nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒04‒30
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Relatedness and growth: The impact of creative industries to the wider economy By Niccolò Innocenti; Luciana Lazzeretti
  2. Innovation-based regional structural change: Theoretical reflections, empirical findings and political implications By Koschatzky, Knut
  3. Competition, Land Price, and City Size By Sergey Kichko
  4. Understanding employment decentralization by estimating the spatial scope of agglomeration economies By Paul Verstraten; Gerard Verweij; Peter Zwaneveld
  5. The Geography of Talent: Development Implications and Long-Run Prospects By Michal Burzynski; Christoph Deuster; Frédéric Docquier
  6. Local policy effects at a time of economic crisis By Cerqua, Augusto; Pellegrini, Guido
  7. Academic Inventors and the Antecedents of Green Technologies. A Regional Analysis of Italian Patent Data. By Quatraro, Francesco; Scandura, Alessandra
  8. The banking systems of Germany, the UK and Spain form a spatial perspective: The Spanish case By Gärtner, Stefan; Fernández, Jorge
  9. Freedom from the Tyranny of Neighbourhood: Rethinking Socio-Spatial Context Effects By Petrović, Ana; Manley, David; van Ham, Maarten

  1. By: Niccolò Innocenti; Luciana Lazzeretti
    Abstract: The role of the cultural and creative industries (CCIs) in fostering both innovation and growth in the wider economy has been much debated, beginning with Bakhshi et al.'s (2008) seminal contribution. Such studies of creative environments tend to assign a strategic role to territories, but they provide little empirical evidence. In this paper, the issues of the creative economy are combined with evolutionary economic geography (EEG) topics in an attempt to understand whether the CCIs are able to foster innovation and growth in the wider economy. Using an indicator of the relatedness density between the creative and other sectors for the Italian provinces, we analyse employment growth and innovation over a period of ten years (2006?2015) by drawing from the AMADEUS database. A panel data analysis is then applied to investigate the role of relatedness and the clustering of the creative industries in wider economic growth, which shows that, at a local level, the creative industries require the presence of other sectors with a high degree of cognitive proximity/relatedness, while the capacity for development and innovation does not merely depend on their presence, but also on their relations and interdependencies with other economic sectors.
    Keywords: creative industries; employment growth; innovation; cognitive proximity; industry space
    JEL: R11 O10
    Date: 2018–04
  2. By: Koschatzky, Knut
    Abstract: The objective of this paper is to broaden the knowledge base on the topic of innovation-based regional structural change and to discuss the possibilities of raising structurally weak regions to a dynamic growth path by means of innovation-promoting measures. The background to this objective are political developments in Germany with regard to the development of a comprehensive German support system for structurally weak regions from 2020 onwards. While regional structural support (ERDF and German regional support) is so far essentially concentrated on regions in the eastern federal states, it should focus in future on structurally weak regions in all federal states and eliminate the differentiation between eastern and western Germany (Deutscher Bundestag 2016, 4). The experience gained in the eastern German states with the focus on innovation as a driver of structural change is intended to provide a starting point here, but taking into account the fact that some structural factors differ markedly between East German and West German regions. Against this background, this paper focuses on the innovation policy component of a system for promoting structural change in structurally weak regions.
    Date: 2018
  3. By: Sergey Kichko (National Research University Higher School of Economics)
    Abstract: Larger cities typically give rise to two effects working in opposite directions: tougher competition among firms and higher production costs. Using an urban model with substitutability of production factors and pro-competitive effects, we study how market outcome responds to city population size, land-use regulation and commuting costs. For industries with small input of land, larger cities host more firms which set lower prices whereas larger cities accommodate more firms which charge higher prices in industries with intermediate land share in production. Furthermore, for industries with high input share of land, larger cities allocate fewer firms with higher product prices. We show that softer land-use regulation and/or lower commuting costs reinforce pro-competitive effects making larger cities more attractive for residents via lower product prices and broader variety for a larger number of industries.
    Keywords: pro-competitive effects; production structure; land-use regulations; urban costs; pricing; city size.
    JEL: R13 R32 R52
    Date: 2018
  4. By: Paul Verstraten (CPB Netherlands Bureau for Economic Policy Analysis); Gerard Verweij (CPB Netherlands Bureau for Economic Policy Analysis); Peter Zwaneveld (CPB Netherlands Bureau for Economic Policy Analysis)
    Abstract: This paper argues that the spatial decay function of agglomeration economies is much more complex than is often assumed in the agglomeration literature. We provide insight into this issue by analyzing a nationwide and spatially rich wage panel. The key finding is that wages and urbanization are not significantly related on short distances ( This article is revised on February 28th 2018. The revised version (Discussion Paper 376) can be found here . This positive effect attenuates across geographic space and becomes insignificant after 40-80km. This non-monotone relation between wages and distance to economic mass is in line with recently observed trend towards employment decentralization, because it suggests that agglomeration economies on short distances, i.e. in city centers, are offset by congestion externalities. Additionally, this paper finds no evidence that foreign economic mass affects wages in the Netherlands, which suggests that national borders are still a substantial barrier for economic interaction.
    JEL: R12 J31
    Date: 2017–02
  5. By: Michal Burzynski (CREA - Center for Research in Economic Analysis - - Université du Luxembourg); Christoph Deuster (UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain, UNINOVA - Universidade Nova de Lisboa); Frédéric Docquier (UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain, FERDI - Fondation pour les Etudes et Recherches sur le Développement International, FNRS - Fonds National de la Recherche Scientifique [Bruxelles])
    Abstract: This paper characterizes the recent evolution of the geographic distribution of talent, and studies its implications for development inequality. Assuming the continuation of recent educational and immigration policies, it produces integrated projections of income, population, urbanization and human capital for the 21st century. To do so, we develop and parameterize a two-sector, two-class, world economy model that endogenizes education decisions, population growth, labor mobility, and income disparities across countries and across regions/sectors (agriculture vs. nonagriculture). We find that the geography of talent matters for global inequality, whatever the size of technological externalities. Low access to education and the sectoral allocation of talent have substantial impacts on inequality, while the effect of international migration is small. We conclude that policies targeting access to all levels of education and sustainable urban development are vital to reduce demographic pressures and global inequality in the long term.
    Keywords: inequality,growth,Human capital,migration,urbanization
    Date: 2018–03–26
  6. By: Cerqua, Augusto; Pellegrini, Guido
    Abstract: Regional inequalities are large and have widened during the Great Recession. As they prompt people and economic activities to migrate from lagging regions, central governments around the world transfer large amounts of resources in order to prevent these phenomena from occurring. In this paper, we evaluate the effectiveness of the most extensive and long-lived experiment of income redistribution across regions and countries, i.e., the EU regional policy, at a time of economic crisis. Exploiting geographic discontinuities in funds eligibility and using a spatial regression discontinuity design, we analyze comprehensive data on all publicly funded Italian projects at the municipality level. We find a positive and significant impact on employment and number of plants in the least developed regions. However, the impact turns largely negligible when the gap between more and less intensively treated areas is relatively small. Moreover, the EU regional policy appears not to have had any effect on local average income.
    Keywords: EU regional policy, spatial regression discontinuity design, recession, municipalities
    JEL: C21 H25 R11
    Date: 2018–04–01
  7. By: Quatraro, Francesco; Scandura, Alessandra (University of Turin)
    Abstract: This work investigates the generation of green technologies (GTs) in Italian NUTS 3 regions across time, by focusing on the knowledge generation mechanisms underlying the creation of green patents. Firstly, we hypothesize that inventions in non-green technological domains positively influence the generation of GTs, because the latter occur as the outcome of a recombination process among a wide array of technological domains. Secondly, we hypothesise that the involvement of academic inventors in patenting activity bears positive effects on the generation of GTs, because they are able to manage the recombination across different technological domains. Thirdly, we explore the interaction effect between academic inventors’ involvement and non-green technologies to investigate whether the former are especially relevant in presence of higher or lower levels of the latter. We estimate zero-inflated negative binomial, spatial durbin and logistic regressions on a dataset of 103 Italian NUTS 3 regions for which we collected patent and regional data for the time span 1998-2009. The results suggest that both academic inventors and spillovers from polluting technologies bear positive direct effects on the generation of GTs; moreover, we find that academic inventors compensate for low levels of spillovers.
    Date: 2018–04
  8. By: Gärtner, Stefan; Fernández, Jorge
    Abstract: When looking at the Spanish banking market through a German lens, the differences between the banking markets in these countries and between decentralised and centralised systems with regard to the SME-credit decision-making process become obvious. Despite our hypotheses that Spanish savings banks were similar to German savings banks until the crisis, or at least until liberalisation and before the break-up of the regional principle, we came to the conclusion that they were never as significant as savings banks in Germany, at least not for SME finance. Notwithstanding recent initiatives to create a common European market and to integrate diverse national banking systems, the European financial system remains spatially complex and uneven, particularly with respect to the degree of geographical concentration. Whereas decentralisation increased in Germany, especially during the financial crisis, the rather decentralised Spanish banking system has become more and more centralised. This development has tended to fuel the financial crisis even further in Spain. In Spain, however, whereas most savings banks, which already operated nationally, were finally privatised due to their heavy losses in the crisis, regional savings banks in Germany further increased their market share in firm financing.
    Keywords: comparing banking systems,SME finance in Germany,SME finance in Spain,savings and cooperative banks,decentralised vs. centralised banking
    JEL: D43 E21 G01 G21 G38 R12
    Date: 2018
  9. By: Petrović, Ana (Delft University of Technology); Manley, David (University of Bristol); van Ham, Maarten (Delft University of Technology)
    Abstract: Theory behind neighbourhood effects suggests that different geographies and scales affect individual outcomes. We argue that neighbourhood effects research needs to break away from the tyranny of neighbourhood and consider alternative ways to measure the wider socio-spatial context of people, placing individuals at the centre of the approach. We review theoretical and empirical approaches to place and space from a multitude of disciplines and the geographical scopes of neighbourhood effects mechanisms. Ultimately, we suggest ways in which micro-geographic data can be used to operationalise socio-spatial context for neighbourhood effects, where data pragmatism should be supplanted by a theory-driven data exploration.
    Keywords: neighbourhood effects, socio-spatial context, micro-geographic data, bespoke neighbourhoods, spatial scale
    JEL: I30 J60 P46 R23
    Date: 2018–03

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