nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒10‒15
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Localized Knowledge Spillovers: Evidence from the Spatial Clustering of R&D Labs and Patent Citations By Buzard, Kristy; Carlino, Gerald A.; Hunt, Robert M.; Carr, Jake; Smith, Tony E.
  2. Dismantled once, diverged forever? A quasi-natural experiment of Red Army misdeeds in post-WWII Europe By Christian Ochsner
  3. Location Choices of Graduate Entrepreneurs By Larsson, Johan P; Wennberg, Karl; Wiklund, Johan; Wright, Mike
  4. What drives migration moves across urban areas in Spain? Evidence from the Great Recession By Celia Melguizo; Vicente Royuela
  5. Commuting, Migration and Local Employment Elasticities By Ferdinando Monte; Stephen Redding; Esteban Rossi-Hansberg
  6. Land-Use Regulations, Property Values, and Rents: Decomposing the Effects of the California Coastal Act By Severen, Christopher; Plantinga, Andrew
  7. European Disparities in Regional Health R&I Performance By Monica Plechero; Claudio Cozza; Raquel Ortega-Argiles
  8. Regional Effects of Publicly Sponsored R&D Grants on SME Performance By Gustavsson Tingvall, Patrik; Videnord, Josefin
  9. Do local governments tax homeowner communities differently? By Füss, Roland; Lerbs, Oliver
  10. German Model or German Models? The spatial distribution of capital and labour in the corporate governance of stock listed companies By Scholz, Robert
  11. Oil Price Shocks and Economic Growth in the Us By Michael Alexeev; Yao-Yu Chih
  12. Business Cycles and Start-ups across Industries: an Empirical Analysis for Germany By Alexander Konon; Michael Fritsch; Alexander Kritikos
  13. Immigrants' Residential Choices and their Consequences By Christoph Albert; Joan Monras

  1. By: Buzard, Kristy (Syracuse University); Carlino, Gerald A. (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia); Carr, Jake (The Ohio State University); Smith, Tony E. (University of Pennsylvania)
    Abstract: Patent citations are a commonly used indicator of knowledge spillovers among inventors, while clusters of research and development labs are locations in which knowledge spillovers are particularly likely to occur. In this paper, we assign patents and citations to newly defined clusters of American R&D labs to capture the geographic extent of knowledge spillovers. Our tests show that the localization of knowledge spillovers, as measured via patent citations, is strongest at small spatial scales and diminishes rapidly with distance. On average, patents within a cluster are about three to six times more likely to cite an inventor in the same cluster than one in a control group. At the same time, the strength of knowledge spillovers varies widely between clusters. The results are robust to the specification of patent technological categories, the method of citation matching and alternate cluster definitions.
    Keywords: spatial clustering; geographic concentration; R&D labs; localized knowledge spillovers; patent citations
    JEL: O31 R12
    Date: 2017–10–03
  2. By: Christian Ochsner
    Abstract: I study the economic consequences of the Red Army’s misdeeds after WWII. I exploit differences in spatial economic activity across the arbitrarily drawn and only for 74 days lasting liberation demarcation line between the Red Army and the Western Allies in South Austria. Dismantling and pillaging, but also (sexual) crimes made regions liberated by the Red Army a less desirable place to live and to start economic activities compared to adjacent regions. Spatial regression discontinuity (RD) estimates show that the liberation causes a relative population decline by around 26 to 31 percent until the present day. Measures of labor productivity also lag behind in Red Army liberated regions. I explain persistence with the selective migration pattern across the demarcation line in the direct aftermath of WWII.
    Keywords: Regional economic activity, population shock, dismantling, Red Army, Austria
    JEL: J11 N14 N94 R12 R23
    Date: 2017
  3. By: Larsson, Johan P (Jönköping International Business School); Wennberg, Karl (The Ratio Institute); Wiklund, Johan (Whitman School of Management); Wright, Mike (Imperial College London South Kensington Campus)
    Abstract: We review complementary theoretical perspectives on location choices of university graduate entrepreneurs derived from the individual-opportunity nexus and local embeddedness perspectives on entrepreneurship. Analysis of the full population of 215,388 graduates from Swedish institutions of higher education between 2002 and 2006 provides support for both location choice perspectives. Overall, 63 % of graduate entrepreneurs start businesses locally in their region of graduation while 37 % start businesses elsewhere. The likelihood of starting locally is substantially higher in metropolitan regions, if the graduate was born locally or has university peer entrepreneurs and entrepreneurial family members in the region of graduation. Implications for theory and public policy are discussed.
    Keywords: Entrepreneurship; Location choice; Universities
    JEL: J61 M13 O18
    Date: 2017–08–07
  4. By: Celia Melguizo (AQR-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.); Vicente Royuela (AQR-IREA, University of Barcelona. Diagonal Av. 690, 08034, Barcelona, Spain.)
    Abstract: In Spain, economic disparities between regions have traditionally played a relevant role in migration. Nevertheless, during the previous high-instability period, analyses provided conflicting results about the effect of these variables. In this work, we aim to determine the role that labour market factors play in internal migration during the Great Recession, paying special attention to the migration response of the heterogeneous population groups. To do so, we resort to an extended gravity model and we consider as a territorial unit the 45 Spanish Functional Urban Areas. Our results point to real wages as having a significant influence on migration motivations.
    Keywords: Migration, Spanish urban areas, Labour market factors
    JEL: C23 J61 R23
    Date: 2017–10
  5. By: Ferdinando Monte (Georgetown University); Stephen Redding (Princeton University); Esteban Rossi-Hansberg (Princeton University)
    Abstract: We provide theory and evidence that the elasticity of local employment to a labor demand shock is heterogeneous depending on the commuting openness of the local labor market. We develop a quantitative general equilibrium model that incorporates spatial linkages in goods markets (trade) and factor markets (commuting and migration). We quantify this model to match the observed gravity equation relationships for trade and commuting. We find that empirically-observed reductions in commuting costs generate welfare gains of around 3.3 percent. We provide separate evidence in support of the model's predictions using decompositions of employment changes, million dollar plants, and trade shocks.
    Keywords: labor supply elasticity, shocks, general equilibrium, spatial linkages
    JEL: F12 F14 R13 R23
    Date: 2017–10
  6. By: Severen, Christopher (Federal Reserve Bank of Philadelphia); Plantinga, Andrew (University of California, Santa Barrbara)
    Abstract: Land-use regulations can lower real estate prices by imposing costs on property owners, but may raise prices by restricting supply and generating amenities. We study the effects of the California Coastal Act, one of the nation’s most stringent land-use regulations, on prices and rents for multifamily housing units. The Coastal Act applies to a narrow section of the California coast, allowing us to compare properties on either side of the jurisdictional boundary. The Coastal Act offers several advantages for measuring the effects of land-use regulations, including plausible exogeneity of the boundary location, which we confirm using historical data on boundary placement, and orthogonality of the boundary to other jurisdictional divisions. Extending previous studies, we decompose the effects of the regulation into a local effect, the net price effect of restrictions on the subject property and its immediate neighbors, and an external effect, the value of amenities generated by restrictions on all properties within the regulated area. Data on multifamily housing rents are used to isolate the effect of restrictions on adjacent properties (the neighbor effect). Our analysis of multifamily housing prices reveals local and external effects of approximately +8% and +5%, respectively. The rent analysis indicates a zero neighbor effect, which suggests that the local benefits of the Coastal Act have not yet materialized but are expected to in the future. This interpretation of our results is supported by additional evidence on building ages and assessed building and land values.
    Keywords: land use regulation; housing prices; California Coastal Commission
    JEL: Q24 R14 R31 R38 R52
    Date: 2017–10–05
  7. By: Monica Plechero (Dept. of Management, Università Ca' Foscari Venice); Claudio Cozza (Istituto Ricerche, AREA Science Park); Raquel Ortega-Argiles (City-REDI, Birmingham Business School)
    Abstract: Health represents one of the thematic priorities for smart specialisation. Until now the difficulty in properly measuring research and innovation (R&I) in Health sector has represented a barrier to address specific policies in favour of less performing regions. This is due to two factors: a lack of available data particularly at regional level; and the difficulty in clearly defining the boundaries of the Health sector. Data provided by European Commission, focusing on Health as FP7 thematic priority, as well as recent data on ongoing clinical trials and Health infrastructure at regional level developed by university of Trieste allow the use of a novel regional and sectorial breakdown to deeper investigate the mechanisms supporting R&I in European Regions. The paper provides an analysis of possible determinants of EU regional Health R&I inequalities, disentangling the factors related to publications propensity from those related to patents propensity. The results show that despite one of the most relevant determinants of R&I in the Health sector remain the level of R&D expenditure, other factors such as the size or degree of Health specialisation of the region should also be taken into account. While patenting activity in this sector remains a prerogative of regions with already technological and industry capacity, publications activities result less context specific being present also in peripheral regions. Our results are in line with the new place-based smart specialisation- type policy thinking.
    Keywords: Health, patents, scientific publications, regions, smart specialisation, Europe
    JEL: O33 O34 R11 R58
    Date: 2017–10
  8. By: Gustavsson Tingvall, Patrik (The Ratio Institute); Videnord, Josefin (The Ratio Institite)
    Abstract: This paper explores regional variation in the effects of publicly sponsored R&D grants on SME performance. The results suggest that there is no guarantee that the grants will impact firm growth, either positive or negative. Studying the heterogeneity of the results, positive growth effects are most likely to be found for publicly sponsored R&D grants targeting SMEs located in regions abundant with skilled labor, whereas the opposite is found for SMEs located in regions with a limited supply of skilled workers.
    Keywords: R&D grants; SME; Economic growth; Regional growth; Selective policies
    JEL: H81 O18 O38 O40 R11 R58
    Date: 2017–04–18
  9. By: Füss, Roland; Lerbs, Oliver
    Abstract: This paper investigates whether and how strongly the share of homeowners in a community affects residential property taxation by local governments. Different from renters, homeowners bear the full property tax burden irrespective of local market conditions, and the tax is more salient to them. "Homeowner communities" may hence oppose high property taxes in order to protect their housing wealth. Using granular spatial data from a complete housing inventory in the 2011 German Census and historical war damages as a source of exogenous variation in local homeownership, we provide empirical evidence that otherwise identical jurisdictions charge significantly lower property taxes when the share of homeowners in their population is higher. This result is invariant to local market conditions, which suggests tax salience as the key mechanism behind this effect. We find positive spatial dependence in tax multipliers, indicative of property tax mimicking by local governments.
    Keywords: homeownership,public financing,residential property tax,spatial tax mimicking,yardstick competition
    JEL: D72 H20 H31 H71 R31
    Date: 2017
  10. By: Scholz, Robert
    Abstract: In the varieties of capitalism literature, Germany is understood as a monolithic model of a coordinated market economy. This analysis shows how institutions for configuring capital and labour at the national level are implemented at state and regional level. By focussing on the labour side this article gives a contribution to the investor dominated shareholder value discussion. It identifies a spatial distinction between capital and labour and concludes a variation of German Models instead of one German Model.
    Keywords: Corporate Governance,Labour-Management Relations,Political Economy,Size and Spatial Distributions of Regional Economic Activity,Unternehmensführung,Arbeitgeber-Arbeitnehmer-Beziehungen,Politische Ökonomie,Räumliche Verteilung regionalökonomischer Aktivitäten
    JEL: G34 J53 P16 R12
    Date: 2017
  11. By: Michael Alexeev (Indiana University); Yao-Yu Chih (Texas State University)
    Abstract: We apply both conventional and spatial techniques to panel data for US states to examine the effects of plausibly exogenous oil price shocks on economic growth. Contrary to the oil curse claims, we find that oil price shocks have numerically moderate but highly statistically significant positive direct effects on growth while the indirect effects are insignificant. We also find that positive impact of oil occurs only in states with a high value of the economic freedom index. In a technical contribution to the spatial econometrics literature we propose a procedure for estimating marginal effects of oil price shocks in a model with interaction terms. In addition, we show that the cumulative direct oil price effects on economic growth are persistent over time.
    Keywords: oil curse, regional economic growth, spatial lags
    Date: 2017–10
  12. By: Alexander Konon (German Institute for Economic Research (DIW Berlin)); Michael Fritsch (FSU Jena); Alexander Kritikos (German Institute for Economic Research (DIW Berlin), University of Potsdam, IZA, and IAB)
    Abstract: We analyze whether start-up rates in different industries systematically change with business cycle variables. We mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and non-innovative industries. Entries into the large-scale industries, including the innovative part of the manufacturing sector, are more strongly influenced by changes in the cyclical component of unemployment, while entries into small-scale industries, like the knowledge intensive services, are merely influenced by changes in the cyclical component of GDP. Business formation may therefore have a stabilizing effect on the economy.
    Keywords: New business formation, Entrepreneurship, business cycle, manu- facturing, services, innovative industries
    JEL: L26 E32 L16 R11
    Date: 2017–10–04
  13. By: Christoph Albert (UPF); Joan Monras (CEMFI and CEPR)
    Abstract: This paper investigates the causes and effects of the spatial distribution of immigrants across US cities. We document that: a) immigrants concentrate in large, high-wage, and expensive cities, b) the earnings gap between immigrants and natives is higher in larger and more expensive cities, and c) immigrants consume less locally than natives. In order to explain these findings, we develop a simple quantitative spatial equilibrium model in which immigrants consume (either directly, via remittances, or future consumption) a fraction of their income in their countries of origin. Thus, immigrants not only care about local prices, but also about price levels in their home country. Hence, if foreign goods are cheaper than local goods, immigrants prefer to live in high-wage, high-price, and high-productivity cities, where they also accept lower wages than natives. Using the estimated model we show that current levels of immigration have reduced economic activity in smaller, less productive cities by around 3 percent while they have expanded the activity in large and productive cities by around 4 percent. This has increased total aggregate output per worker by around .15 percent.
    Keywords: Immigration, location choices, spatial equilibrium
    JEL: F22 J31 J61 R11
    Date: 2017–10

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