nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒04‒02
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Growth and the geography of knowledge By Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
  2. Agglomeration patterns in a multi-regional economy without income effects By José M. Gaspar; Sofia B.S.D. Castro; João Correia-da-Silva
  3. Tourism and regional development: a spatial econometric model for Portugal at municipal level By Ana Catarina Vieira; Luis Delfim Santos
  4. The Impact of the French Policy Mix on Business R&D: How Geography Matters By Benjamin Montmartin; Marcos Herrera; Nadine Massard
  5. Equilibrium selection and stability in dynamic core-periphery models with heterogeneous preferences By DELLOYE Justin; PEETERS Dominique; THARAKAN Joe
  6. On Quantitative Spatial Economic Models By Kristian Behrens; Yasusada Murata
  7. Growth and agglomeration in the heterogeneous space: A generalized AK approach By Raouf Boucekkine; Giorgio Fabbri; Salvatore Federico; Fausto Gozzi
  8. Manufacturing (Co)Agglomeration in a Transition Country: Evidence from Russia By Ekaterina Aleksandrova; Kristian Behrens; Maria Kuznetsova
  9. Agricultural Productivity in Space - An econometric assessment on Italian farm-level data By Edoardo Baldoni; Roberto Esposti
  11. Spillovers in space and time: where spatial econometrics and Global VAR models meet By Elhorst, J. Paul; Gross, Marco; Tereanu, Eugen
  12. Proximities activation in relocalized food supply chain. The case of two territorialized collective organizations in Pays-de-la-Loire region By Julien Noel; Laurent Le Grel
  13. Regionale und lokale Wirtschaftsförderung: Meran und Brixen im Kontext der Regionalökonomie Südtirols By Benner, Maximilian; Arik, Alev; Aslan, Gabriel; Ben Hajar, Philip; Civelek, Ilkan; Döpke, Marius; Jadran, Mohammed; Kardel, Aileen; Lietzau, Jule; Maske, Johanna; Masud Bagha, Jamshed; Rothert, Sören; Schauppel, Laura; Stanisch, Kay; Yalcin, Onur; Yamrali, Emad; Ziehlke, Linda

  1. By: Marta Aloi; Joanna Poyago-Theotoky; Frederic Tournemaine
    Abstract: We analyse how spatial disparities in innovation activities, coupled with migration costs, affect economic geography, growth and regional inequality. We provide conditions for existence and uniqueness of a spatial equilibrium, and for the endogenous emergence of industry clusters. Spatial variations in knowledge spillovers lead to spatial concentration of more innovative firms. Migration costs, however, limit the concentration of economic activities in the most productive region. Narrowing the gap in knowledge spillovers across regions raises growth, and reduces regional inequality by making firms more sensitive to wage differentials. The associated change in the spatial concentration of industries has positive welfare effects.
    Keywords: Growth; Economic geography; Geographic labour mobility; Innovation; Knowledge spillovers; Regional economics
    Date: 2018
  2. By: José M. Gaspar (FEP, University of Porto. Católica Porto Business School, Universidade Católica Portuguesa.); Sofia B.S.D. Castro (CMUP and Faculty of Economics, University of Porto); João Correia-da-Silva (CEF.UP and Faculty of Economics, University of Porto)
    Abstract: We study the long-run spatial distribution of industry using a multi-region core-periphery model with quasi-linear log utility (Pflüger, 2004). We show that a distribution in which industry is evenly dispersed among some of the regions while the other regions have no industry cannot be stable. A spatial distribution where industry is evenly distributed among all regions except one can be stable, but only if that region is significantly more industrialized than the other regions. When trade costs decrease, the type of transition from dispersion to agglomeration depends on the fraction of workers that are mobile. If this fraction is low, the transition from dispersion to agglomeration is catastrophic once dispersion becomes unstable. If it is high, there is a discontinuous jump to partial agglomeration in one region and then a smooth transition until full agglomeration. Finally, we find that mobile workers benefit from more agglomerated spatial distributions whereas immobile workers prefer more dispersed distributions. The economy as a whole shows a tendency towards over-agglomeration for intermediate levels of trade costs.
    Keywords: Core-periphery model, Footloose Entrepreneur, Multiple regions, Welfare
    JEL: R10 R12 R23
    Date: 2017–07
  3. By: Ana Catarina Vieira (Faculdade de Economia do Porto); Luis Delfim Santos (Faculdade de Economia do Porto)
    Abstract: This study examines the importance of tourism as a factor for regional economic development in Mainland Portugal, emphasizing the inter-regional spatial spillover effects. A spatial analysis of the main variables of the tourism sector revealed strong evidence of positive spatial autocorrelation across the municipalities of Portugal. A significant spatial clustering of these activities on coastal location was identified, leading to the formation of hot spots in coastal regions and cold spots in inland regions. Furthermore, this work specifies spatial econometric models aiming to estimate the relevance of the tourism sector in regional economic development, on a municipal level. The results show that tourism is a significant driver of regional economic development. Moreover, they revealed the presence of positive and significant inter-regional spillover effects, which strongly enhance tourism’s economic impact.
    Keywords: tourism sector; spillover effects; spatial econometrics; Portugal
    JEL: C21 R12
    Date: 2017–05
  4. By: Benjamin Montmartin (SKEMA Business School; Université Côte d’Azur; OFCE Sciences.Po; GREDEG CNRS); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GAEL UMR 1215; Université Grenoble Alpes, France)
    Abstract: Based on a spatial extension of an R&D investment model, this paper measures the macroeconomic impact of the French R&D policy mix on business R&D using regional data. Our measure takes into account not only the direct effect of policies but also indirect effects generated by the existence of spatial interaction between regions. Using a unique database containing information on the levels of various R&D policy instruments received by firms in French NUTS3 regions over the period 2001-2011, our estimates of a spatial Durbin model with structural breaks and fixed effects reveal the existence of a negative spatial dependence among R&D investments in regions. In this context, while a-spatial estimates would conclude that all instruments have a crowding-in effect, we show that national subsidies are the only instrument that is able to generate significant crowding-in effects. On the contrary, it seems that the design, size and spatial allocation of funds from the other instruments (tax credits, local subsidies, European subsidies) lead them to act (in the French context) as beggar-thy-neighbor policies.
    Keywords: Policy mix evaluation, R&D investment, Spatial panel, French NUTS3 regions
    JEL: H25 O31 O38
    Date: 2018–03
  5. By: DELLOYE Justin (CORE, Université catholique de Louvain); PEETERS Dominique (CORE, Université catholique de Louvain); THARAKAN Joe (Université de Liège and CORE)
    Abstract: In New Economic Geography, recent models have shown that idiosyncratic preferences of workers for locations act as a dispersion force affecting the number and stability of equilibrium population distributions. Yet those models are based on ad hoc deterministic adjustment procedures that have two shortcomings. Firstly, they remove the aggregate effect of idiosyncratic preferences on the collective spatial dynamics of workers, whose study would require the use of specific notions of equilibrium stability. Secondly, these adjustment dynamics lack an explicit time unit that prevents adjustment trajectories to be expressed as dynamic scenarios. Those two shortcomings strive against the use of New Economic Geography models to support policy recommendations. Starting from a classic core-periphery model of New Economic Geography, this paper proposes a novel approach to adjustment dynamics, based on stochastic migration models, by which the dynamics of the population distribution is a continuous-time Markov chain. Using a diffusion approximation, the dynamic system is reduced to a set of Itô stochastic differential equations, which is an original contribution to New Economic Geography. In those equations, deterministic and stochastic effects are still distinct at the aggregate scale, which enables to numerically compute equilibrium population distributions as well as to evaluate their stability and selection under stochastic perturbations generated by idiosyncratic preferences. Those equations also enable to complete expected adjustment trajectories with an explicit time unit and with confidence intervals, for different scenarios. Hence this paper is a substantial improvement of the capacity of New Economic Geography models to support policy recommendations.
    Keywords: agglomeration, migration, wage differential, heterogeneous agents
    JEL: F12 F15 F21 R12 R13 O15 O18
    Date: 2018–01–29
  6. By: Kristian Behrens (National Research University Higher School of Economics); Yasusada Murata (National Research University Higher School of Economics)
    Abstract: Quantitative spatial economics (QSE) specifies various components such as preferences, production technology, and frictions for the movement of goods, people, and ideas. Despite the long literature on endogenous location decisions, the question of how these specifications affect resulting spatial equilibria has not been systematically explored. In this paper we start with workhorse models of QSE based on different specifications of preferences and show that spatial equilibria in those models can be generated using the conditional logit model by McFadden (1974). Our result suggests that existing models of QSE have a common origin in one of the oldest location choice models.
    Keywords: quantitative spatial economics; location choice; logit; spatial equilibrium
    JEL: F12 F14 R12 R13
    Date: 2018
  7. By: Raouf Boucekkine (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales); Giorgio Fabbri (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Salvatore Federico (LPMA - Laboratoire de Probabilités et Modèles Aléatoires - UPMC - Université Pierre et Marie Curie - Paris 6 - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique); Fausto Gozzi (Dipartimento di Scienze Economiche e Aziendali - Libera Università INTERNAZIONALE DEGLI STUDI SOCIALI G. CARLI)
    Abstract: We provide an optimal growth spatio-temporal setting with capital accumulation and diffusion across space in order to study the link between economic growth triggered by capital spatio-temporal dynamics and agglomeration across space. The technology is AK, K being broad capital. The social welfare function is Benthamite. In sharp contrast to the related literature, which considers homogeneous space, we derive optimal location outcomes for any given space distributions for technology and population. Both the transitional spatio-temporal dynamics and the asymptotic spatial distributions are computed in closed form. Concerning the latter, we find, among other results, that: (i) due to inequality aversion, the consumption per capital distribution is much flatter than the distribution of capital per capita; (ii) endogenous spillovers inherent in capital spatio-temporal dynamics occur as capital distribution is much less concentrated than the (pre-specified) technological distribution ; (iii) the distance to the center (or to the core) is an essential determinant of the shapes of the asymptotic distributions, that is relative location matters.
    Keywords: Growth, agglomeration, heterogeneous and continuous space,capital mobility,infinite dimensional optimal control problems Journal of Economic Literature
    Date: 2018–02–18
  8. By: Ekaterina Aleksandrova (National Research University Higher School of Economics); Kristian Behrens (National Research University Higher School of Economics); Maria Kuznetsova (National Research University Higher School of Economics)
    Abstract: We document geographic concentration patterns of Russian manufacturing using microgeographic data. About 42–52% of 4-digit and 63–75% of 3-digit industries are localized, with a higher share in the European part than in the Asian part. About 70% of 3-digit industry pairs are coagglomerated, especially those with stronger buyer-supplier links, more knowledge sharing, and lower transport costs. Pairs with a more similar workforce are, however, less coagglomerated, which points to impediments in labor mobility between regions and firms. Overall, the agglomeration forces are fairly similar to those operating in developed countries, with transportation likely to be a key driver.
    Keywords: agglomeration; coagglomeration; determinants of geographic concentration; manufacturing industries; Russia.
    JEL: R12
    Date: 2018
  9. By: Edoardo Baldoni (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche); Roberto Esposti (Dipartimento di Scienze Economiche e Sociali - Universita' Politecnica delle Marche)
    Abstract: This work aims to investigate the spatial dependence of agricultural Total Factor Productivity (TFP) by using farm-level data and aggregating them at a variable geographical scale. At this scale a multilateral TFP index is computed and the spatial and time dependence of this TFP measure is assessed within a spatial dynamic panel specification. Alternative Least Squares (LS), Maximum Likelihood (ML) and Generalized Method of Moments (GMM) estimation approaches are proposed and respective results compared. The application concerns Italian farm-level data over the period 2008-2015. Results suggests that higher productivity spillovers are found for those NUTS3 regions with similar neighborhoods in terms of production specialization. Higher spill-ins are found in those NUTS3 with a larger number of geographical connections, regardless of their similarity in terms of production specialization.
    Keywords: Productivity Spatial Dependence, Technological Spillovers, Multilateral TFP index, Dynamic Panel Models
    JEL: Q12 O47 C23
    Date: 2018–03
    Date: 2018
  11. By: Elhorst, J. Paul; Gross, Marco; Tereanu, Eugen
    Abstract: We bring together the spatial and global vector autoregressive (GVAR) classes of econometric models by providing a detailed methodological review of where they meet in terms of structure, interpretation, and estimation methods. We discuss the structure of cross-section connectivity (weight) matrices used by these models and its implications for estimation. Primarily motivated by the continuously expanding literature on spillovers, we define a broad and measurable concept of spillovers. We formalize it analytically through the indirect effects used in the spatial literature and impulse responses used in the GVAR literature. Finally, we propose a practical step-by-step approach for applied researchers who need to account for the existence and strength of cross-sectional dependence in the data. This approach aims to support the selection of the appropriate modeling and estimation method and of choices that represent empirical spillovers in a clear and interpretable form. JEL Classification: C33, C38, C51
    Keywords: GVARs, spatial models, spillovers, weak and strong cross-sectional dependence
    Date: 2018–02
  12. By: Julien Noel (ESO - Espaces et Sociétés - CNRS - Centre National de la Recherche Scientifique - UR2 - Université de Rennes 2 - UNIV-RENNES - Université de Rennes - AGROCAMPUS OUEST - UN - Université de Nantes - UA - Université d'Angers - UM - Le Mans Université - UNICAEN - Université de Caen Normandie - NU - Normandie Université); Laurent Le Grel (ONIRIS - Ecole Nationale Vétérinaire, Agroalimentaire et de l'alimentation Nantes-Atlantique)
    Abstract: The proximity-based approach provides an operational conceptual framework to understand sustainable relocation strategies currently ongoing in food supply chains. The concept of proximity and its various dimensions are mobilized for the study of two cases of collective organizations territorialized forms (COTF) in the Pays-de-la-Loire region, involved in this food relocation dynamics. The first one, Bio Loire Ocean, gathers about sixty organic farmers engaged in structuring an organic fruits and vegetables supply chain. The second one is the Amap poisson Yeu Nantes, a system of direct sales from fishers in the isle of Yeu to consumers in the city of Nantes area. The analysis of the proximities which are activated in these two case studies shows that, in spite of the intermediations, these two organizations are still able to bring producers and consumers closer together.
    Abstract: L'école des proximités fournit un cadre conceptuel opérationnel pour comprendre les logiques de relocalisation durable actuellement à l'oeuvre dans les circuits alimentaires. Le concept de circuit de proximité, et de ses différentes dimensions, est ici mobilisé pour l'étude de deux cas de formes d'organisations collectives territorialisées de la région des Pays-de-la-Loire qui s'inscrivent dans ces dynamiques de relocalisation alimentaire. La première, Bio Loire 2 Océan, regroupe une soixantaine d'agriculteurs biologiques engagés dans la structuration d'une filière bio de fruits et légumes. La seconde, l'Amap poisson Yeu-Nantes, organise un circuit court alimentaire entre pêcheurs ogiens et amapiens nantais. L'analyse des proximités activées dans ces deux cas montre que, malgré le recours à des intermédiations, ces deux organisations conservent leur vocation initiale de rapprochement entre producteurs et consommateurs.
    Keywords: Mots-clés : systèmes alimentaires,proximités,territoire,organisations collectives,Pays-de-la-Loire
    Date: 2018–03–08
  13. By: Benner, Maximilian; Arik, Alev; Aslan, Gabriel; Ben Hajar, Philip; Civelek, Ilkan; Döpke, Marius; Jadran, Mohammed; Kardel, Aileen; Lietzau, Jule; Maske, Johanna; Masud Bagha, Jamshed; Rothert, Sören; Schauppel, Laura; Stanisch, Kay; Yalcin, Onur; Yamrali, Emad; Ziehlke, Linda
    Abstract: The present study takes stock of the regional economy of the Autonomous Province of Bolzano-Alto Adige/Bozen-Südtirol (South Tyrol) and the local economies of the cities of Merano/Meran and Bressanone/Brixen. In particular, the stocktaking exercise covers the sectoral structure of the economy, the role of retail and culture, and the state of tourism development in the two cities. Further, the study assesses agents and initiatives of local and regional economic development in both cities and on the provincial level. The stocktaking exercise takes into consideration the role of European structural policy and notably the province’s smart specialisation strategy. Based on the regional and local economic analysis, stylized conclusions are drawn and preliminary recommendations are given on how to develop the regional and local economies analyzed over the course of the coming years.
    Keywords: local development; regional development; smart specialisation; culture; innovation; tourism; South Tyrol; Merano; Bressanone; Italy
    JEL: L26 L83 O13 O14 R11 R58
    Date: 2018–02–28

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