, but at the same time they are often considered as potential drivers of poverty and social exclusion. However, little research has assessed how high-tech affects urban poverty and the wages of workers at the bottom of the pyramid. This paper addresses this gap in the literature and investigates the relationship between employment in high-tech industries, poverty and the labour market for non-degree educated workers using a panel of 295 Metropolitan Statistical Areas (MSAs) in the United States between 2005 and 2011. The results of the analysis show no real impact of the presence of high-technology industries on poverty. Yet there is strong evidence that tech-employment increases wages for non-degree educated workers and, to a lesser extent, employment for those without degrees. These results suggest that while tech employment has some role in improving welfare for non-degree educated workers, tech-employment alone is not be enough to reduce poverty.
    Keywords: High-technology industries; employment; wages; poverty; cities
    JEL: R11 R12 R58
    Date: 2016
  2. By: Wang, Hongbo; Rickman, Dan S.
    Abstract: In this paper, we employ a spatial equilibrium growth model to examine the role of housing supply for differences in housing price and population growth across the provinces, autonomous regions and municipalities of mainland China for 1999-2013. A distinguishing feature of the model used from other spatial equilibrium models is a time-varying and regionally-varying elasticity of housing supply. Regions in the East are found to have had the most inelastic housing supply, while northern regions had the most elastic housing supply. The differences in exogenous housing supply growth are shown to have significantly affected relative regional population growth over the period, suggesting that housing policies can be used to promote growth.
    Keywords: Housing supply; China; Spatial equilibrium
    JEL: R11 R12 R31
    Date: 2017–03–17
  3. By: Wang, Hongbo; Rickman, Dan S.
    Abstract: An integrative analysis of several regional economic outcome variables in China for the period of 1995-2013 reveal the major sources of regional growth differences in China. Patterns of growth in population, per capita income, gross regional product, housing prices and changes in unemployment rates are identified using principal components analysis. Regression analysis of principal component scores is applied to identify geographic patterns in the sources of the growth. The analysis suggests that shifts in labor supply largely were responsible for the regional growth differences over the period, though shifts in labor demand were nearly equally as important. The results have implications for evaluating the success of regional development policies such as the Western Development Strategy.
    Keywords: Regional growth; China; Western Development Strategy
    JEL: R11 R12 R31
    Date: 2017–03–11
  4. By: Rickman, Dan S.; Wang, Hongbo
    Abstract: The recent fiscal austerity experiments undertaken in the states of Kansas and Wisconsin have generated considerable policy interest. Using a variety of identification approaches within a difference-in-differences framework and examining a wide range of economic indicators, this paper assesses whether the experiments have spurred growth in the states as promised by the governors and legislatures which enacted them into law. The overall conclusion from the paper is that the fiscal experiments did not spur growth, and if anything, harmed state economic performance. Among the identification approaches used, the Synthetic Control Method (Abadie and Gardeazabal 2003; Abadie et al., 2010) is demonstrated to provide the most compelling evidence.
    Keywords: Fiscal austerity; State taxes; Synthetic Control Method
    JEL: H71 R12 R23
    Date: 2017–03–19
  5. By: Florida, Richard (University of Toronto); Mellander, Charlotta (Jönköping University & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: Our research examines the role of innovation and skill on the level economic segregation across U.S. metro areas. On the one hand, economic and urban theory suggest that more innovative and skilled metros are likely to have higher levels of economic segregation. But on the other hand, theory also suggests that more segregated metros are likely to become less innovative over time. We examine the connection between innovation and economic segregation this via OLS regressions informed by a Principal Component Analysis to distill key variables related to innovation, knowledge and skills, while controlling for other key variables notably population size. Our findings are mixed. While we find evidence of an association between the level of innovation and skill and the level of economic segregation in 2010, we find little evidence of an association between the level of innovation and skill across metros and the growth of economic segregation between 2000 and 2010.
    Keywords: Economic segregation; inequality; innovation; high-tech; skill; talent; human capital
    JEL: J24 O30 R23
    Date: 2017–06–07
  6. By: Florida, Richard (University of Toronto & New York University); Mellander, Charlotta (Jönköping International Business School (JIBS) & Centre of Excellence for Science and Innovation Studies (CESIS))
    Abstract: This study examines the geography of economic segregation in America. Most studies of economic segregation focus on income, but our research develops a new measure of overall economic segregation spanning income, educational, and occupational segregation which we use to examine the economic, social and demographic factors which are associated with economic segregation across US metros. Adding in the two other dimensions of educational and occupational segregation– seems to provide additional, stronger findings with regard to the factors that are associated with economic segregation broadly. Our findings suggest that several key factors are associated with economic segregation. Across the board, economic segregation is associated with larger, denser, more affluent, and more knowledge based metros. Economic segregation is related to race and to income inequality.
    Keywords: Economic Segregation; Income Inequality; Education; Occupation; Race
    JEL: I30 J10 R23
    Date: 2017–06–09
  7. By: Juan Jung (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Enrique López-Bazo (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.)
    Abstract: This paper analyses the incidence of broadband on regional productivity in Brazil, intending to find out if the economic impact is uniform across all territories of the country. The possibility of performing a regional approach, instead of the usual country-level analysis, means an opportunity to disentangle the economic impact of broadband at territories which share a common institutional and regulatory framework as are the regions inside a country. Results suggest that the impact of broadband on productivity is positive although not uniform across regions. On the one hand, it seems to depend on connection quality and network effects. Faster download speed and critical-mass accounting for network externalities in the region enhance the economic impact of broadband. On the other hand, higher productivity gains are estimated for the less developed regions. The fact that the less productive regions in Brazil seem to be benefiting more from broadband may suggest that it can constitute a factor favoring regional convergence in the country.
    Keywords: Broadband, Information and Communication Technologies, Regional Productivity. JEL classification: O33, O47, R11.
    Date: 2017–05
  8. By: Olivier J. Walther (University of Southern Denmark)
    Abstract: Long seen as artificial barriers inherited from decolonisation, West African borders now lie at the heart of policies designed to encourage regional trade and combat political instability. This rediscovery of the peripheries of the nation state has fostered a proliferation of institutional initiatives that aim to cultivate co-operation between countries, regions and municipalities while ensuring the protection and promoting the interests and rights of the people living in border regions. Despite these regional initiatives, the effective functioning of cross-border co-operation still remains largely unknown across West Africa. The purpose of this paper is to fill that gap, with an analysis of both the social structure and the geography of West African governance networks. On the basis of this structural and geographic analysis, policy recommendations are formulated aimed at implementing policies that are more place-based, more attentive to relations between the actors at play in co-operation, and more specifically adapted to the constraints and opportunities of the West African region.
    Keywords: cross-border co-operation, governance, networks, regional integration, West Africa
    JEL: O18 O19 O43 O55 R58
    Date: 2017–06–12
  9. By: Devin Bunten
    Abstract: Highly productive U.S. cities are characterized by high housing prices, low housing stock growth, and restrictive land-use regulations (e.g., San Francisco). While new residents would benefit from housing stock growth in cities with highly productive firms, existing residents justify strict local land-use regulations on the grounds of congestion and other costs of further development. This paper assesses the welfare implications of these local regulations for income, congestion, and urban sprawl within a general-equilibrium model with endogenous regulation. In the model, households choose from locations that vary exogenously by productivity and endogenously according to local externalities of congestion and sharing. Existing residents address these externalities by voting for regulations that limit local housing density. In equilibrium, these regulations bind and house prices compensate for differences across locations. Relative to the planner's optimum, the decentralized model generates spatial misallocation whereby high-productivity locations are settled at too-low densities. The model admits a straightforward calibration based on observed population density, expenditure shares on consumption and local services, and local incomes. Welfare and output would be 1.4% and 2.1% higher, respectively, under the planner’s allocation. Abolishing zoning regulations entirely would increase GDP by 6%, but lower welfare by 5.9% because of greater congestion.
    Keywords: General Equilibrium ; House Prices ; Housing Supply ; Regulation ; Urban, Rural, & Regional Economics
    JEL: R52 H73 E61
    Date: 2017–06
  10. By: Ilaria De Angelis (Bank of Italy); Vincenzo Mariani (Bank of Italy); Roberto Torrini (Bank of Italy)
    Abstract: A relatively low geographical mobility of students in the Centre and North of the country and a large incidence of movers from southern regions to universities located in the Centre and North are well-established features of the Italian academic system. Exploiting a novel administrative dataset on academic enrolments, this paper shows that the interregional mobility of Italian students has increased in recent years. We highlight that the increase in mobility, which has occurred in a period of declining entry rates, is not attributable to a change in the composition of the enrolling students. We investigate some of the main drivers of student mobility by relating regional flows to the attractiveness of universities and show that mobility is positively associated with the quality of research and teaching and with the job prospects offered by the hosting university. Student flows are instead negatively correlated with the distance between the university and the region of origin and with drop-out rates. The empirical evidence also suggests that in recent years the distance from the university of destination has become less relevant in explaining mobility, whereas the role played by university quality has increased.
    Keywords: university, student mobility, quality of research, labour market JEL Classification: I20, I23
    Date: 2017–06
  11. By: Batabyal, Amitrajeet; Nijkamp, Peter
    Abstract: We study aspects of economic growth in a region that is creative in the sense of Richard Florida. We model creativity by supposing that the region under study has two sectors. The first sector uses physical capital {K(t)} and trained workers {A(t)W(t)} to produce creative capital {R(t)}. The second sector uses physical and creative capital to produce a final consumption good {Q(t)}. In this setting, we accomplish four tasks. First, we derive the equations of motion for physical capital per trained worker (k) and creative capital per trained worker (r). Second, we find combinations of k and r for which k ̇=r ̇=0. Third, we investigate whether the economy of our creative region has a balanced growth path (BGP). Finally, assuming that our region is initially on a BGP, we study the impact of a permanent increase in the savings rate (s) on the trajectory of output per worker.
    Keywords: Balanced Growth Path, Consumption Good, Creative Capital, Creative Region, Economic Growth
    JEL: O41 R11
    Date: 2017–05–25
  12. By: Kreutzmann, Ann-Kristin; Pannier, Sören; Rojas-Perilla, Natalia; Schmid, Timo; Templ, Matthias; Tzavidis, Nikos
    Abstract: The R package emdi offers a methodological and computational framework for the estimation of regionally disaggregated indicators using small area estimation methods and provides tools for assessing, processing and presenting the results. A range of indicators that includes the mean of the target variable, the quantiles of its distribution and complex, non-linear indicators or customized indicators can be estimated simultaneously using direct estimation and the empirical best predictor (EBP) approach (Molina and Rao 2010). In the application presented in this paper package emdi is used for estimating inequality indicators and the median of the income distributions for small areas in Austria. Because the EBP approach relies on the normality of the mixed model error terms, the user is further assisted by an automatic selection of data-driven transformation parameters. Estimating the uncertainty of small area estimates (using a mean squared error - MSE measure) is achieved by using both parametric bootstrap and semi-parametric wild bootstrap. The additional uncertainty due to the estimation of the transformation parameter is also captured in MSE estimation. The semi-parametric wild bootstrap further protects the user against departures from the assumptions of the mixed model in particular, those of the unit-level error term. The bootstrap schemes are facilitated by computationally effcient code that uses parallel computing. The package supports the users beyond the production of small area estimates. Firstly, tools are provided for exploring the structure of the data and for diagnostic analysis of the model assumptions. Secondly, tools that allow the spatial mapping of the estimates enable the user to create high quality visualizations. Thirdly, results and model summaries can be exported to Excel spreadsheets for further reporting purposes.
    Keywords: offcial statistics,parallel computation,small area estimation,visualization
    Date: 2017

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