nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒07‒23
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Determinants of FDI Attraction in the Manufacturing Sector in Mexico, 1999-2015 By Fonseca Felipe J.; Llamosas-Rosas Irving
  2. Geography, Ties and Knowledge Flows: Evidence from Citations in Mathematics By Keith Head; Yao Amber Li; Asier Minondo
  3. GVCs and the Endogenous Geography of RTAs By Lionel Fontagné; Gianluca Santoni
  4. Identifying Neighborhood Effects among Firms: Evidence from location lotteries of the Tokyo Tsukiji fish market By NAKAJIMA Kentaro; TESHIMA Kensuke
  5. Quantitative analysis on the disparity of regional economic development in China and its evolution from 1952 to 2000 By Jianhua Xu; Nanshan Ai; Yan Lu; Yong Chen; Yiying Ling; Wenze Yue
  6. Decentralization of public expenditure and growth in Italy: Does the composition matter? By Floriana Cerniglia - Riccarda Longaretti - Alessandra Michelangeli
  7. Immigration, Housing Rents, and Residential Segregation: Evidence from Syrian Refugees in Turkey By Balkan, Binnur; Tok, Elif Ozcan; Torun, Huzeyfe; Tumen, Semih
  8. The Challenge for Regional Development By Geoffrey J.D. Hewings
  9. Climate change, crop productivity and regional growth disparity in Bangladesh: What does a district-level regional CGE model tell us? By Sudeshna Paul; Athula Naranpanawa; Jay Bandaralage; Tapan Sarker
  10. Shift-Share Designs: Theory and Inference By Rodrigo Ad\~ao; Michal Koles\'ar; Eduardo Morales
  11. Institutions and geography: A "two sides of the same coin" story of primary energy use in Sub-Saharan Africa. By Laté Ayao Lawson; Phu Nguyen-Van
  12. Entrepreneurship Culture, Knowledge Spillovers, and the Growth of Regions By Michael, Stuetzer; David, Audretsch; Martin, Obschonka; Samuel, Gosling; Jason, Rentfrow; Jeff, Potter
  13. Roadways, Input Sourcing, and Patterns of Specialization By Esteban Jaimovich
  14. The role of demand in land re-development By Carozzi, Felipe

  1. By: Fonseca Felipe J.; Llamosas-Rosas Irving
    Abstract: Using an up-to-date database that improves the identification of the destination of the Foreign Direct Investment (FDI) among Mexican states and spatial panel econometric models that quantify the potential interactions and spillover effects, we analyze the main characteristics that help understand the regional distribution of manufacturing FDI in Mexico. Our main findings indicate the presence of a positive spatial relationship among states' FDI; for example, a higher investment creates a positive spillover effect on neighboring states' FDI and positive direct and indirect effects of human capital, agglomeration and states' fiscal margin. Based on the results of this research, key implications for public policy oriented to strengthen the FDI reside in increasing the average education level and improving tax revenue of Mexican states.
    Keywords: FDI;spatial panel econometric models;spillover effects
    JEL: C21 C23 R12
    Date: 2018–06
  2. By: Keith Head; Yao Amber Li; Asier Minondo
    Abstract: Using data on academic citations, career and educational histories of mathematicians, and disaggregated distance data for the world's top 1000 math departments, we study how geography and ties affect knowledge flows among scholars. The ties we consider are co-authorship, past colocation, advisor-mediated relationships, and alma mater relationships (holding a Ph.D. from the institution where another scholar is affiliated). Logit regressions using fixed effects that control for subject similarity, article quality, and temporal lags, show linkages are strongly associated with citation. Controlling for ties generally halves the negative impact of geographic barriers on citations. Ties matter more for less prominent and more recent papers and show no decline in importance in recent years. The impact of distance - controlling for ties - has fallen and is statistically insignificant after 2004.
    Keywords: knowledge diffusion, distance, borders, networks, academic genealogy
    JEL: F1 O3 R1
    Date: 2018–06
  3. By: Lionel Fontagné (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Gianluca Santoni (CEPII - Centre d'études prospectives et d'informations internationales)
    Abstract: There has been considerable attention paid to the endogenous nature of regional trade agreements Geography, economic size, or common history help predicting signed agreements. However, not all signed RTAs are "natural" according to economic determinants, as trade negotiations can be used as a tool of external policy. Recent developments in terms of structural gravity help clarifying this debate by taking account of all theoretically relevant determinants of bilateral trade, as well as general equilibrium effects of signing an agreement. Indeed, the endogeneity of trade arrangements has a time dimension and is related to firm strategies. These are the two mechanisms addressed in this paper. We estimate the time-varying probability for a country pair to sign a trade agreement and build upon structural gravity in general equilibrium to determine how the patterns of Global Value Chains shape the evolving geography of optimal trade agreements. Our results confirm that the endogenous geography of RTAs is shaped by the development of GVCs.
    Abstract: Une grande attention a été accordée à la nature endogène des accords commerciaux régionaux. La géographie, la taille économique ou l'histoire commune aident à prévoir les accords régionaux (ACR) signés. Cependant, tous les ACR signés ne sont pas "naturels" du point de vue des seuls déterminants économiques, dans la mesure où les négociations commerciales peuvent être utilisées comme un outil de politique extérieure.Les développements récents en termes de modèles structurels de gravité des échanges aident à clarifier ce débat en prenant en compte l'ensemble des déterminants théoriques du commerce bilatéral. En effet, l'endogénéité des accords commerciaux a une dimension temporelle et est liée aux stratégies des firmes. Ces deux mécanismes sont abordés ici : nous estimons a probabilité pour chaque paire de pays de signer un accord commercial et utilisons la gravité structurelle en équilibre général pour déterminer comment les chaînes de valeur mondiales façonnent la géographie optimale des accords commerciaux. Nos résultats confirment que la géographie endogène des ACR est façonnée par le développement des chaînes de valeurs mondiales.
    Date: 2018–04–11
  4. By: NAKAJIMA Kentaro; TESHIMA Kensuke
    Abstract: The theories of retail cluster formation suggest that stores perform better when surrounded by other stores with diverse complementary products because these stores attract consumers with love of variety preference. We analyze the impact of the diversity of neighboring stores among intermediate wholesalers located in the Tokyo Tsukiji fish market by exploiting a unique feature of their shop locations within the market in which their locations are determined every 4-10 years by relocation lotteries, generating exogenous variation in the diversity of neighboring stores. First, we confirm that these intermediate wholesalers' shop locations are indeed randomly distributed. Then, we find that the diversity of the types of neighboring firms positively affect the performance of small-sized and specialized firms. We find no effect of the characteristics of close neighbors who do not face the same corridor and thus do not share the flow of shoppers. This provides evidence that our results are not due to factors other than shopping behavior, such as technology spillovers. Finally, to illustrate the general applicability of the mechanism we find, we use the Census of Commerce covering all of the retailers in Tokyo to show that smaller and more specialized retailers are more likely to be located together while larger and standardized ones are isolated. Overall, our analysis shows that the complementarity of products between specialized diverse stores is an important factor behind urban agglomeration.
    Date: 2018–07
  5. By: Jianhua Xu; Nanshan Ai; Yan Lu; Yong Chen; Yiying Ling; Wenze Yue
    Abstract: Domestic and foreign scholars have already done much research on regional disparity and its evolution in China, but there is a big difference in conclusions. What is the reason for this? We think it is mainly due to different analytic approaches, perspectives, spatial units, statistical indicators and different periods for studies. On the basis of previous analyses and findings, we have done some further quantitative computation and empirical study, and revealed the inter-provincial disparity and regional disparity of economic development and their evolution trends from 1952-2000. The results shows that (a) Regional disparity in economic development in China, including the inter-provincial disparity, inter-regional disparity and intra-regional disparity, has existed for years; (b) Gini coefficient and Theil coefficient have revealed a similar dynamic trend for comparative disparity in economic development between provinces in China. From 1952 to 1978, except for the "Great Leap Forward" period, comparative disparity basically assumes a upward trend and it assumed a slowly downward trend from 1979 to1990. Afterwards from 1991 to 2000 the disparity assumed a slowly upward trend again; (c) A comparison between Shanghai and Guizhou shows that absolute inter-provincial disparity has been quite big for years; and (d) The Hurst exponent (H=0.5) in the period of 1966-1978 indicates that the comparative inter-provincial disparity of economic development showed a random characteristic, and in the Hurst exponent (H>0.5) in period of 1979-2000 indicates that in this period the evolution of the comparative inter-provincial disparity of economic development in China has a long-enduring characteristic.
    Date: 2018–06
  6. By: Floriana Cerniglia - Riccarda Longaretti - Alessandra Michelangeli
    Abstract: In this paper we exploit data at regional level on decentralized public expenditure provided by Conti pubblici territoriali from 1996 to 2014 and we decompose decentralized public expenditure into current and capital spending. The aim is to disentangle their specific effect on economic growth. Since literature does not provide unanimous indication about the effect of different component of expenditure on growth, we consider a generalized additive model, which is a semi-parametric estimation method that allows more flexibility than conventional estimation techniques. Our findings show a on-linear effect, that is different according to categories of expenditure. More specifically, the effect of capital expenditure is positive, while, decentralized current expenditure tends to have a negative effect on the rate of economic growth.
    Keywords: decentralization; capital expenditure; current expenditure, growth
    JEL: R11 R12 R23
    Date: 2017
  7. By: Balkan, Binnur (Central Bank of Turkey); Tok, Elif Ozcan (Central Bank of Turkey); Torun, Huzeyfe (Central Bank of Turkey); Tumen, Semih (TED University)
    Abstract: The massive inflow of Syrian refugees is argued to drastically affect various social and economic outcomes in the hosting countries and regions. In this paper, we use micro-level data to investigate whether the Syrian refugee inflows have affected the market for housing rentals in Turkey. The unexpected arrival of a large number of refugees due to civil conflict in Syria is used to construct a quasi-experimental design. Since the construction of new housing units takes a long time, refugee inflow resembles a positive demand shock to the sector. We find that the refugee inflows have led to an increase in the rents of higher-quality housing units, while there is no statistically significant effect in the rents of lower-quality units. This finding supports a residential segregation story, which suggests that the refugee wave has increased the demand for native-dominant neighborhoods with better amenities especially among natives. We argue that negative attitudes towards refugees – potentially due to refugee-native conflict along several dimensions – may be generating this result.
    Keywords: Syrian refugees, immigration, housing rents, quasi-experimental design, Turkey
    JEL: C21 F22 R21 R23
    Date: 2018–06
  8. By: Geoffrey J.D. Hewings (Regional Economics Applications Laboratory (REAL), University of Illinois)
    Abstract: This working paper reproduces the speech by Professor Geoffrey J.D. Hewings at the Nomination Ceremony as Member of the Andalusian Regional Science Academy, on 28 May 2018 at Loyola Andalusia University.Professor Hewings reviews the evolution of Regional Science since the sixties, highlighting the key and forgotten role of the space when the outcomes of the economic policies are assessed in terms of developments. In addition,the challenges posed by demographic change are drawn, pointing out the future research directions to be addressed by regional modelers.
    Keywords: Regional Science, Regional Development, Demographic changes.
    JEL: J11 O18 R11 R58
    Date: 2018–07
  9. By: Sudeshna Paul; Athula Naranpanawa; Jay Bandaralage; Tapan Sarker
    Keywords: Climate change, Crop productivity, Regional disparities, Computable General Equilibrium model, Bangladesh
    JEL: Q54 R11 D58
    Date: 2018–03
  10. By: Rodrigo Ad\~ao; Michal Koles\'ar; Eduardo Morales
    Abstract: Since Bartik (1991), it has become popular in empirical studies to estimate regressions in which the variable of interest is a shift-share, such as when a regional labor market outcome is regressed on a weighted average of observed sectoral shocks, using the regional sector shares as weights. In this paper, we discuss inference in these regressions. We show that standard economic models imply that the regression residuals are likely to be correlated across regions with similar sector shares, independently of their geographic location. These correlations are ignored by inference procedures commonly used in these regressions, which can lead to severe undercoverage. In regressions studying the effect of randomly generated placebo sectoral shocks on actual labor market outcomes in U.S. commuting zones, we find that a 5% level significance test based on standard errors clustered at the state level rejects the null of no effect in up to 45% of the placebo interventions. We derive novel confidence intervals that correctly account for the potential correlation in the regression residuals.
    Date: 2018–06
  11. By: Laté Ayao Lawson; Phu Nguyen-Van
    Abstract: Why do coastal located African countries seem more energies consuming? Do institutional and geographical factors matter to energy consumption as in the case of economic growth? Are there any spatial spillovers in primary energy use in Sub-Saharan Africa? To answer these questions which have been surprisingly few addressed in the existing literature, we empirically assess the link between energy use and economic growth in SSA, exploiting spatial data analysis methods. Our empirical results highlight the existence of positive spatial spillovers in primary energy use. We also derive factors (income, population dynamics and urbanization) explaining why coastal located countries are more energy intensive than inland ones. Furthermore, good political institutions encourage energy consumption, connoting a two side of the same coin phenomenon. Globally, our results impel African countries to develop alternative energies strategies and to deploy energy management policies, since increases in the demand for energies and related environmental consequences are expected in a near future.
    Keywords: Energy, institutions, locational and spatial effects, development.
    JEL: C23 O55 Q43 Q56
    Date: 2018
  12. By: Michael, Stuetzer; David, Audretsch; Martin, Obschonka; Samuel, Gosling; Jason, Rentfrow; Jeff, Potter
    Abstract: An extensive literature has emerged in regional studies linking organization-based measures of entrepreneurship (e.g., self-employment, new start-ups) to regional economic performance. A limitation of the extant literature is that the measurement of entrepreneurship is not able to incorporate broader conceptual views, such as behaviour, of what actually constitutes entrepreneurship. This paper fills this gap by linking the underlying and also more fundamental and encompassing entrepreneurship culture of regions to regional economic performance. The empirical evidence suggests that those regions exhibiting higher levels of entrepreneurship culture tend to have higher employment growth. Robustness checks using causal methods confirm this finding.
    Keywords: Entrepreneurship; Entrepreneurship Culture; Regional Development; Economic Growth
    JEL: L26 M13 N9 N91 O3 O31
    Date: 2018
  13. By: Esteban Jaimovich
    Abstract: We propose a model where the internal transport network facilitates the sourcing of intermediate goods from different locations. A denser internal transport network promotes thus the growth of industries that rely on a large variety of inputs. The model shows that heterogeneities in internal transport infrastructures can become a key factor in shaping comparative advantage and specialization. Moreover, when sufficiently pronounced, such heterogeneities may even overshadow more traditional sources of specialization based on factor productivities. Evidence based on industry-level trade data grants support to the main prediction of the model: countries with denser road networks export relatively more in industries that exhibit broader input bases. We show that this correlation is robust to several possible confounding effects proposed by the literature, such as the impact of institutions on specialization in complex goods. Furthermore, we show that a similar correlation arises as well when the density of the local transport network is measured by the density of their internal waterways, and also when road density is instrumented with measures of terrain roughness.
    Keywords: International Trade, Comparative Advantage, Internal Transportation Costs
    JEL: F11 O18 R12
    Date: 2018–06–28
  14. By: Carozzi, Felipe
    Abstract: Several governments throughout the world apply policies aimed to re-mediate and recover vacant or idle land for other uses. This paper provides estimates of the price sensitivity of redevelopment, a crucial parameter for the success of these policies. My cross-sectional estimates measure how prices affect long-run conversion of unused or underused previously developed land in England. In order to solve the classical problem in the estimation of supply elasticities from market outcomes, I exploit school quality information and school admission boundaries to obtain a demand-shifter that is orthogonal to re-development costs. Estimation is conducted using a boundary discontinuity design based on this instrument. Results show that the probability of re-development is effectively sensitive to housing prices. Estimates indicate that a 1% increase in housing prices leads to a 0.07 percentage point reduction in the fraction of hectares containing brownfield land. Back-of-the envelope calculations using these estimates suggest that a large increase of 21% in prices across locations, or an equivalent subsidy, would be required to eliminate most of these vacant or underused land plots.
    Keywords: re-development; supply elasticity; brownfields
    JEL: R14 R31
    Date: 2018–05–01

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