nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒05‒21
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Spatial Diffusion of Economic Shocks in Networks By Ashani Amarasinghe; Roland Hodler; Paul A. Raschky; Yves Zenou
  2. Heterogeneous Foreign Direct Investment and Local Innovation in Italian Provinces By Andrea Ascani; Pierre-Alexandre Balland
  3. Jobs for the Heartland: Place-Based Policies in 21st Century America By Benjamin A. Austin; Edward L. Glaeser; Lawrence H. Summers
  4. Sorting and agglomeration economies in French economics departments By Clément Bosquet; Pierre-Philippe Combes
  5. Nothing is in the air By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  6. Learning mobility grants and skill (mis)matching in the labour market: the case of the 'Master and Back' programme By Crescenzi, Riccardo; Gagliardi, Luisa; Orrù, Enrico
  7. The impact of urban public transportation evidence from the Paris region By Thierry Mayer; Corentin Trevien
  8. A Time-Space Dynamic Panel Data Model with Spatial Moving Average Errors By Baltagi, Badi H.; Fingleton, Bernard; Pirotte, Alain
  9. Estimation of NUTS2 Interregional Input-Output Systems for Greece, 2010 and 2013 By Eduardo A. Haddad; Natalia Q. Cotarelli, Thiago C. Simonato, Vinicius A. Vale; Jaqueline C. Vicentin

  1. By: Ashani Amarasinghe; Roland Hodler; Paul A. Raschky; Yves Zenou
    Abstract: The aggregate economic impact of any developmental project depends on its effects within the chosen administrative region as well as its economic spillovers into other regions. However, little is known about how these spillovers propagate through geographic, ethnic and road networks. In this paper, we analyze both theoretically and empirically the role of these networks in the spatial diffusion of local economic shocks. We develop a network model that shows how a district’s level of prosperity is related to its position in the network. The network model’s first-order conditions are used to derive an econometric model of spatial spillovers that we estimate using a panel of 5,944 districts from 53 African countries over the period 1997-2013. To identify the causal effect of spatial diffusion, we exploit cross-sectional variation in the location of mineral mines and exogenous time variation in world mineral prices. Our results show that road and ethnic connectivity are particularly important factors for diffusing economic spillovers over longer distances. We then use the estimated parameters from the econometric model to calculate the key player centralities, which determine which districts are key in propagating local economic shocks across Africa. We further show how counterfactual exercises based on these estimates and the underlying network structure can inform us about the potential gains from policies that increase economic activity in specific districts or improve road connectivity between districts.
    Keywords: economic development, networks, spatial spillovers, key player centrality, natural resources, transportation, Africa
    JEL: O13 O55 R12
    Date: 2018
  2. By: Andrea Ascani; Pierre-Alexandre Balland
    Abstract: Countries and regions all over the world compete to attract Foreign Direct Investment (FDI) as a way to access knowledge, technology, and boost economic development. Although the literature shows a positive impact of FDI on local economies, little is known about (1) the impact on innovation of neighbouring regions and the type of FDI that generates the strongest learning effects. To fill this gap, this article investigates the relationship between FDI and the innovation capacity of Italian provinces (NUTS3). In order to capture the heterogeneity of FDI in terms of knowledge inputs, we apply the Pavitt categorisation of manufacturing sectors to inward FDI within Italian provinces, thus accounting for the nature and sources of knowledge in different sectors where foreign multinationals are active. Our results suggest that only some specific typologies of inward FDI, such as that in "Science based" sectors and to a lesser extent in "Specialised supplier" activities, benefit local economies. Nevertheless, other types of inward FDI can produce possible negative outcomes in terms of local innovation. We detect only weak evidence on the spatial implications of inward FDI.
    Keywords: foreign direct investment, spillovers, Pavitt taxonomy, FDI heterogeneity
    JEL: O3 F23 R11
    Date: 2018–05
  3. By: Benjamin A. Austin; Edward L. Glaeser; Lawrence H. Summers
    Abstract: The economic convergence of American regions has greatly slowed, and rates of long-term non-employment have even been diverging. Simultaneously, the rate of non-employment for working age men has nearly tripled over the last 50 years, generating a terrible social problem that is disproportionately centered in the eastern parts of the American heartland. Should more permanent economic divisions across space lead American economists to rethink their traditional skepticism about place-based policies? We document that increases in labor demand appear to have greater impacts on employment in areas where not working has been historically high, suggesting that subsidizing employment in such places could particularly reduce the not working rate. Pro-employment policies, such as a ramped up Earned Income Tax Credit, that are targeted towards regions with more elastic employment responses, however financed, could plausibly reduce suffering and materially improve economic performance.
    JEL: J01 J21 J38 R12 R23
    Date: 2018–04
  4. By: Clément Bosquet (Spatial Economic Research Center); Pierre-Philippe Combes (Département d'économie)
    Abstract: Are agglomeration and peer effects at stake in academic research? To tackle this question, we study how departments’ characteristics affect the quantity and quality of academics’ publications in economics in France, controlling for individual time-varying characteristics and individual fixed effects. Department characteristics have an explanatory power at least equal to a quarter of that of individual characteristics and possibly as high as theirs. The quantity and quality of an academic’s publications in a field increase with the presence of other academics specialised in that field and with the share of the department’s publications output in that field. In contrast, department size, proximity to other large departments, homogeneity in terms of publication performance, presence of colleagues with connections abroad, and composition in terms of positions and age matter for some publication measures but only if not controlling for individual fixed effects.
    Keywords: Research productivity; Local externalities; Skill sorting; Peer effects; Knowledge spillovers; Co-author networks; Economics of science
    JEL: R23 J24 I23
    Date: 2017–09
  5. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: It has often been argued that “there is something in the air” which makes firms in high-density environments—such as cities or clusters—more innovative. The co-location of firms facilitates the emergence of serendipity and casual encounters which promote innovation in firms. We assess this hypothesis using data from a survey of Norwegian firms engaged in innovation partnerships. The results indicate that there may be “much less in the air” than is generally assumed in the literature. The relationships conducive to innovation by Norwegian firms emerged as a consequence of purpose-built searches and had little to do with chance, serendipity, or “being there.”
    Keywords: innovation; tacit knowledge; agglomeration; externalities; spillovers; Norway
    JEL: N0 J50
    Date: 2017–03–02
  6. By: Crescenzi, Riccardo; Gagliardi, Luisa; Orrù, Enrico
    Abstract: The paper looks at the geographical mobility of graduate students and their skill matching in the labour market. The paper assesses the impact of a learning mobility grant scheme funded by the European Social Fund in Sardinia (ex-Objective 1 region in the Italian Mezzogiorno). The scheme aims to foster regional human capital and increase the employability of local graduates by covering the cost of post-graduate studies in other regions or countries. The econometric analysis is based on a unique dataset that combines administrative data on beneficiaries with information from a dedicated survey. The results suggest that learning mobility grants can reinforce skill matching only if the problem of self-selection of the beneficiaries is properly addressed.
    Keywords: mobility; skills; labour markets; regions; European Union
    JEL: J24 J61 R23 R58
    Date: 2016–11
  7. By: Thierry Mayer (Département d'économie); Corentin Trevien
    Abstract: We use the natural experiment provided by the opening and progressive extension of the Regional Express Rail (RER) between 1970 and 2000 in the Paris metropolitan region, and in particular the departure from the original plans due to budget constraints and technical considerations, to identify the causal impact of urban rail transport on firm location, employment and population growth. We apply a difference-in-differences method to a particular subsample, selected to minimize the endogeneity that is routinely found in the evaluation of the effects of transport infrastructure. We find that the RER opening caused a 8.8% rise in employment in the municipalities connected to the network between 1975 and 1990. While we find no effect on overall population growth, our results suggest that the arrival of the RER may have increased competition for land, since high-skilled households were more likely to locate in the vicinity of a RER station.
    Keywords: Location; Urban form; Transport infrastructure; Subway
    JEL: D04 H43 R42
    Date: 2017–11
  8. By: Baltagi, Badi H.; Fingleton, Bernard; Pirotte, Alain
    Abstract: This paper focuses on the estimation and predictive performance of several estimators for the time-space dynamic panel data model with Spatial Moving Average Random Effects (SMA-RE) structure of the disturbances. A dynamic spatial Generalized Moments (GM) estimator is proposed which combines the approaches proposed by Baltagi, Fingleton and Pirotte (2014) and Fingleton (2008). The main idea is to mix non-spatial and spatial instruments to obtain consistent estimates of the parameters. Then, a forecasting approach is proposed and a linear predictor is derived. Using Monte Carlo simulations, we compare the short-run and long-run effects and evaluate the predictive efficiencies of optimal and various suboptimal predictors using the Root Mean Square Error (RMSE) criterion. Last, our approach is illustrated by an application in geographical economics which studies the employment levels across 255 NUTS regions of the EU over the period 2001-2012, with the last two years reserved for prediction.
    Keywords: Panel data; Spatial lag; Error components; Time-space; Dynamic;OLS; Within; GM; Spatial autocorrelation; Direct and indirect effects; Moving average; Prediction; Simulations, Rook contiguity, Interregional trade.
    JEL: C23
    Date: 2018–04–18
  9. By: Eduardo A. Haddad; Natalia Q. Cotarelli, Thiago C. Simonato, Vinicius A. Vale; Jaqueline C. Vicentin
    Abstract: The aim of this paper is to describe in details the process of estimation of two interregional input-output systems for Greece, for the years 2010 and 2013. Further understanding of the changing structure of the Greek regional economies during the crisis, within an integrated interregional system, is one of the main goals of a broader project underway at the University of São Paulo Regional and Urban Economics Lab (NEREUS). With this paper, we make available not only the details of the methodological procedures adopted to generate the interregional systems, but also the database itself to be used by other researchers and practitioners.
    Keywords: Interregional input-output; methodology; data; Greece
    JEL: C67 D57 R15
    Date: 2018–05–14

This nep-geo issue is ©2018 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.
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