nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒07‒09
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Generation of regional input-output tables: a spatial econometric approach with illustrative simulations for France,Germany and Poland By Andrzej Toroj
  2. Cities and the Structure of Social Interactions: Evidence from Mobile Phone Data By Konstantin Buechel, Maximilian von Ehrlich
  3. “What drives the spatial wage premium for formal and informal workers? The case of Ecuador” By Alessia Matano; Moisés Obaco; Vicente Royuela
  4. Rethinking Path Creation: A Geographical Political Economy Approach By Danny Mackinnon; Stuart Dawley; Andy Pike; Andrew Cumbers
  5. Geography Dictates, But How? Topography, Spatial Concentration and Sectoral Diversification By Chowdhury, Mohammad Tarequl Hasan; Rahman, Muhammad Habibur; Ulubasoglu, Mehmet Ali
  6. The Housing Market Impacts of Constraining Second Home Investments By Christian A. L. Hilber, Olivier Schoeni
  7. The Nexus of Entrepreneurship and Regional Development By Fischer, Manfred M.; Nijkamp, Peter
  8. Regional economic disparities in Finland By Fornaro, Paolo
  9. Fast Track to Growth? The Impact of Railway Access on Regional Economic Development in 19th Century Switzerland By Konstantin Buechel, Stephan Kyburz
  10. Historical Roots of Entrepreneurial Culture and Innovation Activity - An Analysis for German Regions By Michael Fritsch; Michael Wyrwich; Martin Obschonka
  11. What kinds of regional innovation systems occur around federal agencies? By Martin Warland
  12. Tourism, amenities, and welfare in an urban setting By G. Lanzara; G. A. Minerva
  13. Unternehmensgründungen und Hochschulen: Eine Analyse der Bedeutung von universitärer Entrepreneurship-Bildung und Clustermitgliedschaften auf regionale Unternehmensgründungen By Bollmann, Tobias

  1. By: Andrzej Toroj
    Abstract: This paper investigates the construction of multisector-multiregion input-output tables by using spatial econometric methods. I demonstrate that, under reasonable assumptions, the problem of finding Leontief's technical coeffecients can be formulated as a modified multi-equation spatial Durbin model and the missing parameters can be estimated via maximum likelihood. The resulting coefficients are computed as a function of country-wide coeffiecients, as well as distance and regional-sectorial data on value added. The statistical performance of the model is scrutinized and the method is illustrated with simulations of regional (NUTS-3 level) economic impact assessment - for generic companies located in Southern France, Germany and Poland.
    Keywords: input-output modelling, GRIT(generation of regional input-output tables), spatial econometrics, SDM (spatial Durbin model), regional EIA (economic impact assessment)
    JEL: C31 C67 R12 R15
    Date: 2018–05
  2. By: Konstantin Buechel, Maximilian von Ehrlich
    Abstract: Social interactions are considered pivotal to urban agglomeration forces. This study employs a unique dataset on mobile phone calls to examine how social interactions differ across cities and peripheral areas. We first show that geographical distance is highly detrimental to interpersonal exchange. We then reveal that individuals residing in high-density locations do not benefit from larger social networks, but from a more efficient structure in terms of higher matching quality and lower clustering. These results are derived from two complementary approaches: Based on a link formation model, we examine how geographical distance, network overlap, and sociodemographic (dis)similarities impact the likelihood that two agents interact. We further decompose the effects from individual, location, and time specific determinants on micro-level network measures by exploiting information on mobile phone users who change their place of residence.
    Keywords: Social Interactions; Agglomeration Externalities; Network Analysis; Sorting
    JEL: R1 R23 Z13 D85
    Date: 2016–12
  3. By: Alessia Matano (AQR-IREA, University of Barcelona,); Moisés Obaco (AQR-IREA, University of Barcelona,); Vicente Royuela (AQR-IREA, University of Barcelona,)
    Abstract: This article investigates the incidence of agglomeration externalities in a typical developing country, Ecuador. In particular, we analyze the role of the informal sector within these relations, since informal employment accounts for a significant part of total employment in the developing countries. Using individual level data and instrumental variable techniques, we investigate the impact of spatial externalities, in terms of population size and local specialization, on the wages of workers in Ecuadorian cities. The results show that spatial externalities matter also for a typical developing country, especially as far as urbanization externalities are concerned. Moreover, analysis of the interaction between spatial externalities and the informal economy shows a general penalization for informal workers in terms of benefits arising from agglomeration externalities. Finally, by investigating the possible channels behind the heterogeneity found in spatial agglomeration gains between formal and informal workers, we show that the advantages from agglomeration for formal workers may well be accounted for by positive sorting and better gains from job changes, while for informal workers they arise from positive learning externalities.
    Keywords: Agglomeration Externalities; Developing Economies; Informal Employment; Workers’ Wages; FUAs; Ecuador. JEL classification: J31, J46, R23, R12
    Date: 2018–06
  4. By: Danny Mackinnon; Stuart Dawley; Andy Pike; Andrew Cumbers
    Abstract: A burgeoning strand of Evolutionary Economic Geography (EEG) research is addressing questions of regional path creation, based upon the idea that place-specific legacies and conditions play a critical role in supporting the emergence of new economic activities. Yet there has been little effort thus far to take stock of this emerging body of research. In response, the aims of this paper are to offer a fresh synthesis of recent work and to develop a broader theoretical framework to inform future research. First, it presents a critical appraisal of the state of the art in path creation research. In an effort to address identified gaps in EEG research, this incorporates insights from sociological perspectives, the global production networks (GPN) approach and transition studies. Second, the paper?s development of a systematic theoretical framework is based upon the identification of key dimensions of path creation and their constitutive inter-relations. This contribution is underpinned by a geographical political economy (GPE) approach which provides the ontological basis for the integration of the five key dimensions of path creation within an overarching framework and the positioning of regional processes in relation to the broader dynamics of uneven development. Informed by GPE, the argument is that knowledgeable actors, operating within multi-scalar institutional environments, create paths through the strategic coupling of regional and extra-regional assets to mechanisms of path creation and associated markets. To inform further research, the paper outlines four concrete propositions regarding the operation of path creation processes in different types of regions and explores these through case studies of Berlin and Pittsburgh.
    Keywords: Entrepreneurship, Path creation, evolutionary economic geography, geographical political economy, agency, strategic coupling
    JEL: R11
    Date: 2018–06
  5. By: Chowdhury, Mohammad Tarequl Hasan; Rahman, Muhammad Habibur; Ulubasoglu, Mehmet Ali
    Abstract: This study investigates the ways in which terrain ruggedness affects sectoral diversification. A cross-country analysis using data from 142 countries over the period 1970‒2007 documents an inverted U-shaped link between terrain ruggedness and sectoral diversification, which mainly works through the extensive margin of diversification. A within-country analysis based on United States (US) state-level data over the period 1997‒2011 confirms this non-monotonic relationship. The within-country analysis further reveals that an important mechanism through which terrain ruggedness affects sectoral diversification is the spatial concentration of economic activity, as measured by the concentration of satellite-based night lights.
    Keywords: sectoral diversification, spatial concentration, extensive margin, intensive margin, terrain ruggedness.
    JEL: O11 R12
    Date: 2018–05–31
  6. By: Christian A. L. Hilber, Olivier Schoeni
    Abstract: We investigate how political backlash against wealthy second home investors in high-amenity places – tourist areas and superstar cities – affects local residents. We exploit a quasi-natural experiment: the ‘Swiss Second Home Initiative’ (SHI), which banned the construction of new second homes in desirable tourist locations. Consistent with our model, we find that the SHI lowered transaction prices of primary homes in affected areas by around 12% but did not adversely affect prices of second homes. Our findings suggest that the negative effect on local economies dominated positive amenity-preservation effects. Constraining second home investments may reinforce rather than reduce wealth inequality.
    Keywords: Second homes; wealth inequality; land use regulation; house prices; homeownership; real estate investments
    JEL: D63 G12 R11 R21 R31 R52
    Date: 2016–08
  7. By: Fischer, Manfred M.; Nijkamp, Peter
    Abstract: This chapter offers a review on modern entrepreneurship analysis, against the background of regional development. Regions with an entrepreneurial culture tend to be forerunners in a competitive economic process. After a conceptual discussion on the importance and the measurement of entrepreneurship, the contribution discusses critical success factors and key determinants of entrepreneurship. Next, much focus is laid on the geography of entrepreneurship as well as on industrial agglomeration, while also due attention is paid to the relevance of networks for modern entrepreneurship. The chapter concludes with some retrospective and prospective remarks.
    Keywords: Entrepreneurship, definition and measurement issues, spatial aspects of entrepreneurship, regions with an entrepreneurial culture, cluster agglomeration factors, entrepreneurship and networks
    Date: 2018–06–18
  8. By: Fornaro, Paolo
    Abstract: In this note, I study the Finnish regional dispersion of economic indicators such as the GDP per capita, labour productivity, the employment rate and the compensation of employees. Moreover, I examine the regional-level correlation between these variables. The results are then compared with what has been found for the German and Italian economies. Finnish regional economies display substantial variation, but their GDP per capita, productivity and employment rate have converged. However, the compensation of employees has diverged. Compared to Germany and Italy, the Finnish economy has a lower regional dispersion, with a similar convergence process as in Germany. The correlation between regional productivity and the employment rate is lower than what is found in Italy and Germany, and the same holds for productivity and wages. The picture gathered from this analysis is mixed. Convergence of economic conditions is certainly positive, but the divergence of the compensation of employees can be problematic for the long-term sustainability of the Finnish regional markets. If well-paid jobs concentrate in richer regions, there will be higher incentives for young and well-educated workers to move away from peripheral (in economic terms) areas, which would be at risk of stagnation.
    Keywords: Convergence, regional inequalities, productivity, wages
    JEL: O47 R11 R23
    Date: 2018–06–25
  9. By: Konstantin Buechel, Stephan Kyburz
    Abstract: We study the effect of railway access on regional development in 19th century Switzerland. The identification strategy in our analysis of geo-referenced railway network information, population growth rates, sectoral work shares and body height, relies on panel data techniques and an inconsequential units IV approach. Gaining railway access increased annual population growth by 0.4 percentage points compared to unconnected municipalities, mainly via the local migration balance. Railway improvements also promoted structural shifts from the primary to the secondary/tertiary sectors, and marginally accelerated body height growth.
    Keywords: Railway Access, Regional Development, Population Growth, Structural Change, Body Height, Switzerland
    JEL: I30 N33 N73 O18
    Date: 2016–08
  10. By: Michael Fritsch (FSU Jena); Michael Wyrwich (FSU Jena); Martin Obschonka (Queensland University of Technology Business School Brisbane)
    Abstract: There is a research gap with respect to understanding the role of entrepreneurial culture and tradition for actual start-up behaviour. We combine historical self-employment data (entrepreneurial tradition) with a psychological measure for entrepreneurial attitudes (entrepreneurial culture). The results reveal a positive relationship between the historical level of self-employment in a region and the presence of people with an entrepreneurial personality structure today. Our measure for a regional culture of entrepreneurship is positively related not only to the level of new business formation but also the amount of innovation activity.
    Keywords: Entrepreneurship, self-employment, new business for mation, personality traits, culture, innovation
    JEL: L26 N94 O11 O30 R11
    Date: 2018–06–25
  11. By: Martin Warland
    Abstract: Scholars in innovation studies increasingly highlight that federal governments on the demand side spur innovation activities of government contractors. While government contractors tend to concentrate in capital cities, the kinds of regional innovation system (RIS) that occur around federal agencies remain poorly understood. Drawing on the RIS approach, this paper examines the actors and activities that are placed at the interface between public demand and private supply. The analysis draws on 122 interviews with RIS actors in Bern, The Hague, Ottawa and Washington, D.C. The results indicate that intermediaries play crucial roles in stimulating knowledge exchange between public demand and private supply. One important role relates to getting involved in policy formulation in order to enhance interactive learning in federal procurement practices. In interaction inspiring federal procurement policies, government contractors generate technical knowledge that they also can exploit through private sector clients.
    Date: 2016–07
  12. By: G. Lanzara; G. A. Minerva
    Abstract: Using data on Italian cities, we document that, over the period 2001 – 2011, the number of establishments and employment in some key service industries are positively related to the inflow of tourists. We then build a general equilibrium model of small open cities to study the impact of tourism on endogenous amenities, factors’ allocation across sectors, prices, and welfare. Tourism has two main effects on the urban economy: first, consistently with the observed pattern in the data, it increases the number of firms (an endogenous consumption amenity) and employment in the non-tradable sector; second, it increases prices. In the model tourism may hurt the resident population: with unequal land endowments, poorer residents are hurt by tourism because the rise in city prices offsets the positive impact on the urban consumption amenity. Along with several other extensions to the baseline model, we study the interplay of historical (exogenous) amenities, tourism and residents welfare in a system of two cities.
    JEL: R13 R31 R32
    Date: 2018–06
  13. By: Bollmann, Tobias
    Abstract: Die räumliche Konzentration von wissensbasierten Unternehmensgründungen wird sowohl in der Wissenschaft als auch in der Politik diskutiert. Das vorliegende Arbeitspapier untersucht die Bedeutung universitärer Entrepreneurship-Bildung auf regionale Unternehmensgründungen und inwiefern dies durch Clustermitgliedschaften der betrachteten Hochschulen beeinflusst wird. Somit wird sowohl die steigende Bedeutung von Hochschulen als wissenserzeugende Institutionen als auch die regional-ökonomische Debatte um Innovationscluster berücksichtigt. Unter Verwendung von EXIST-Gründerstipendien gelingt es, einen positiven Zusammenhang zwischen regionalen Gründungsaktivitäten und Entrepreneurial Education festzustellen. Darüber hinaus kann eine positive Beeinflussung dieses Zusammenhangs durch Clustermitgliedschaften hinsichtlich der Qualität der Spillover identifiziert werden. Die Ergebnisse weisen somit auf potenzielle Optimierungsmöglichkeiten im Zusammenspiel der Wirtschafts- und Wissenschaftspolitik hin.
    Date: 2018

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.