nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒05‒28
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The impact of Urban Enterprise Zones on establishment location decisions and labor market outcomes: evidence from France By Thierry Mayer; Florian Mayneris; Loriane Py
  2. Contagious Exporting and Foreign Ownership: Evidence from Firms in Shanghai using a Bayesian Spatial Bivariate Probit Model. By Badi Baltagi; Peter H. Egger; Michaela Kesina
  3. The Roots of a Dual Equilibrium: GDP, Productivity and Structural Change in the Italian Regions in the Long-run (1871-2011) By Emanuele Felice
  4. Directed Technological Change and Technological Congruence: A New Framework for the Smart Specialization Strategy. By Antonelli, Cristiano; Feder, Christophe; Quatraro, Francesco
  5. Water Content in Trade: A Regional Analysis for Morocco By Eduardo A. Haddad; Fatima Ezzahra Mengoub, Vinicius A. Vale
  6. Cherry Picking versus Lemon Grabbing: Target Selection of Cross-Border and Domestic Acquisitions in Japan By Ralf Bebenroth; Pao-Lien Chen

  1. By: Thierry Mayer (Département d'économie); Florian Mayneris (Institut de recherches économiques et sociales); Loriane Py (Centre de recherche de la Banque de France)
    Abstract: In this article, we study the impact of a French enterprise zone program—the ‘Zones Franches Urbaines’ (ZFUs) policy—on establishment location decisions and on labor market outcomes. Our main identification strategy, which combines spatial and time differencing, shows that conditional on locating in a municipality that hosts a ZFU, the policy has a positive and sizable impact on the probability to locate in the ZFU part rather than in the non-ZFU part of municipalities. However, the impact is highly heterogeneous across zones, industries and firms. We also show that this positive effect is entirely due to within-municipality diversion effects. Regarding labor market outcomes, the policy has a positive effect on employment, especially for low-wage workers. As for wages, the effect is null for low-wage workers, and negative for high-wage ones.
    Keywords: Firm location; Enterprise zones; Employment; Wages; Spatial differencing
    JEL: R12 R38 R58
    Date: 2017–07
  2. By: Badi Baltagi (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244); Peter H. Egger (ETH Zurich, CEPR, CESifo, GEP); Michaela Kesina (ETH Zurich)
    Abstract: Whether a firm is able to attract foreign capital and whether it may participate at the export market depends on whether the fixed costs associated with doing so are at least covered by the incremental operating profits. This paper provides evidence that success for some firms in attracting foreign investors and in exporting appears to reduce the associated fixed costs with exporting or foreign ownership in other firms. Using data on 8,959 firms located in Shanghai, we find that contagion and spillovers in exporting and in foreign ownership decisions within an area of 10 miles in the city of Shanghai amplify fixed-cost reductions for both exporting as well as foreign ownership of neighboring firms. Contagion among exporters and among foreign-owned firms, respectively, amplify shocks to the profitability of these activities to a large extent. These findings are established through the estimation of a spatial bivariate probit model.
    Keywords: Firm-Level Exports, Firm-Level Foreign Ownership, Contagion, Spatial Econometrics, Chinese Firms
    JEL: C11 C31 C35 F14 F23 L22 R10
    Date: 2018–04
  3. By: Emanuele Felice (Università degli Studi "G. d'Annunzio" Chieti - Pescara)
    Abstract: This paper explores the evolution of Italy's regional inequality in the long run, from around Unification (1871) until our days (2011). To this scope, a unique and up-to-date dataset of GDP per capita, GDP per worker (productivity) and employment, at the NUTS II level and at current borders, for the whole economy and its three branches - agriculture, industry, services - is here presented and discussed. Sigma and beta convergence are tested for GDP per capita, productivity and workers per capita (employment/population). Four phases in the history of regional inequality in post-unification Italy are confronted: mild divergence (the liberal age), strong divergence (the two world wars and Fascism), general convergence (the golden age) and the "two-Italies" polarization. In this last period, for the first time GDP and productivity, as well as workers per capita and productivity, have been following opposite paths: the North-South divide increased in GDP, decreased in productivity.
    Keywords: Italy, regional convergence, long-run growth, economic geography, institutions
    JEL: O11 O18 O52 N13 N14
    Date: 2017–08
  4. By: Antonelli, Cristiano; Feder, Christophe; Quatraro, Francesco (University of Turin)
    Abstract: Technological congruence implements the analysis of directed technological change showing how the match between the relative size of outputs’ elasticity and the relative abundance and cost of production factors has powerful effects on total factor productivity (TFP). Smart specialization strategies can rely upon technological congruence to support the introduction and diffusion of new directed technologies characterized by the best mix of factors relative cost -as determined by pecuniary externalities in the regional factor markets- and output elasticity. The evidence of 278 European regions in the years 1980-2011 confirms that the levels and the changes in technological congruence, brought about by the introduction of directed technological changes, have significant effects on the levels and the changes of TFP. The key policy implication is that the optimal S3 policy mix should not only look at the history of local industrial or technological specializations, but it should also take into account the pecuniary externalities that characterize local factor markets to promote technological changes directed to augmenting the output elasticity of the cheaper regional production factors.
    Date: 2018–04
  5. By: Eduardo A. Haddad; Fatima Ezzahra Mengoub, Vinicius A. Vale
    Abstract: This paper reports the results of an application using an interregional input-output matrix for Morocco together with regional information on water consumption by sectors. We develop a trade-based index that reveals the relative water use intensities associated with specific interregional and international trade flows. We estimate, for each flow associated with each origin-destination pair, measures of trade in value added and trade in water that are further used to calculate our index. We add to the existing literature on virtual water flows by encompassing the subnational perspective in the case study of a country that shows a “climate divide†: while a great part of the southern territory is located in the Sahara Desert, with serious water constraints, the northern part is relatively more privileged with access to this natural resource. Furthermore, we compare that Trade-Based Index of Water Intensity to similar metrics related to the use of other natural resources.
    Keywords: Water accounting; integrated ecologic-economic modelling; interregional input-output.
    JEL: Q25 Q56 C67 D57 R15
    Date: 2018–05–21
  6. By: Ralf Bebenroth (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Pao-Lien Chen (Institute of Technology Management National Tsing Hua University)
    Abstract: This paper investigates whether foreign firms overtake better local targets relative to domestic firms. Building on the geographic proximity and the value creation argument, we make predictions about whether domestic or foreign firms "cherry pick" the targets or "grab lemons". Our findings from a sample of local targets in Japan acquired by domestic and cross domestic acquirers show that both groups cherry-pick local targets, but they evaluate them differently. Targets with a better financial performance are more likely overtaken by domestic acquirers whereas those with a larger employee or market size are more likely overtaken by foreign acquirers.
    Keywords: Cross-border acquisitions, Target selection, Cherry-picking, Geographic proximity, Value creation
    Date: 2018–05

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