nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒11‒19
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Transport-Induced Agglomeration Effects: Evidence for US Metropolitan Areas By Patricia C. Melo; Daniel J. Graham
  2. Highways, Market Access, and Spatial Sorting By Fretz, Stephan; Parchet, Raphaël; Robert-Nicoud, Frédéric
  3. Location of R&D activities by vertical multinationals over asymmetric countries By José Pedro Pontes; Carlos Eduardo Lobo e Silva
  4. Growth and regional disparities in the Southern Cone, 1890-1960 By Marc Badia-Miró; Esteban Nicolini; Henry Willebald
  5. Effects of a Cash Transfer Program on Origin-Destination Migration Flows By Gabriel Lyrio de Oliveira; André Luis Squarize Chagas
  6. A Spatial Perspective on European Integration: Heterogeneous Welfare and Migration Effects from the Single Market and the Brexit By Marcel Henkel; Tobias Seidel
  7. Energy transition in Germany and regional spillovers: What triggers the diffusion of renewable energy in firms? By Horbach, Jens; Rammer, Christian
  8. Simultaneous equation models with spatially autocorrelated error components By AMBA OYON, Claude Marius; Mbratana, Taoufiki
  9. The impact of broadband and other infrastructure on the location of new business establishments By Daire McCoy, Sean Lyons, Edgar Morgenroth, Donal Palcic, Leonie Allen
  10. Heterogeneous spillovers among Spanish provinces: A generalized spatial stochastic frontier model By Gude, Alberto; Álvarez, Inmaculada C.; Orea, Luis
  11. Public R&D Subsidies: Collaborative versus Individual Place-Based Programs for SMEs By Andrea Bellucci; Luca Pennacchio; Alberto Zazzaro
  12. Can’t Keep Up with the Joneses: How Relative Deprivation Pushes Internal Migration in Austria By Stefan Jestl; Mathias Moser; Anna K. Raggl
  13. Radius Restriction and Firms' Survival: Evidence from the Coffee Franchise Industry By Yun Jeong Choi; Jee Young Kim; Min Hee You

  1. By: Patricia C. Melo; Daniel J. Graham
    Abstract: While the interaction between transport and agglomeration economies is widely accepted, there is insufficient research attempting at a direct empirical quantification. Using a balanced panel dataset for US metropolitan areas, we estimate a system of simultaneous equations to measure the indirect effect of urban agglomeration economies which arises through transport provision. Our findings suggest that public transit reinforces the effect of urban agglomeration, whereas road lane miles appearto weaken it. The results highlight the importance of public transit in supporting positive urban agglomeration externalities.
    Keywords: Transport-induced agglomeration effects, productivity, system of simultaneous equations, metropolitan areas
    JEL: R11 R12 R41
    Date: 2017–10
  2. By: Fretz, Stephan; Parchet, Raphaël; Robert-Nicoud, Frédéric
    Abstract: We design a spatial model featuring workers embodied with heterogeneous skills. In equilibrium, locations with improved market access become relatively more attractive to the high-skilled, high-income earners. We then empirically analyze the effects of the construction of the Swiss highway network between 1960 and 2010 on the distribution of income at the local level, as well as on employment and commuting by education level. We find that the advent of a new highway access within 10km led to a long-term 19%-increase of the share of high-income taxpayers and a 6%-decrease of the share of low-income taxpayers. Results are similar for employment data decomposed by education level, as well as for in- and out-commuters. Highways also contributed to job and residential urban sprawl.
    Keywords: Highway; Income sorting.; market access; Transportation
    JEL: D31 H54 O18 R11 R23
    Date: 2017–11
  3. By: José Pedro Pontes; Carlos Eduardo Lobo e Silva
    Abstract: This paper deals with the location of R&D by vertical multinational firms. By taking the colocation of laboratories and productive plants as a benchmark, we can see that the spatial separation of both emerges under two conditions – high intensity of R&D spillovers and strong size asymmetry between countries. The latter condition is effective since it is related with a rising international inequality of wages. If the spatial separation of R&D and manufacturing takes place, headquarters services (namely R&D units) will be likely located in the smaller country. The converse pattern, where laboratories are place in the larger country, may arise if production is high-tech and the localized externalities of research activity are strong. Hence, this article confirms the main results of the literature on this topic but in the context of a different framework which allows us to tackle two usually disregarded topics: the transfer cost of technology; and the direct engagement of industrial workers in R&D spillovers. These aspects are dealt with by presupposing that, in addition to a “technological” externality among researchers, there is an “educational” externality exerted by researchers upon neighbouring industrial workers. When a country loses its laboratories, the inhabitants become intellectually “impoverished” and their labour starts to have a lesser efficiency.
    Keywords: Location of R&D; Vertical Multinationals; Spillovers; Nash Equilibria in a Large Group of Agents.
    JEL: F23 O32 R12
    Date: 2017–11
  4. By: Marc Badia-Miró (Universidad de Barcelona (España).); Esteban Nicolini (Universidad Nacional de Tucumán (Argentina).; Universidad Santo Tomás de Aquino (Argentina).); Henry Willebald (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: The aim of this paper is to analyze the evolution of regional income disparities in the South American Southern Cone (SASC) in historical perspective. One of the first results of our analysis is that most of the regional inequality in this geographic area stems from differences within countries rather than from disparities across countries. The second result is that the evolution of regional inequality between the end of the 19th century and the second third of the 20th century is different in each country: while Chile shows a higher inequality and a U-shaped evolution (reduction of inequality and a slight increase in the 1960), Uruguay presents a monotonically declining inequality and Argentina exhibits a U-shaped evolution with decreasing disparities until the beginning of the 20th century and increasing inequality afterwards. When the entire subnational units are analyzed together, we find a U-shaped curve which started at the end of the 19th century with high levels of inequality, a minimum is found in the 1940s and another local maximum ended with the collapse of the Import Substitution Industrialization (ISI) polices in the 1960s-1970s. We also analyze regional convergence in the long run for the Southern Cone at both national and regional level. The existence of convergence at a national level depends on the periods and countries: while Uruguay shows convergence in all the analyzed sub-periods, the provinces of Argentina only converge during the period of the first globalization; most of the departments of Chile converge in general but the presence of outliers induces the rejection of convergence hypothesis during the first globalization. Convergence at a regional level (including all the sub-national units from the three countries in the same analysis) is accepted for the period of the first globalization but rejected for the central decades of the 20th century. The empirical findings are interpreted as the result of the combination of the varying potential of the sub-national units for taking advantage of (i) the forces of agglomeration (inducing high growth rates in the main cities and, in particular, in the administrative capitals), (ii) the abundance of natural resources, and (iii) the stimulus originated in technological change, integration (or dis-integration) to international markets and public policies for industrialization.
    Keywords: Latin America, regional convergence, regional inequality, Southern Cone
    JEL: N16 N56 N96 R12
    Date: 2017–11
  5. By: Gabriel Lyrio de Oliveira; André Luis Squarize Chagas
    Abstract: In this research we estimate the effects of the management of a cash transfer program, the Bolsa Família, on migration flows among Brazilian municipalities from 2008 to 2010. We consider the aggregated origin-destination flows coming from a Spatial Dependent Discrete Choice Model, and focus on the interest variables of release of resources and surveillance of the Program. Then, we discuss the possible lying mechanisms relating the interest variables and individual migration decisions. Each mechanism differs according to the individual status, beneficiary of the program or not, income profile, specific characteristics of its home municipality and of potential destinations. Among our results, the control variables appear in agreement with the main findings of migration literature, and the management of the program was revealed relevant to the beneficiary and potential beneficiary locational choices, specially the release of resources.
    Keywords: Migration; Origin-Destination Flow; Discrete Choice; Spatial Dependence; Bolsa Família.
    JEL: O15 R12 R23
    Date: 2017–10–31
  6. By: Marcel Henkel; Tobias Seidel
    Abstract: We use a quantitative model to study the implications of European integration for welfare and migration flows across 1,318 regions. The model suggests that an increase of trade barriers to the level of 1957 reduces welfare by about 1-2 percent on average, depending on the presumed trade elasticity. However, remote regions may face initial welfare losses of up to 4 percent causing an estimated migration of about 8 million individuals to the European core. This implies that the dismantling of trade barriers in Europe has led to a more homogeneous spatial distribution of economic activity. With regard to the Brexit, we find moderate welfare losses for the UK of -0.44 percent in the most pessimistic scenario while continental Europe’s welfare declines by 0.18 percent. In the most unfavorable scenario, about 500,000 people would leave the UK in the long run.
    Keywords: regional integration, labor mobility, spatial inequality
    JEL: F10 F12 F15 R11 R12 R13 R23
    Date: 2016
  7. By: Horbach, Jens; Rammer, Christian
    Abstract: The success of an energy turnaround towards renewables highly depends on the willingness and ability of firms to adopt energy technologies using renewable sources. Existing studies focused on the role of regulation and energy markets (e.g. the price for fossil energy) to explain the diffusion of green energy technologies. The present paper tries to give a more comprehensive view on the determinants of renewable energy innovations focusing on the crucial role of firms' regional environment (role of regional spillover effects, the greenness of a region and the regional endowment with green energy plants). We use a unique database combining the Community Innovation Survey 2014 for Germany and NUTS 3 data on renewable energy plants, the greenness of a region and other economic control variables. We find that geographical proximity to electricity production based on renewable energy sources and the orientation of a region towards 'green issues' (measured by the share of green party voters) are both major drivers for such innovations. Furthermore, our results show that in addition to regulation, government subsidies for eco-innovation, high energy costs and regional knowledge spillovers contribute to a rapid adoption of renewable energy. The reinforcing nature of this process leads to a diverging regional development of renewable energy innovations.
    Keywords: Eco-Innovation,Renewable Energy,Community Innovation Survey
    JEL: C25 O31 Q20 R11
    Date: 2017
  8. By: AMBA OYON, Claude Marius; Mbratana, Taoufiki
    Abstract: This paper develops estimators for simultaneous equations with spatial autoregressive or spatial moving average error components. We derive a limited information estimator and a full information estimator. We give the generalized method of moments to get each coefficient of the spatial dependence of each equation in spatial autoregressive case as well as spatial moving average case. The results of our Monte Carlo suggest that our estimators are consistent. When we estimate the coefficient of spatial dependence it seems better to use instrumental variables estimator that takes into account simultaneity. We also apply these set of estimators on real data.
    Keywords: Panel data, SAR process, SMA process, Simultaneous equations, Spatial error components
    JEL: C13 C33
    Date: 2017–10
  9. By: Daire McCoy, Sean Lyons, Edgar Morgenroth, Donal Palcic, Leonie Allen
    Abstract: This paper analyses the impact of broadband infrastructure, along with a range of other local charac- teristics such as motorways and other infrastructure, availability of human capital and access to third level educational facilities, on the location of new business establishments. The sample period spans the intro- duction and recent history of broadband in Ireland. The results indicate that the availability of broadband infrastructure is a significant determinant, but its effects may be mediated by the presence of suffciently high human capital in an area.
    Date: 2017–11
  10. By: Gude, Alberto; Álvarez, Inmaculada C.; Orea, Luis
    Abstract: This paper introduces new spatial stochastic frontier models to examine Spanish provinces’ efficiency and its evolution over the period 2000-2013. We use a heteroscedastic version of the spatial stochastic frontier models introduced by Glass et al. (2016) that, in addition, allows us to identify the determinants of the spatial dependence among provinces. We contribute to the heterogeneous spatial models that have been introduced in recent years, such as Aquaro et al. (2015) and LeSage and Chih (2016) allowing measures of spatial dependence specific to each observation. This feature of the model lets us rank all Spanish provinces in accordance with their degree of spatial dependence, information that will aid policymakers to better allocate public resources between provinces. The period examined is of special interest given that it coincides with a break in the economic growth tendency, which leads to a deterioration in Spain´s economic situation.
    Date: 2017
  11. By: Andrea Bellucci (European Commission - Joint Research Centre and MoFiR); Luca Pennacchio (Università di Napoli Parthenope); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.)
    Abstract: This paper provides novel empirical evidence on the effectiveness of regional research and innovation policies for small and medium-sized enterprises (SMEs). It investigated two subsidy programs implemented at the regional level in central Italy. One program targeted SMEs’ individual investments in research, and the other focused on collaborative research between SMEs and universities. Using a matched difference-in-differences approach, the empirical analysis showed that the two programs had different effects. The first was successful in stimulating additional private R&D investment and improving firms’ performance. The second had weaker effects, mostly restricted to R&D expenditure and employment. These effects were not always uniformly distributed among project participants.
    Keywords: Public Subsidies; R&D; Impact Evaluation; SMEs; Cooperation; Regional Policy.
    JEL: H25 L52 O31 O38 R58
    Date: 2017–11–12
  12. By: Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Mathias Moser; Anna K. Raggl
    Abstract: We estimate the effect of regional income inequality on emigration rates of Austrian municipalities using a unique data set that is constructed based on individual level data from Austrian administrative registers. The register-based data contain information on the municipality of residence of all individuals aged 16 and over that have their main residency in Austria, as well as their income and socio-demographic characteristics. Aggregating this information to the municipality level allows us to assess the role of relative deprivation – a measure of relative income – on top of absolute income in shaping internal migration in Austria. We find that increases in relative deprivation in a municipality lead to higher emigration from the municipality. Allowing for heterogeneous effects across income, education, and age groups reveals that the effect is stronger among those with comparably low levels of income, and among low-skilled and young individuals.
    Keywords: relative deprivation, inequality, internal migration
    JEL: D31 R23
    Date: 2017–09
  13. By: Yun Jeong Choi (Yonsei University); Jee Young Kim (Yonsei University); Min Hee You (Yonsei University)
    Abstract: This paper investigates the effects of distance restrictions on the survival of coffee shops in Korea, which were implemented by South Korea¡¯s Fair Trade Commission to limit the opening of new shops by headquarters to protect franchisees¡¯ territorial rights. Using Cox proportional hazard regression analyses, we find that the radius restriction reduced the hazard rates of all coffee shops significantly. However, selective regulation on five big brands affected interbrand competition and changed the landscape of the coffee franchise industry. Different benefits across different coffee brands also widened the gap between small brand coffee shops and the rest.
    Keywords: radius restriction, business territory, competition, survival analysis, franchise, Cox regression model, coffee industry
    JEL: L20 D21 R11
    Date: 2017–10

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