nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒03‒26
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Why do industries coagglomerate? How Marshallian externalities differ by industry and have evolved over time By Dario Diodato; Frank Neffke; Neave O?Clery
  2. A biography of Paul Krugman: contributions to Geography and Trade By José M. Gaspar
  3. What Drives the Geography of Jobs in the US? Unpacking Relatedness By Teresa Farinha Fernandes; Pierre-Alexandre Balland; Andrea Morrison; Ron Boschma
  4. Foreign-owned firms as agents of structural change in regions: the case of Hungary 2000-2009 By Zoltán Elekes; Ron Boschma; Balázs Lengyel
  5. Regional Economic Development in Europe, 1900-2010: a description of the Patterns By Rosés, Joan R.; Wolf, Nikolaus
  6. Spatial Poverty and Inequality in South Africa: A Municipality Level Analysis By Anda David; Nathalie Guilbert; Nobuaki Hamaguchi; Yudai Higashi; Hiroyuki Hino; Murray Leibbrandt; Muna Shifa
  7. The local economic impacts of regeneration projects: Evidence from UK’s Single Regeneration Budget By Gibbons, Steve; Overman, Henry; Sarvimäki, Matti
  8. On the evolution of the Castel Goffredo hosiery cluster: A life cycle perspective By Giulio Carli; Andrea Morrison
  9. Three pillars of urbanization: Migration, aging, and growth By Grafeneder-Weissteiner, Theresa; Prettner, Klaus; Südekum, Jens
  10. What Shapes Local Innovation Policies? Empirical Evidence from Japanese Cities By OKAMURO, Hiroyuki; NISHIMURA, Junichi

  1. By: Dario Diodato; Frank Neffke; Neave O?Clery
    Abstract: The fact that firms benefit from close proximity to other firms with which they can exchange inputs, skilled labor or know-how helps explain why many industrial clusters are so successful. Studying the evolution of coagglomeration patterns, we show that which type of agglomeration benefits firms has drastically changed over the course of a century and differs markedly across industries. Whereas, at the beginning of the twentieth century, industries tended to colocate with their value chain partners, in more recent decades the importance of this channels has declined and colocation seems to be driven more by similarities industries? skill requirements. By calculating industry-specific Marshallian agglomeration forces, we are able to show that, nowadays, skill- sharing is the most salient motive in location choices of services, whereas value chain linkages still explain much of the colocation patterns in manufacturing. Moreover, the estimated degrees to which labor and input-output linkages are reflected in an industry?s coagglomeration patterns help improve predictions of city-industry employment growth.
    Keywords: Coagglomeration, Marshallian externalities, labor pooling, value chains, manufacturing, services, regional diversification
    JEL: J24 O14 R11
    Date: 2018–03
  2. By: José M. Gaspar (Católica Porto Business School, Universidade Católica Portuguesa and CEF.UP)
    Abstract: This work consists of a short biographical survey on the academic life and work of the American economist Paul Robin Krugman. It seeks to shed light on his mains contributions to economic theory, mainly those due to which he was awarded with the Nobel Prize in Economics in 2008. His legacy in academia can be assessed through the recognition of his work in the identification of international trade patterns and the explanation on why spatial imbalances in the distribution of economic activities arise in an increasingly globalized economy. Through these contributions to trade theory and economic geography, Krugman is often credited as being one of the pioneering researchers in the New Trade Theory and the founding father of the New Economic Geography.
    Keywords: paul krugman; new trade theory; new economic geography
    JEL: R10 R12 R23
    Date: 2018–01
  3. By: Teresa Farinha Fernandes; Pierre-Alexandre Balland; Andrea Morrison; Ron Boschma
    Abstract: There is ample evidence of regions diversifying in new occupations that are related to pre- existing activities in the region. However, it is still poorly understood through which mechanisms related diversification operates. To unpack relatedness, we distinguish between three mechanisms: complementarity (interdependent tasks), similarity (sharing similar skills) and local synergy (based on pure co-location). We propose a measure for each of these relatedness dimensions and assess their impact on the evolution of the occupational structure of 389 US Metropolitan Statistical Areas (MSA) for the period 2005-2016. Our findings show that new jobs appearing in MSA?s are related to existing ones, while those more likely to disappear are more unrelated to a city?s jobs' portfolio. We found that all three relatedness dimensions matter, but local synergy shows the largest impact on entry and exit of jobs in US cities.
    Keywords: evolutionary economic geography, regional capabilities, jobs, skills, relatedness, similarity, complementarity, local synergy, US cities
    JEL: J24 O18 R10
    Date: 2018–03
  4. By: Zoltán Elekes; Ron Boschma; Balázs Lengyel
    Abstract: A growing body of literature shows that related diversification in regions is more common but unrelated diversification also happens. However, we have little understanding of what types of firms induce related and unrelated diversification in regions. We investigate the extent to which foreign-owned firms induce structural change in the capability base of 67 regions in Hungary between 2000 and 2009. Doing so, we aim to connect more tightly the disparate literatures of Evolutionary Economic Geography and International Business. Using novel methodology developed by Neffke et al. (2018), we find that foreign-owned firms show a higher deviation from the region?s average capability match than domestic firms, and therefore, tend to contribute more to structural change in regions.
    Keywords: foreign-owned firms, related diversification, unrelated diversification, evolutionary economic geography, MNEs, international business studies
    JEL: F23 O18 O19 O33 P25 R11
    Date: 2018–03
  5. By: Rosés, Joan R.; Wolf, Nikolaus
    Abstract: We provide the first long-run dataset of regional employment structures and regional GDP and GDP per capita in 1990 international dollars, stretching over more than 100 years. These data allow us to compare regions over time, among each other, and to other parts of the world. After some brief notes on methodology we describe the basic patterns in the data in terms of some key dimensions: variation in the density of population and economic activity, the spread of industry and services and the declining role of agriculture, and changes in the levels of GDP and GDP per capita. We next discuss patterns of convergence and divergence over time and their explanations in terms of short-run adjustment and long-run fundamentals. Also, we document for the first time a secular decrease in spatial coherence from 1900 to 2010. We find a U-shaped development in geographic concentration and regional income inequality, similar to the finding of a U-shaped pattern of personal income inequality.
    Keywords: Europe; Long-Run; Regional Inequality
    JEL: D31 N1 N9 R1
    Date: 2018–02
  6. By: Anda David (Agence Française de Développement Government of France); Nathalie Guilbert (Independant consultant); Nobuaki Hamaguchi (Research Institute for Economics and Business Administration (RIEB), Kobe University, Japan); Yudai Higashi (Graduate School of Economics, Kobe University, Japan); Hiroyuki Hino (Southern Africa Labour and Development Research Unit (SALDRU)in the Poverty and Inequality Initiative of the University of Cape Town, South Africa, and Research Institute for Economics and Business Administration (RIEB), Kobe University, Japan); Murray Leibbrandt (Pro-Vice Chancellor, School of Economics, and Director of Southern Africa Labour and Development Research Unit (SALDRU) at the University of Cape Town, South Africa, and DST/NRF Research Chair on Poverty and Inequality); Muna Shifa (Southern Africa Labour and Development Research Unit (SALDRU), South Africa)
    Abstract: Using the 2011 South African population census, we provide income and multidimensional poverty and inequality estimates at the municipal level. We go on to estimate a spatial econometric model to identify the correlates of poverty across municipalities in South Africa. Our results show that both income and multidimensional poverty and inequality vary significantly across municipalities in South Africa. In general, areas that are historically characterized by low economic and welfare outcomes still experience significantly higher poverty and deprivation levels. Using both global and local spatial autocorrelation measures we find significant and positive spatial dependence and clustering of regional development indicators. The situation of poverty is both spatially unequal and autocorrelated. Results from our spatial econometric analysis indicate negative and significant relations between the municipal poverty levels and local levels of education and economic activity (GDP per capita). Significant and positive relations are found between municipal poverty levels and local inequality levels, suggesting that municipalities with higher levels of inequality also have higher incidences of poverty. In contrast, natural geographic factors such as rainfall and temperature are not significantly related to municipal poverty. Accounting for both direct, intra-municipality effects as well as spillover effects of neighbouring municipalities is important. These spillover effects notably reduce the coefficient sizes suggested by non-spatial, OLS regressions. Most striking, the large negative coefficient that OLS attributes to residing within a historical homeland area is greatly reduced and even loses statistical significance in some spatial models. Clearly municipalities in homeland areas are particularly likely to be surrounded by very poor municipal neighbours and therefore subject to strong negative spillovers. That said, when interactions between this historical geographical variable and contemporary socio-economic deprivations are included, then homeland becomes statistically significant once more. This makes the important point that while, it is these socio-economic deprivations that are particularly important in explaining contemporary income poverty across the county, those who reside in these homeland areas remain especially badly off in terms of these deprivations.
    Date: 2018–02
  7. By: Gibbons, Steve; Overman, Henry; Sarvimäki, Matti
    Abstract: We study the local economic impacts of a major regeneration programme aimed at enhancing the quality of life of local people in deprived neighbourhoods in the UK. The analysis is based on a panel of firm and area level data available at small spatial scales. Our identification strategies involve: a) exploiting the fine spatial scale of our data to study how effects vary with distance to the intervention area; and b) comparing places close to treatment in early rounds of the programme with places close to treatment in future rounds. We consider the long run impact of schemes funded between 1995 and 1997 on outcomes up to 2009. Our estimates suggest that the programme increased workplace employment in the intervention area but this had no impact on the employment rates of local residents.
    Keywords: employment, regional development, Labour markets and education, H50, J08, R11,
    Date: 2017
  8. By: Giulio Carli; Andrea Morrison
    Abstract: The life cycle approach has become popular in studies on industrial clusters. However, some concerns have been raised over the inherent determinism of this approach and its tendencies to focus exclusively on cluster internal dynamics while neglecting the role of external factors and socio-economic contingencies. This paper addresses these criticisms by investigating the long term development of Castel Goffredo, a traditional textile cluster in Italy. In our analysis we identify and characterise the main stages of the life cycle and its antecedents. We singled out the main triggering factors behind each of these stages and show that a variety of factors, both external and internal to the cluster, contributed to its development. Our findings confirm that an adaptive cycle approach, which focuses also on contingencies and external factors, appear to be appropriate for investigating the long term evolution of clusters.
    Keywords: cluster life cycle, industrial cluster, hosiery industry, evolutionary economic geography, complexity, industrial districts
    JEL: R1 R12 O1
    Date: 2018–03
  9. By: Grafeneder-Weissteiner, Theresa; Prettner, Klaus; Südekum, Jens
    Abstract: Economic development in industrialized countries is characterized by rising per capita GDP, increasing life expectancy, and an ever larger share of the population living in cities. We explain this pattern within a regional innovation-driven economic growth model with labor mobility and a demographic structure of overlapping generations. The model shows that there is a natural tendency for core-periphery structures to emerge in modern knowledge-based economies.
    Keywords: agglomeration,migration,innovation,growth,demography,urbanization,core-periphery structure,regional inequality
    JEL: J10 O30 O41 R23
    Date: 2018
  10. By: OKAMURO, Hiroyuki; NISHIMURA, Junichi
    Abstract: Increasing attention has been paid to regional innovation systems. However, previous studies have so far only focused on (the regional impact of) national policies or specific regions. To date, no studies have been carried out on the implementation and variety of local research and development (R&D) subsidy programs at the municipality level. Our research fills this gap by using information on R&D subsidy programs from local authorities in Japan collected via websites and our original survey. Our research confirms 151 R&D subsidy programs conducted by 131 cities among all cities in 2015 and investigates the determinants of the implementation and design of local R&D subsidy programs at city level (length and upper limit of subsidies, and flexibility of subsidy conditions) considering both demand- and supply-side factors. The empirical results suggest that, after controlling for city type and population size, supply-side factors including local government conditions significantly affect the implementation of public R&D subsidy programs. In contrast, we find that demand-side factors matter more for the design of subsidy programs than supply-side factors.
    Keywords: local authority, innovation policy, R&D subsidy, policy design, city
    JEL: H71 O38 R58
    Date: 2018–03

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