nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒08‒13
sixteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Do Rural Migrants Benefit from Labor Market Agglomeration Economies? Evidence from Chinese Cities By Yang, Guangliang; Li, Lixing; Fu, Shihe
  2. The Role of Regional Context on Innovation Persistency of Firms By Tavassoli, Sam; Karlsson, Charlie
  3. Spatial scale of agglomeration and dispersion: Theoretical foundations and empirical implications By Akamatsu, Takashi; Mori, Tomoya; Osawa, Minoru; Takayama, Yuki
  4. What is the Role of Urban Growth on Inequality, and Segregation? The Case of Urban Argentina´s Urban Agglomerations By Goytia, Cynthia; Dorna, Guadalupe
  5. Network Effects on Labor Contracts of Internal Migrants in China: A Spatial Autoregressive Model By Baltagi, Badi H.; Deng, Ying; Ma, Xiangjun
  6. The Local Economic Impacts of Regeneration Projects: Evidence from UK's Single Regeneration Budget By Stephen Gibbons; Henry Overman; Matti Sarvimäki
  7. Urbanization and its Effects on the Happiness Domains By Cristina Bernini; Alessandro Tampieri
  8. City Size, Distance and Formal Employment Creation By O´Clery, Neave; Lora, Eduardo
  9. High-skilled workers´ segregation and productivity in Latin American cities By Garrido, Nicolás; Vargas, Miguel
  10. Creative and science oriented employees and firm innovation : a key for smarter cities? By Brunow, Stephan; Birkeneder, Antonia; Rodriguez-Pose, Andrés
  11. Income Segregation and Urban Spatial Structure: Evidence from Brazil By García-López, Miguel Ángel; Moreno-Monroy, Ana I.
  12. Basic Results of the Multiregional Health Account for Germany - Validation of Indirect Effects of the Health Economy By Schwärzler, Marion Cornelia; Kronenberg, Tobias
  13. Basic Results of the Multiregional Health Account for Germany - Validation of Direct Effects of the Health Economy By Schwärzler, Marion Cornelia; Kronenberg, Tobias
  14. Methodology of the Multiregional Health Account for Germany - An Iterative Algorithm-Based Multiregionalization Approach of Supply and Use Tables with Emphasis on Health By Schwärzler, Marion Cornelia; Kronenberg, Tobias
  15. Role of Fees in Foreign Education: Evidence from Italy By Michel beine; Marco Delogu; Lionel Ragot
  16. Measuring the Cost of Congestion in Highly Congested City: Bogotá By Akbar, Prottoy; Duranton, Gilles

  1. By: Yang, Guangliang; Li, Lixing; Fu, Shihe
    Abstract: We combine the 2005 China Inter-Census Population Survey data and the 2004 China Manufacturing Census to test whether workers, particularly rural migrants, benefit from labor market Marshallian externalities. We find that workers in general, and rural migrants in particular, benefit from labor market pooling effect (measured by total employment in a city-industry cell) and human capital externalities (measured by share of workers with a college degree or above in a city-industry cell). These findings are robust to various sorting bias tests. However, rural migrants benefit much less than do local or urban workers, possibly because rural migrants lack social networks and are discriminated doubly in terms of being both “rural” and “migrants.” Our findings have policy implications on how Chinese cities can become skilled during the rapid urbanization process coupled with global competition.
    Keywords: Rural migrants; labor market agglomeration economies; Marshallian externalities; labor market pooling; human capital externalities
    JEL: J30 J61 J71 O15 O18 R23
    Date: 2017–08–08
  2. By: Tavassoli, Sam (RMIT University); Karlsson, Charlie (KTH)
    Abstract: This paper analyses the role of regional context on innovation persistency of firms. Using five waves of the Community Innovation Survey in Sweden, we have traced firms’ innovative behaviour from 2002 to 2012, in terms of four Schumpeterian types of innovation: product, process, organizational, and marketing. Employing transition probability matrix and dynamic Probit model and controlling for an extensive set of firm-level characteristics, we find that certain regional characteristics matter for innovation persistency of firms. In particular, those firms located in regions with (i) thicker labour market or (ii) higher extent of knowledge spillover exhibit higher probability of being persistent innovators up to 14 percentage points. Such higher persistency is mostly pronounced for product innovators.
    Keywords: location; innovation; persistence; product innovations; process innovations; market innovations; organizational innovations; firms; Community Inno¬vation Survey
    JEL: D22 L20 O31 O32
    Date: 2017–08–06
  3. By: Akamatsu, Takashi; Mori, Tomoya; Osawa, Minoru; Takayama, Yuki
    Abstract: This paper revisits a wide variety of existing economic geography models in a many-region setup. It investigates the spatial scale of agglomeration and dispersion intrinsic to each model. In our unified analytical framework, these models reduce to two canonical classes: one with a global dispersion force and the other with a local dispersion force. Their formal distinction is that the former is dependent, whereas the latter is independent of the distance structure of the model. These classes exhibit two stark differences. The first difference concerns their response to transport costs: Global and local dispersion forces are triggered by higher and lower transport costs, respectively. Consequently, in a realistic model with both types of dispersion forces, a decrease in transport costs simultaneously causes both agglomeration at the global scale and dispersion at the local scale. The second difference concerns the agglomeration pattern: multiple agglomerations emerge and spread globally over the regions in the former, whereas agglomeration always takes the form of a unimodal regional distribution of mobile agents in the latter. Endogenous agglomeration mechanisms generally do not isolate the locations at which agglomerations grow or decline for a given change in transport costs. However, they offer predictions for the global spatial distribution of agglomerations as well as the local spatial extent of an individual agglomeration. This knowledge provides a consistent explanation for the set of seemingly unrelated empirical results from reduced-form regressions on regional agglomerations (e.g., Baum-Snow, 2007; Baum-Snow, Brandt, Henderson, Turner and Zhang, 2017; Duranton and Turner, 2012; Faber, 2014); it provides a new set of testable hypotheses. Moreover, our analytical framework provides formal predictions of treatment effects in the structural model-based approaches for regional agglomeration. Applications to the most standard formulations (e.g., Allen and Arkolakis, 2014; Redding and Sturm, 2008) are discussed.
    Keywords: Agglomeration, dispersion, spatial scale, multiple equilibria, bifurcation
    JEL: C62 F15 F22 R12 R13
    Date: 2017–08–08
  4. By: Goytia, Cynthia; Dorna, Guadalupe
    Abstract: We analyze the relationship between urban sprawl and changing patterns of inequality and segregation in metropolitan areas of Argentina. The existing literature has endeavored to study the determinants of the expansion of cities, but less attention has been placed in understanding the effects of this sprawl on the livelihood of the people that live in them. Understanding whether different patterns of urban extension determine both segregation and inequality is extremely relevant in the context of fast growing urban agglomerates of Latin American countries. Among other findings, we provide evidence that there is segregation of the poor and not of the rich in all urban agglomerates but in Greater Buenos Aires, where segregation of the affluent, not the poor, prevails in the areas of greater informal urban expansion, measured by the extension of informal settlements. Yet, not all the patterns of urban development and built-up growth have the same effect. More leapfrog appears to explain greater segregation -particularly of the poor- while both infill and extension are positively related to more homogeneous urban agglomerations. This means that the most disadvantaged are more evenly distributed in agglomerations that have not seen much of their sprawl due to discontinue urban expansion of their borders. Finally, we also find a positive association between more unequal municipalities and greater slum expansions. The causality of this relationship is unclear and further analysis could be promising. It might be the case that more unequal municipalities allow for institutional environments in which slums can grow faster. Or it might well be that places which have experienced more accelerated slum growth have become more unequal because of the arrival of new families that accentuates such disparities.
    Keywords: Ciudades, Desarrollo social, Desarrollo urbano, Economía, Equidad e inclusión social, Investigación socioeconómica, Pobreza,
    Date: 2016
  5. By: Baltagi, Badi H. (Syracuse University); Deng, Ying (School of International Trade and Economics, Beijing); Ma, Xiangjun (School of International Trade and Economics, Beijing)
    Abstract: This paper studies the fact that 37 percent of the internal migrants in China do not sign a labor contract with their employers, as revealed in a nationwide survey. These contract-free jobs pay lower hourly wages, require longer weekly work hours, and provide less insurance or on-the-job training than regular jobs with contracts. We find that the co-villager networks play an important role in a migrant's decision on whether to accept such insecure and irregular jobs. By employing a comprehensive nationwide survey in 2011 in the spatial autoregressive logit model, we show that the common behavior of not signing contracts in the co-villager network increases the probability that a migrant accepts a contract-free job. We provide three possible explanations on how networks influence migrants' contract decisions: job referral mechanism, limited information on contract benefits, and the "mini labor union" formed among co-villagers, which substitutes for a formal contract. In the sub-sample analysis, we also find that the effects are larger for migrants whose jobs were introduced by their co-villagers, male migrants, migrants with rural Hukou, short-term migrants, and less educated migrants. The heterogeneous effects for migrants of different employer types, industries, and home provinces provide policy implications.
    Keywords: contract, co-villager network, spatial autoregressive logit model, internal migrants
    JEL: O15 R12 J41
    Date: 2017–07
  6. By: Stephen Gibbons; Henry Overman; Matti Sarvimäki
    Abstract: We study the local economic impacts of a major regeneration programme aimed at enhancing the quality of life of local people in deprived neighbourhoods in the UK. The analysis is based on a panel of firm and area level data available at small spatial scales. Our identification strategies involve: a) exploiting the fine spatial scale of our data to study how effects vary with distance to the intervention area; and b) comparing places close to treatment in early rounds of the programme with places close to treatment in future rounds. We consider the long run impact of schemes funded between 1995 and 1997 on outcomes up to 2009. Our estimates suggest that the programme increased workplace employment in the intervention area but this had no impact on the employment rates of local residents.
    Keywords: single regeneration budget, regeneration, employment, neighbourhoods, urban policy
    JEL: R11 J08 H50
    Date: 2017–08
  7. By: Cristina Bernini (University of Bologna); Alessandro Tampieri (University of Bologna and CREA, Université du Luxembourg)
    Abstract: We analyze the effects of urbanization on the specific components of the happiness function. We exploit the dataset HADL on Italian citizens over the period 2010-2013. A multilevel approach is used to take into account of regional heterogeneity in the happiness’s determinants. We find that, in line with much of the literature, urbanization is negatively related to subjective well-being. However, the impact of urbanization changes depending on the specific happiness spheres: while satisfaction with economic conditions is not affected by urbanization, job and family satisfaction increase with urbanization. Conversely, satisfaction with health, friendship, spare time and environment decrease with urbanization.
    Keywords: subjective well-being, happiness function, urbanization, regions, multilevel models
    JEL: I31 R10
    Date: 2017
  8. By: O´Clery, Neave; Lora, Eduardo
    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 priori 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.
    Keywords: Ciudades, Educación, Investigación socioeconómica, Sector privado, Trabajo y protección social,
    Date: 2016
  9. By: Garrido, Nicolás; Vargas, Miguel
    Abstract: The aim of this work is to study the relationship between high-skilled workers’ segregation and productivity in Latin American cities. This relationship is not clear at first sight. On the one hand high-skilled workers’ spatial concentration would take advantage of agglomeration economies and cause positive spillovers amongst the most advantaged that could compensate productivity losses due the existence of low-skilled workers ghettos. On the other hand, it would be the case that those spillovers are not enough for compensating the worse-off groups’ productivity losses, and hence the aggregated productivity would be negatively affected. We calculate this group segregation for a group of Latin American countries’ most important cities. We found a negative and significant relationship amongst cities’ productivity and high-skilled workers segregation. However, we found evidence of a quadratic relationship between segregation and productivity as well.
    Keywords: Ciudades, Investigación socioeconómica, Trabajo y protección social,
    Date: 2016
  10. By: Brunow, Stephan (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Birkeneder, Antonia; Rodriguez-Pose, Andrés
    Abstract: "This paper examines the link between the endowment of creative and science based STEM - Science, Technology, Engineering and Mathematics - workers and the level of the firm and firm- and city-/regional-level innovation in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities 'smarter'. The empirical analysis is based on a probit estimation, covering 115,000 plant-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers." (Author's abstract, IAB-Doku) ((en))
    Date: 2017–08–02
  11. By: García-López, Miguel Ángel; Moreno-Monroy, Ana I.
    Abstract: We estimate the effect of urban spatial structure on income segregation in Brazilian cities between 2000 and 2010. Our results show that, first, local density conditions increase income segregation: the effect is higher in monocentric cities and smaller in polycentric ones. Second, the degree of monocentricity-polycentricity also affects segregation: while a higher concentration of jobs in and around the CBD decreases segregation in monocentric cities, a higher employment concentration in and around subcenters located far from the CBD decreases segregation in polycentric cities. Third, results are heterogeneous according to city size: local density does not increase segregation in small (monocentric) cities, it increases segregation in medium size cities, and it decreases segregation in large (polycentric) cities. Finally, results also differ between income groups: while local density conditions increase the segregation of the poor, a more polycentric configuration reduces the segregation of the rich.
    Keywords: Ciudades, Desarrollo urbano, Investigación socioeconómica,
    Date: 2016
  12. By: Schwärzler, Marion Cornelia; Kronenberg, Tobias
    Abstract: The Multiregional Health Account is a methodological enhancement of the National Health Account and adds a subnational regional dimension to the latter. Both satellite accounts aim to quantify the contribution of the German health economy in terms of gross value added, employment and trade. Moreover, since they are based on supply and use tables and thus input-output tables of the national accounting system, both models allow input-output analysis for a more thorough evaluation of the national and multiregional health economy. The challenge addressed in this paper consists in questioning the reliability of the results from multiregional input-output analysis based on the Multiregional Health Account. This is necessary due to the circumstance that no official multiregional input-output tables are available for German federal states and we elaborated a new methodology to derive multiregional tables on our own. Hence, we conduct input-output analysis to evaluate the performance of the multiregional input-output table in modelling intra- and interregional interdependencies. We find that the model succeeds in reproducing certain regional characteristics.
    Keywords: Input-output analysis, regionalization, satellite account, health economy, Germany, supply and use tables, SUT-RAS
    JEL: C67 E01 I15 R11 R15
    Date: 2017–05
  13. By: Schwärzler, Marion Cornelia; Kronenberg, Tobias
    Abstract: The Multiregional Health Account is a satellite account focusing on the economic impact of the health economy in German federal states. It was developed as an enhancement of the existing National Health Account for Germany. In contrast to the subject of matter over here, the calculations of the National Health Account are based on available national supply and use tables. Since there are no according tables available for the German federal states, we developed a methodology, which allows to calculate supply and use tables at the subnational multiregional level. The present paper focusses on the results of the MRHA for the reason of a thorough validation procedure of the developed approach. We evaluate regional direct effects of the health economy by comparing derived characteristics with company data and evaluate the performance of the algorithm in a time series. We find that the elaborated approach shows reasonable results in both dimensions evaluated.
    Keywords: national accounts, satellite account, health economy, Germany, regionalization, supply and use tables, SUT-RAS
    JEL: C67 E01 I15 R11 R15
    Date: 2017–05
  14. By: Schwärzler, Marion Cornelia; Kronenberg, Tobias
    Abstract: The Multiregional Health Account is a methodological enhancement of the National Health Account for Germany. The latter represents an established and annually updated satellite account quantifying the economic contribution of the health economy in terms of gross value added, employment and interna-tional trade. Its methodological enhancement to a multiregional framework for the 16 federal states of Germany is represented by multiregional supply and use tables. This setting allows to compile a multire-gional health input-output table and subsequently to carry out input-output analysis. Hence, we are able to quantify the direct and indirect economic impacts of the health economy to analyze interdependencies between industries and federal states. For the purpose of compiling the Multiregional Health Account, we elaborate a new approach based on the SUT-RAS algorithm (Temurshoev & Timmer, 2011), which we adapt for the multiregional framework. We call it the MR-SUT-RAS algorithm. The methodology and its application in the context of the health economy is the subject of this contribution.
    Keywords: Input-Output analysis, regionalization, multi-regional supply and use tables, SUT-RAS, health economy, Germany
    JEL: C67 E01 I11 I18 R15
    Date: 2017–05
  15. By: Michel beine (CREA, Université du Luxembourg); Marco Delogu (CREA, Université du Luxembourg); Lionel Ragot (Université Paris Nanterre)
    Abstract: This paper studies the determinants of international students' mobility at the university level, for using specifically on the role of tuition fees. We derive a gravity model from a Random Utility Maximization model of location choice for international students in the presence of capacity constraints of the hosting institutions. The last layer of the model is estimated using new data on student migration flows at the university level for Italy. We control for the potential endogeneity of tuition fees through a classical IV approach based on the status of the university. We obtain evidence for a clear and negative effect of fees on international student mobility and confirm the positive impact of the quality of the education. The estimations also support the important role of additional destination-specific variables such as host capacity, the expected return of education and the cost of living in the vicinity of the university.
    Keywords: Foreign students; Tuition fees; Location choice; University Quality
    JEL: F22 H52 I23 O15
    Date: 2017
  16. By: Akbar, Prottoy; Duranton, Gilles
    Abstract: We provide a novel approach to estimate the deadweight loss of congestion. We implement it for road travel in the city of Bogotá using information from a travel survey and counterfactual travel data generated from Google Maps. For the supply of travel, we find that the elasticity of the time cost of travel per unit of distance with respect to the number of travelers is on average about 0.06. It is close to zero at low levels of traffic, then reaches a maximum magnitude of about 0.20 as traffic builds up and becomes small again at high levels of traffic. This finding is in sharp contrast with extant results for specific road segments. We explain it by the existence of local streets which remain relatively uncongested and put a floor on the time cost of travel. On the demand side, we estimate an elasticity of the number of travelers with respect to the time cost of travel of 0.40. Although road travel is costly in Bogotá, these findings imply a small daily deadweight loss from congestion, equal to less than 1% of a day’s wage.
    Keywords: Ciudades, Investigación socioeconómica, Transporte,
    Date: 2017

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