nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒03‒05
eight papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Still a long way to go: decomposing income inequality across Italy’s regions, 1871 – 2011 By Gabriele Cappelli; Emanuele Felice; Julio Martínez-Galarraga; Daniel Tirado
  2. Inter-Firm Networks and Firm Performance: The Case of Italy By Chiara Burlina
  3. Path creation, global production networks and regional development: a comparative international analysis of the offshore wind sector By Danny MacKinnon; Stuart Dawley; Markus Steen; Max-Peter Menzel; Asbjørn Karlsen; Pascal Sommer; Gard Hopsdal Hansen; Håkon Endresen Normann
  4. Shaking Up the Equilibrium: Natural Disasters, Economic Activity, and Immigration By Ager, Philipp; Hansen, Casper Worm; Lønstrup, Lars
  5. Agglomeration Economies in the Presence of an Informal Sector The Colombian Case By García, Gustavo A.
  6. One or Many Cohesion Policies of the European Union? On the Diverging Impacts of Cohesion Policy across Member States By Riccardo Crescenzi; Mara Giua
  7. Regional lobbying and structural funds. Do regional representation offices in Brussels deliver? By Andrés Rodríguez-Pose; Julie Courty
  8. Cohesion Policy Incentives for Collaborative Industrial Research. The Evaluation of a Smart Specialisation Forerunner Programme By Riccardo Crescenzi; Mara Giua; Guido de Blasio

  1. By: Gabriele Cappelli (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona); Emanuele Felice (Department of Philosophical, Pedagogical and Economic-Quantitative Sciences, Università “G. D’Annunzio” di Chieti-Pescara); Julio Martínez-Galarraga (Departament d’Anàlisi Econòmica, Universitat de València); Daniel Tirado (Departament d’Anàlisi Econòmica, Universitat de València)
    Abstract: This article is the first study to explore to what extent labour productivity, structural change, participation rates and the age structure of the population contributed to the pattern of Italy’s regional economic inequality over the long run (1871-2011). We provide brand new regional estimates of participation rates and age structures, as well as the most updated figures on per capita GDP, per worker GDP and the employment rate (at ten-year intervals spanning from 1871 to 2011). First, regional inequality in per capita GDP (Y/N) is split into labour productivity (Y/L) and labour-market features (L/N). Then, the Caselli-Tenreyro decomposition is used to explore whether labour-productivity convergence (or divergence) at the NUTS-1 level was determined within or between sectors, and by labour reallocation. While labour productivity was central to the pattern of Italy’s regional development until the 1970s, since then the key factor of North-South divergence has been the participation rate. The results confirm the central role of national and local policies, influencing per capita GDP via productivity, employment, and participation rates.
    Keywords: Regional disparities, Italy, convergence, divergence, Caselli-Tenreyro, economic history, productivity.
    JEL: R1 O11 O25 N9
    Date: 2018–01
  2. By: Chiara Burlina
    Abstract: This study investigates a particular type of network, the inter-firm network (IFN), and its impact on performances of Italian firms between 2010-2015. After revising the literature on alliances and networks for what concerns the geographical and industrial dimension, I focus my attention on networks’ performance and innovation propensity. The empirical analysis, based on a sample of about 4,000 firms, is divided in two parts: firstly, applying a “differencein- difference” technique, is tested the impact of being in an IFN; secondly, focusing on year 2013, are measured the different effects of IFN characteristics. Results demonstrate that belonging to an IFN has a positive impact on firms’ growth. Moreover, industry heterogeneity of members and internationalisation scope (rather than innovation) turn out to be the main factors increasing firm’s profitability and economic growth.
    Keywords: Inter-firm network, Alliances, Performance, Difference-in-Difference, Innovation.
    JEL: C3 L25 P25 R12
    Date: 2018–01
  3. By: Danny MacKinnon; Stuart Dawley; Markus Steen; Max-Peter Menzel; Asbjørn Karlsen; Pascal Sommer; Gard Hopsdal Hansen; Håkon Endresen Normann
    Abstract: The question of how regions and nations develop new sources of industrial growth is of recurring interest in economic geography and planning studies. From an evolutionary economic geography (EEG) perspective, new growth paths emerge out of existing economic activities and their associated assets and conditions. In response to the micro-economic and endogenous focus of much EEG research, this paper utilises a broader evolutionary perspective on path creation which stresses the dynamic interplay between four sets of factors: regional assets; key economic and organisational actors; mechanisms of path creation; and multi-scalar institutional environments and policy initiatives. Reflecting the importance of extra-regional networks and institutions, this framework is also informed by the Global Production Networks (GPN) approach, which highlights the process of strategic coupling between firms and regions and its political and institutional mediation by state institutions at different spatial scales. We deploy this framework to investigate regional path creation in the context of renewable energy technologies, focusing specifically on the offshore wind industry. We adopt a comparative cross-national approach, examining the evolution of offshore wind in Germany, the UK and Norway. Of the three cases, Germany has developed the most deep-rooted and holistic path to date, characterised by leading roles in both deployment and manufacturing. By contrast, path creation in the UK and Norway has evolved in more partial and selective ways. The UK's growth path is developing in a relatively shallow manner, based largely upon deployment and 'outside in' investment, whilst Norway?s path is emerging in an exogenous, ?inside-out? fashion around a fairly confined set of actors and deployment and supply functions. In conclusion, the paper emphasises the important role of national states in orchestrating the strategic coupling of regional and national assets to particular mechanisms of path creation.
    Keywords: Evolutionary economic geography, path creation, national states, global production networks, offshore wind, international comparative analysis
    JEL: L1 L5 O1 O25 O43 O44 R5
    Date: 2018–02
  4. By: Ager, Philipp (Department of Business and Economics); Hansen, Casper Worm (University of Copenhagen); Lønstrup, Lars (Department of Business and Economics)
    Abstract: This paper examines the long-run effects on the spatial distribution of economic activity caused by historical shocks. Using variation in the potential damage intensity of the 1906 San Francisco Earthquake across cities in the American West, we show that more severely affected cities experienced lower population growth relative to less affected cities after the earthquake. This negative effect persisted until the late 20th century. The earthquake diverted migrants to less affected areas in the region, which, together with reinforcing dynamic agglomeration effects from scale economies, left a long-lasting mark on the location of economic activity in the American West.
    Keywords: Economic geography; Location of economic activity; Migration; Natural disasters
    JEL: O15 O40 R11 R12
    Date: 2018–02–12
  5. By: García, Gustavo A.
    Abstract: This paper analyzes the relationship between agglomeration economies and productivity in the context of a developing country while taking into account the marked presence of an informal sector. Using data from Colombia, we investigate the effect of agglomeration economies on formal and informal productivity. We examine whether the informal sector achieves benefits from agglomeration economies as well as whether there are differences between the formal and informal sectors in terms of agglomeration returns. We find that agglomeration economies, measured by the density of local employment, have a significantly positive effect on productivity in the informal sector, while there is little effect in the formal sector. We estimate an elasticity of wages with respect to employment density of approximately 2% for the informal sector, which implies that informal workers in denser areas will earn approximately 11% more than those in less dense areas.
    Keywords: Agglomeration economies, informal sector, Colombia
    JEL: R12 J31 R23
    Date: 2018–01–26
  6. By: Riccardo Crescenzi; Mara Giua
    Abstract: Do regions in all Member States (MSs) of the European Union (EU) benefit from Cohesion Policy? Are regional impacts persistently diversified across countries? In order to answer these questions this paper explores how the impact of the EU Cohesion Policy on growth and employment varies across countries. A spatial Regression Discontinuity Design (RDD) makes it possible estimate distinct but fully comparable impacts for each individual MS both before the Great Recession and during recovery. The results show that Cohesion Policy has exerted a positive and significant EU-wide impact on both regional economic growth and employment. However, regional impacts are not evenly distributed across MSs. Large part of the regional growth bonus generated by Cohesion Policy is concentrated in Germany. Conversely, impacts on regional employment are confined to the United Kingdom. The picture for beneficiary regions in Southern European Member States is less rosy with positive impacts on employment in Italy until the Great Recession and on economic growth in the recovery period in Spain.
    Keywords: Cohesion policy, European Union, regions, growth, employment
    JEL: O18 R11 R58
    Date: 2018–02
  7. By: Andrés Rodríguez-Pose; Julie Courty
    Abstract: In recent years regional representation offices have proliferated in Brussels. Among the many aims of these offices are influencing the allocation and securing the transfer of European Structural and Cohesion funds to their respective regions. However, our knowledge about whether they have succeeded in this goal is limited. In this paper we assess the extent to which regional offices in Brussels have managed to affect the territorial commitment and payment of Structural and Cohesion funds for regional development beyond the main officially stated economic criteria of eligibility. The paper uses a custom-made survey of regional offices in Brussels, complemented by economic, institutional, and political data involving factors that should determine how much money is channelled to and disbursed in each region. The results of the Fixed Effects and Instrumental Variable analyses for a total of 123 regions over the period 2009-2013 highlight that the capacity - proxied by the budget and staff of the office - of the regional representation offices to influence the commitment and payment of Structural and Cohesion funds has been negligible, when not outright negative. Regional lobbying in Brussels does not lead to more funds or to an easier disbursement of regional development funds.
    Keywords: regional representation, regional offices, lobbying, European regional development policy, structural funds, EU
    JEL: D72 R51 R58
    Date: 2018–02
  8. By: Riccardo Crescenzi; Mara Giua; Guido de Blasio
    Abstract: This paper evaluates a program of subsidies for Collaborative Industrial Research (co-) funded by the EU Cohesion Policy in Italy mobilizing over 1 billion euros. This program anticipated in the 2007-2013 funding cycle some of the key features of Smart Specialization Strategy (S3) programmes, offering evidence-based insights on potential challenges to the practical application of the S3 approach. The programme was not successful in boosting investments, value added or employment of beneficiary firms. The collaborative dimension of the projects added limited value and a more generous level funding would have not improved effectiveness. However, positive impacts emerged in low tech sectors.
    Keywords: Cohesion Policy, Smart Specialisation, Policy Evaluation, Innovation, European Union
    JEL: O18 R11 R58
    Date: 2018–02

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