nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒12‒03
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional strategic assets and the location strategies of emerging countries’ multinationals in Europe By Crescenzi, Riccardo; Pietrobelli, Carlo; Rabellotti, Roberta
  2. Highways, Market Access and Spatial Sorting By Stephan Fretz; Raphaël Parchet; Frédéric Robert-Nicoud
  3. Local and Non-Local Knowledge Typologies: Technological Complexity in the Irish Knowledge Space By Adam Whittle
  4. Not too close, not too far: testing the Goldilocks principle of ‘optimal’ distance in innovation networks By Fitjar, Rune Dahl; Hubert, Franz; Rodríguez-Pose, Andrés
  5. The spatial decay in commuting probabilities: employment potential vs. community gravity By Ahlfeldt, Gabriel M.; Wendland, Nicolai
  6. Local agglomeration, entrepreneurship and the 2008 recession: evidence from Italian industrial districts By Brunello, Giorgio; Langella, Monica
  7. The geography of city liveliness and consumption: evidence from location-based big data By Wu, Wenjie; Wang, Jianghao; Li, Chengyu; Wang, Mark
  8. Shifting horizons in local and regional development By Pike, Andy; Rodríguez-Pose, Andrés; Tomaney, John
  9. Trade, Merchants, and the Lost Cities of the Bronze Age By Gojko Barjamovic; Thomas Chaney; Kerem A. Coşar; Ali Hortaçsu
  10. Landlockedness and Economic Development: Analyzing Subnational Panel Data and Exploring Mechanisms By Michael Jetter; Saskia Moesle; David Stadelmann
  11. The economic effects of density: A synthesis By Ahlfeldt, Gabriel M.; Pietrostefani, Elisabetta
  12. Regional patterns of employability in the Greek Labour market By Tsampra, Maria; Bouranta, Nancy; Gkerats, Reveka
  13. Airports, market access and local economic performance: Evidence from China By Gibbons, Stephen; Wu, Wenjie
  14. Is distance dead? Face-to-face communication and productivity in teams By Battiston, Diego; Blanes i Vidal, Jordi; Kirchmaier, Thomas
  15. Effets des infrastructures de transport sur le niveau et la localisation des activités économiques By Florian Mayneris

  1. By: Crescenzi, Riccardo; Pietrobelli, Carlo; Rabellotti, Roberta
    Abstract: This paper explores the location strategies of Multinational Enterprises (MNEs) from emerging countries (EMNEs) in search for regional strategic assets. The analysis is based on a systematic comparison between EMNEs and multinationals from advanced countries (AMNEs) in order to unveil similarities and differences between these two major sources of foreign investments into the regions of the European Union. The empirical results suggest that EMNEs follow a distinct logic in their location strategies because they are attracted by the availability of technological competences only when their subsidiaries pursue more sophisticated and technology-intensive activities. Conversely EMNEs share some behavioural similarities with AMNEs in their response to the spatial agglomeration of investments.
    Keywords: innovation; regions; multinationals; European Union
    JEL: F21 F23 O33 R12 R58
    Date: 2016–02–01
  2. By: Stephan Fretz; Raphaël Parchet; Frédéric Robert-Nicoud
    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: transportation, highway, market access, income sorting
    JEL: D31 O18 H54 R11 R23
    Date: 2017–11
  3. By: Adam Whittle
    Abstract: It is now commonplace to assume that the production of economically valuable knowledge is central to modern theories of growth and regional development. At the same time, it is also well known that not all knowledge is equal, and that the spatial and temporal distribution of knowledge is highly uneven. Combing insights from Evolutionary Economic Geography (EEG) and Economic Complexity (EC) the primary aim of this paper is to investigate whether more complex knowledge is generated by local of non-local (foreign) firms. From this perspective, a series of recent contributions have highlighted the role of foreign firms in enacting structural transformation, but such an investigation has yet to account for the complexity of the knowledge produced. Exploiting information contained within a recently developed Irish patent database our measure of complexity uses a modified bipartite network to link the technologies produced within regions, to their country of origin i.e. local or non-local. Results indicate that the most complex technologies tend to be produced in a few diverse regions. For Ireland, our results indicate that the most complex technologies tend to be produced in a few diverse regions. In addition, we find that the majority of this complex knowledge is generated in technology classes where the share of foreign activity is greater than local firms. Lastly, we generate an entry model to compute the process of complex regional diversification. Here the focus is on how regions develop a comparative advantage in a technological domains more complex than those already present in that region. As such, we focus our attention only on those technologies with the highest complexity values, as these technologies are said to underpin the European UnionÕs Smart Specialisation thesis.
    Keywords: Relatedness, Technological Complexity, Diversification, Knowledge Space, Smart Specialisation, Ireland
    Date: 2017–11
  4. By: Fitjar, Rune Dahl; Hubert, Franz; Rodríguez-Pose, Andrés
    Abstract: This paper analyses how the formation of collaboration networks affects firm-level innovation by applying the ‘Goldilocks principle’. The ‘Goldilocks principle’ of optimal distance in innovation networks postulates that the best firm-level innovation results are achieved when the partners involved in the network are located at the ‘right’ distance, i.e. ‘not too close and not too far’ from one another, across non-geographical proximity dimensions. This principle is tested on a survey of 542 Norwegian firms conducted in 2013, containing information about firm-level innovation activities and key innovation partners. The results of the ordinal logit regression analysis substantiate the Goldilocks principle, as the most innovative firms are found among those that collaborate with partners at medium levels of proximity for all non-geographical dimensions. The analysis also underscores the importance of the presence of a substitution–innovation mechanism, with geographical distance problems being compensated by proximity in other dimensions as a driver of innovation, while there is no support for a potential overlap–innovation mechanism.
    Keywords: proximities; innovation; collaboration; Goldilocks principle; Norway
    JEL: J50
    Date: 2016–08–17
  5. By: Ahlfeldt, Gabriel M.; Wendland, Nicolai
    Abstract: We show that an employment potential capitalisation model produces estimates of the spatial decay in employment impact on land prices that are very close to the decay observed in commuting data.
    Keywords: Accessibility; commuting; employment; gravity; potential
    JEL: R12 R38 R48
    Date: 2016–04–28
  6. By: Brunello, Giorgio; Langella, Monica
    Abstract: We investigate whether the impact of recessions on entrepreneurship is affected by the presence of industrial districts, a source of local agglomeration economies. Using Italian Labour Force quarterly data from 2006 to 2011 and a "difference-in-differences" approach, we show that the share of entrepreneurs in local labour markets where industrial districts are present has declined more than in comparable areas after the beginning of the 2008 recession. The estimated negative differential effect ranges between 4.8 and 7.9 percent in absolute value. We examine alternative explanations - including differences in industrial specialisation and composition, access to credit propensity, exports, population density and the composition of talents - and conclude that our result is consistent with the intense social interactions typical of industrial districts, acting as a multiplier that amplifies the response to shocks.
    Keywords: industrial districts; 2008 recession; agglomeration effects
    JEL: J1
    Date: 2016–03–23
  7. By: Wu, Wenjie; Wang, Jianghao; Li, Chengyu; Wang, Mark
    Abstract: Understanding the complexity in the connection between city liveliness and spatial configurationsfor consumptive amenities has been an important but understudied research field in fast urbanising countries like China. This paper presents the first step towards filling this gap though location-based big data perspectives. City liveliness is measured by aggregated spacetime human activity intensities using mobile phone positioning data.Consumptive amenities are identified by point-of-interest data from Chinese Yelp website (dian ping). The results provide the insights into the geographic contextual uncertainties of consumptive amenities in shaping the rise and fall in the vibrancy of city liveliness.
    Keywords: big data; local linear estimator; city liveliness; consumption; China
    JEL: Q15
    Date: 2016–11
  8. By: Pike, Andy; Rodríguez-Pose, Andrés; Tomaney, John
    Abstract: Shifting horizons in local and regional development. Regional Studies. This paper aims, first, to trace the evolution of thinking about local and regional development in order to situate current debates in their sometimes neglected historical context and, second, to outline the elements of a future research agenda suited to contemporary challenges informed by the fundamental question of what kind of regional development and for whom. It shows how local and regional development has become a global challenge, but also how the approaches to it reflect shifting theories and ideologies which are mediated through particular structures of government and governance that shape diverse types of policy intervention.
    Keywords: regional development; institutions; place-based policies; development strategies
    JEL: O1 O18 R5 R58
    Date: 2017–01–01
  9. By: Gojko Barjamovic; Thomas Chaney; Kerem A. Coşar; Ali Hortaçsu
    Abstract: We analyze a large dataset of commercial records produced by Assyrian merchants in the 19th Century BCE. Using the information collected from these records, we estimate a structural gravity model of long-distance trade in the Bronze Age. We use our structural gravity model to locate lost ancient cities. In many instances, our structural estimates confirm the conjectures of historians who follow different methodologies. In some instances, our estimates confirm one conjecture against others. Confronting our structural estimates for ancient city sizes to modern data on population, income, and regional trade, we document persistent patterns in the distribution of city sizes across four millennia, even after controlling for time-invariant geographic attributes such as agricultural suitability. Finally, we offer evidence in support of the hypothesis that large cities tend to emerge at the intersections of natural transport routes, as dictated by topography.
    JEL: N15 N7 N75 R12
    Date: 2017–11
  10. By: Michael Jetter; Saskia Moesle; David Stadelmann
    Abstract: This paper revisits the hypothesis that landlocked regions are systematically poorer than regions with ocean access, using panel data for 1,527 subnational regions in 83 nations from 1950-2014. This data structure allows us to exploit within-country-time variation only (e.g., regional variation within France at one point in time), thereby controlling for a host of unobservables related to country-level particularities, such as a country's unique history, cultural attributes, or political institutions. Our results suggest lacking ocean access decreases regional GDP per capita by 10 - 13 percent. We then explore potential mechanisms and possible remedies. First, national political institutions appear to play a marginal role at best in the landlocked-income relationship. Second, the income gap between landlocked and non-landlocked regions within the same nation widens as i) GDP per capita rises, ii) international trade becomes more relevant for the nation, and iii) national production shifts to manufacturing. Finally, we find evidence consistent with the hypothesis that national infrastructure (i.e., transport-related infrastructure and rail lines) can alleviate the lagging behind of landlocked regions.
    Keywords: landlockedness, geography, GDP per capita, trade openness, infrastructure
    JEL: E43 H54 O18 O40 R12
    Date: 2017
  11. By: Ahlfeldt, Gabriel M.; Pietrostefani, Elisabetta
    Abstract: This paper synthesises the state of knowledge on the economic effects of density. We consider 15 outcome categories and 202 estimates of density elasticities from 102 studies. More than 50% of these estimates have not been previously published and have been provided by authors on request or inferred from published results in auxiliary analyses. We contribute own estimates of density elasticities of 16 distinct outcome variables that belong to categories where the evidence base is thin, inconsistent or non-existent. Along with a critical discussion of the quality and the quantity of the evidence base we present a set of recommended elasticities. Applying them to a scenario that roughly corresponds to an average high-income city, we find that a 10% increase in density in per capita and year terms is associated with a $140 increase in wage and a $243 increase in rent. The decrease in real wage net of taxes of $171 is partially compensated for by an aggregate amenity effect of $106 and there is a positive external welfare effect of $29. Density has important positive amenity and resource implications, but also appears to create a scarcity rent, which harms renters and first-time buyers.
    Keywords: compact; city; density; meta-analysis; elasticity; urban
    JEL: Q15
    Date: 2017–01
  12. By: Tsampra, Maria; Bouranta, Nancy; Gkerats, Reveka
    Abstract: Massive unemployment and underemployment has been the major implication of 2008-crisis in Europe and particularly in the most vulnerable economies, as Greece. The shock resulted to decreased job-vacancy rates and increased job-seeker rates all over Europe. In a most recent study we focus on un/underemployment to particularly explore the post-crisis demand and supply discrepancy of the Greek labour market. Seeking to provide a coherent analysis of employability patterns across regional labour markets in Greece, we analyze regional-level data (employment flows, industrial specialization and labour market specificities) and individual-level data (demographic factors, qualifications and personal attitudes). We argue that regional un/underemployment is largely attributed to the mismatch between low-skill job vacancies and job-seekers’ high qualifications.
    Keywords: Employability, labour market mismatch, regional diversity
    JEL: J21 J24 R12
    Date: 2017–07–05
  13. By: Gibbons, Stephen; Wu, Wenjie
    Abstract: In this paper we study the effect of airports on local economic performance that arises from better access to domestic markets, using China’s recent rapid air network expansion. We estimate the effects of the implied changes in access to population on measures of economic performance using a panel of counties built from administrative records and micro data on industrial firms. To mitigate endogeneity concerns we focus on a subsample of ‘incidentally’ affected counties, whose location midway between existing and new airports implies they not were explicitly targeted for development nor directly affected by airport operations. We also decompose market access into land-side and air-side components. Our key finding is that improved population access due to land-side distance reductions to airports increased industrial output and GDP, with an elasticity of around 0.25. An instrumental variables strategy exploiting conversion of historical military airports to civil use yields higher elasticities.
    Keywords: airports; infrastructure; productivity; china
    JEL: R14 J01
    Date: 2017–02
  14. By: Battiston, Diego; Blanes i Vidal, Jordi; Kirchmaier, Thomas
    Abstract: Has technology made face-to-face communication redundant? We investigate using a natural experiment in an organisation where a worker must communicate complex electronic information to a colleague. Productivity is higher when the teammates are (exogenously) in the same room and, inside the room, when their desks are closer together. We establish face-to-face communication as the main mechanism, and rule out alternative channels such as higher effort by co-located workers. The effect is stronger for urgent and complex tasks, for homogeneous workers, and for high pressure conditions.We highlight the opportunity costs of face-to-face communication and their dependence on organisational slack.
    Keywords: teamwork; face-to-face communication; distance; organisations
    JEL: R14 J01
    Date: 2017–03
  15. By: Florian Mayneris (Université du Québec à Montréal (UQAM) and UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: Cet article fait le point sur la littérature récente examinant le lien entre infrastructures de transport et niveau et localisation des activités économiques. La théorie économique montre qu’en présence de rendements croissants, la baisse des coûts de transfert favorise la concentration, puis au‐delà d’un certain seuil, la re- dispersion spatiale des activités. Les études empiriques en forme réduite confirment l’existence d’effets hétérogènes en fonction des caractéristiques des territoires et des secteurs. Elles montrent également dans certains cas l’existence d’effets de déplacements et d’irréversibilité. Les travaux en équilibre général en sont encore à leurs débuts; le choix du modèle semble déterminant pour la nature des dynamiques spatiales prédites. Les avancées académiques récentes permettent une meilleure prise en compte dans l’évaluation socio‐économique des infrastructures de transport des effets de celles‐ci sur l’efficacité productive.
    JEL: R40 R11 R12
    Date: 2017–11–27

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