nep-geo New Economics Papers
on Economic Geography
Issue of 2017‒12‒18
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Spatial Patterns of Development: A Meso Approach By Michalopoulos, Stelios; Papaioannou, Elias
  2. Analysing and predicting micro-location patterns of software firms By Kinne, Jan; Resch, Bernd
  3. Linguistic Distance, Networks and Migrants’ Regional Location Choice By Julia Bredtmann; Klaus Nowotny; Sebastian Otten
  4. Urban Structures with Forward and Backward Linkages By Pascal Mossay; Pierre M. Picard; Takatoshi Tabuchi
  5. The Expenditure of Tourist at the level of Destinations: An application of Spatial Econometrics By Andrés Artal-Tur; Luisa Alamá-Sabater
  6. Urban sprawl and local fiscal burden: analysing the Spanish case By Laura Varela-Candamio; Fernando Rubiera Morollón; Gohar Sedrakyan
  7. Commuting and Sickness Absence By Laszlo Goerke; Olga Lorenz
  8. Between Malthus and the industrial take-off: regional inequality in Sweden, 1571-1850 By Enflo, Kerstin; Missiaia, Anna
  9. Quantile Approach for Distinguishing Agglomeration from Firm Selection in Stata By KONDO Keisuke
  10. Introduction to Spatial Econometric Analysis: Creating spatially lagged variables in Stata By KONDO Keisuke

  1. By: Michalopoulos, Stelios (Federal Reserve Bank of Minneapolis); Papaioannou, Elias (London Business School)
    Abstract: Over the last two decades, the literature on comparative development has moved from country-level to within-country analyses. The questions asked have expanded, as economists have used satellite images of light density at night and other big spatial data to proxy for development at the desired level. The focus has also shifted from uncovering correlations to identifying causal relations, using elaborate econometric techniques including spatial regression discontinuity designs. In this survey we show how the combination of geographic information systems with insights from disciplines ranging from the earth sciences to linguistics and history has transformed the research landscape on the roots of the spatial patterns of development. We discuss the limitations of the luminosity data and associated econometric techniques and conclude by offering some thoughts on future research.
    Keywords: Development; Language; Ethnicity; History; Borders; Luminosity; Regression discontinuity; Regions
    JEL: N00 N9 O10 O43 O55
    Date: 2017–12–11
  2. By: Kinne, Jan; Resch, Bernd
    Abstract: While the effects of non-geographic aggregation on inference are well studied in economics, research on geographic aggregation is rather scarce. This knowledge gap together with the use of aggregated spatial units in previous firm location studies result in a lack of understanding of firm location determinants at the microgeographic level. Suitable data for microgeographic location analysis has become available only recently through the emergence of Volunteered Geographic Information (VGI), especially the OpenStreetMap (OSM) project, and the increasing availability of official (open) geodata. In this paper, we use a comprehensive dataset of three million street-level geocoded firm observations to explore the location pattern of software firms in an Exploratory Spatial Data Analysis (ESDA). Based on the ESDA results, we develop a software firm location prediction model using Poisson regression and OSM data. Our findings demonstrate that the model yields plausible predictions and OSM data is suitable for microgeographic location analysis. Our results also show that non-aggregated data can be used to detect information on location determinants, which are superimposed when aggregated spatial units are analysed, and that some findings of previous firm location studies are not robust at the microgeographic level. However, we also conclude that the lack of high-resolution geodata on socio-economic population characteristics causes systematic prediction errors, especially in cities with diverse and segregated populations.
    Keywords: Firm Location,Location Factors,Software Industry,Microgeography,OpenStreetMap (OSM),Prediction,Volunteered Geographic Information (VGI)
    JEL: R12 L86 R30
    Date: 2017
  3. By: Julia Bredtmann (RWI, IZA, CReAM); Klaus Nowotny (University of Salzburg, Austrian Institute of Economic Research WIFO); Sebastian Otten (University College London, CReAM, RWI)
    Abstract: This paper analyzes the interaction between migrant networks and linguistic distance in the location choice of migrants to the EU at the regional level. We test the hypothesis that networks and the ability to communicate in the host country language, proxied by linguistic distance, are substitutes in the location decision. Based on individual level data from a special evaluation of the European Labour Force Survey (EU-LFS) and a random utility maximization framework, we find that networks have a positive effect on the location decisions while the effect of linguistic distance is negative. We also find a strong positive interaction effect between the two factors: networks are more important the larger the linguistic distance between the home country and the host region, and the negative effect of linguistic distance is smaller the larger the network size. In several extensions and robustness checks, we show that this substitutable relationship is extremely robust.
    Keywords: Location choice, ethnic networks, linguistic distance, EU migration,multilateral resistance
    JEL: F22 J61 R23
    Date: 2017–12
  4. By: Pascal Mossay (Newcastle University, United Kingdom); Pierre M. Picard (CREA, Université du Luxembourg); Takatoshi Tabuchi (University of Tokyo, Japan)
    Abstract: We study urban structures driven by demand and vertical linkages in the presence of increasing returns to scale. Individuals consume local urban varieties and firms use these varieties to produce a national good. We prove the existence of a spatial equilibrium and obtain an invariance result according to which more intense demand or vertical linkages have the same effect on the urban structure as lower commuting costs. Various urban configurations can emerge exhibiting a mono- centric, an integrated, a duocentric, or a partially integrated city structure. We discuss the role of commuting and transport costs, intensities of demand and vertical linkages, and urbanization in affecting these patterns. We show that multiple equilibria may arise in equilibrium involving the monocentric city and up to a couple of duocentric and partially integrated structures.
    Keywords: Urban spatial structure, demand and vertical linkages, monopolistic competition, land
    JEL: R12 R14 R31
    Date: 2017
  5. By: Andrés Artal-Tur (Economics Department, Technical University of Cartagena, Spain); Luisa Alamá-Sabater (Iidl and Economics Department, Universitat Jaume I, Castellón, Spain)
    Abstract: In this paper we introduce the geographical dimension in the study of tourist expenditure. By relying on spatial statistics and spatial econometrics framework, we account for spatial dependence patterns arising in the modelling of factors driving spendings of tourists at destinations. In doing so, we extend the scope in traditional microeconometric models, also computing indirect effects arising in the spatial model. We provide evidence on the performance of the spatial expenditure approach by using a data set of around 100000 questionnaires of international visitors reaching 1872 destinations in Spain in year 2014. We employ five types of spatial model specifications when testing our tourist expenditure function. We also account for endogeneity issues by running GS2SLS and SPGMM spatial equations. Results confirm the relevance of the proposed methodology in the study of tourist expenditure behaviour in space. Regarding the main results of the econometric modeling section, length of stay appears to be the most important determinant of tourist expenditure, as well as trip characteristics and the type of accommodation chosen. The relevance of spatial effects also are being explained by the indirect spillovers that have shown that agglomeration and spatial interaction effects in tourist expenditure clusters in Spain would be responsible of around 15% of average direct spending.
    Keywords: tourist expenditure, spatial dependence, endogeneity, spillover effects, tourism policy.
    JEL: C31 R12
    Date: 2017
  6. By: Laura Varela-Candamio (C+D Jean Monnet Group & RIFDE – University of A Coruna, Spain); Fernando Rubiera Morollón (REGIOlab – University of Oviedo, Spain); Gohar Sedrakyan (International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University)
    Abstract: Urban sprawl is rapidly occurring in many Spanish urban areas. The objective of this paper is to evaluate how the trend of building dispersion of new residential areas may be affecting the fiscal stability of local Spanish governments. The high variability of the characteristics of Spanish urban areas as well as the existence of very similar local fiscal structures made this case particularly interesting. A precise index of urban sprawl, calculated with geo-referenced digital cartography, was used. Utilising spatially desegregated information of taxes from the Spanish National Institute for Fiscal Studies allowed for a measure of fiscal burden by local areas and the ability to distinguish among types of taxes. Control variables were also available at the local level from the Spanish Census and other databases. Quantile Regressions methodology supplementing Ordinary Least Square regressions assessed the discrepancy in the results and in the conclusions of the studied distributions. The results indicate that higher levels of urban sprawl imply higher local fiscal burden. This is especially clear in the higher part of the local fiscal burden distribution. By tax categories, the phenomenon of urban sprawl particularly affects local indirect taxation. Based on these results, local decision-makers should consider that urban planning is also a fundamental tool to assure long-term local fiscal stability.
    Date: 2017–12
  7. By: Laszlo Goerke (Institute for Labour Law and Industrial Relations in the European Union IAAEU), Trier University); Olga Lorenz (Institute for Labour Law and Industrial Relations in the European Union IAAEU), Trier University)
    Abstract: We investigate the causal effect of commuting on sickness absence from work using German panel data. To address reverse causation, we use changes in commuting distance for employees who stay with the same employer and who have the same residence during the period of observation. In contrast to previous papers, we do not observe that commuting distances are associated with higher sickness absence, in general. Only employees who commute long distances are absent about 20% more than employees with no commutes. We explore various explanations for the effect of long distance commutes to work and can find no evidence that it is due to working hours mismatch, lower work effort, reduced leisure time or differences in health status.
    Keywords: sickness absence, absenteeism, commuting, health, labour supply
    JEL: I10 J22 R2 R40
    Date: 2017–12
  8. By: Enflo, Kerstin (Department of Economic History, Lund University); Missiaia, Anna (Department of Economic History, Lund University)
    Abstract: The causes and extent of regional inequality in the process of economic growth are at the core of historical economic research. So far, much attention has been devoted to studying the role of industrialization in driving regional divergence. But empirical studies on relatively unequal countries such as Italy or Spain show that inequality was already high when their modern industrialization began (Felice, 2011; Rosés et al., 2010). This paper studies the extent and drivers of pre-industrial inequality for the first time with reference to a pre-industrial European economy. Using new estimates of regional GDP for the regions of Sweden for the period 1571-1850 (Enflo and Missiaia, 2017), we find that regional inequality increased dramatically between 1571 and 1750 and stayed high until the mid-19th century. This result discards the view that industrial take-off was the main driver of regional divergence. Decomposing the Theil index for GDP per worker, we find that the bulk of inequality from 1750 onwards was driven by structural differences across sectors rather than different regional productivity within sectors. We then show that counties with higher agricultural productivity followed a classic Malthusian pattern in its population dynamics when experiencing technological advancement, while ones with higher industrial productivity did not. The difference in the two sectors is what boosted pre-industrial regional inequality. We suggest that institutional factors such as the creation of the Swedish Empire, the monopoly trading rights for Stockholm and the protective industrial policy explain this exceptional pattern.
    Keywords: regional GDP; Sweden; long-run regional inequality; pre-industrial regional development; Malthusian dynamics
    JEL: N01 N13 N93
    Date: 2017–12–12
  9. By: KONDO Keisuke
    Abstract: Firms and workers, on average, are more productive in larger cities. One possible explanation which has been studied for a long time is that firms and workers in larger cities benefit from agglomeration economies. Another possible explanation is that the higher concentration of economic activities in larger cities forces tougher competition, and less productive firms cannot survive there. To distinguish agglomeration from firm selection, Combes et al. (2012, "The productivity advantages of large cities: Distinguishing agglomeration from firm selection," Econometrica, vol. 80) newly propose a quantile approach. This paper introduces the estquant command that implements their quantile approach in Stata. Our Monte Carlo experiments emphasize the importance of simultaneously considering agglomeration and selection.
    Date: 2017–03
  10. By: KONDO Keisuke
    Abstract: This article introduces the new Stata command spgen, which computes spatially lagged variables in Stata. The only additional information required to implement this command are the latitude and longitude of regions. More importantly, the spgen command facilitates spatial econometric analysis in Stata. In this paper, I offer an interesting illustration for spatial econometric analysis using the spgen command.
    Date: 2016–01

This nep-geo issue is ©2017 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.