nep-geo New Economics Papers
on Economic Geography
Issue of 2018‒10‒08
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Incubators, Accelerators and Regional Economic Development By Margarida Madaleno; Max Nathan; Henry Overman; Sevrin Waights
  2. Actor Fluidity and Knowledge Persistence in Regional Inventor Networks By Michael Fritsch; Moritz Zöllner
  3. Impact Assessment of Scenarios of Interregional Transfers in Colombia By Eduardo A. Haddad; Luis A. Galvis; Inácio F. Araújo-Junior; Vinicius A.Vale
  4. Measuring polycentricity via network flows, spatial interaction, and percolation By Somwrita Sarkar; Hao Wu; David Levinson
  6. An Assessment of Association between Natural Resources Agglomeration and Unemployment in Pakistan By Ali, Amjad; Zulfiqar, Kalsoom
  7. Green industrial path development in different types of regions By Grillitsch, Markus; Hansen, Teis
  8. The formation and take-off of the Sao Paulo automobile-industry cluster By Tomàs Fernández-de-Sevilla; Armando J Dalla Costa
  9. The Regional Emergence of Innovative Start-ups: A Research Agenda By Michael Fritsch
  10. Urban Wage Premia, Cost of Living, and Collective Bargaining By Marianna Belloc; Paolo Naticchioni; Claudia Vittori
  11. Oligopolistic Competition and Economic Geography By Zhou, Haiwen
  12. Common Factors and Spatial Dependence: An Application to US House Prices By Yang, Cynthia Fan
  13. MCMC estimation of panel gravity models in the presence of network dependence By LeSage, James P.; Fischer, Manfred M.
  14. Mobility of Highly Skilled Individuals and Local Innovation Activity By Drivas, Kyriakos; Economidou, Claire; Karamanis, Dimitris; Sanders, Mark
  15. Adam Smith revisited: coal and the location of the woollen manufacture in England before mechanization, c. 1500-1820 By Keith Sugden; Sebastian A.J. Keibek; Leigh Shaw-Taylor

  1. By: Margarida Madaleno; Max Nathan; Henry Overman; Sevrin Waights
    Abstract: A growing wave of co-location programmes promises to boost growth for young firms. Despite great public and policy interest we have little idea whether such programmes are effective. This paper categorises accelerators and incubators within a larger family of 'co-location' interventions. We then develop a single framework to theorise workspace-level impacts. We summarise available evaluation evidence and sketch implications for regional economic policy. We find clear evidence programmes are effective overall. But we know little about how effects operate - or who benefits. Providers and policymakers should experiment further to establish optimal designs.
    Keywords: incubators, accelerators, entrepreneurship, clusters, cities, economic development
    JEL: L26 O32 R30 R58
    Date: 2018–09
  2. By: Michael Fritsch (FSU Jena, School of Economics and Business Administration); Moritz Zöllner (FSU Jena, School of Economics and Business Administration)
    Abstract: The development of inventor networks is characterized by the addition of a significant number of new inventors, while a considerable number of incumbent inventors discontinue. We estimate the persistence of knowledge in regional inventor networks using alternative assumptions about knowledge transfer. Based on these estimates we analyze how the size and structure of a network may influence knowledge persistence over time. In a final step, we assess how persistent knowledge as well as the knowledge of new inventors effect the performance of regional innovation systems (RIS). The results suggest that the knowledge of new inventors is much more important for RIS performance than old knowledge that persists.
    Keywords: Innovation networks, knowledge, RandD cooperation, patents, persistence
    JEL: O3 R1 D2 D8
    Date: 2018–09–26
  3. By: Eduardo A. Haddad (University of Sao Paulo); Luis A. Galvis (Banco de la República de Colombia); Inácio F. Araújo-Junior (University of Juiz de Fora); Vinicius A.Vale (Federal University of Parana)
    Abstract: En este trabajo se evalúan los efectos económicos de diferentes escenarios de asignación regional empleados en el esquema actual de transferencias interregionales en Colombia, destacando los posibles compromisos entre la eficiencia y la equidad regional. Las simulaciones realizadas en el trabajo, utilizando un modelo de equilibrio general computable interregional, contribuyen al análisis del impacto del crecimiento relacionado con algunos de los objetivos generales que persiguen los gobiernos centrales al asignar transferencias subnacionales a los gobiernos locales. En este sentido, se simulan escenarios contra factuales en los que las políticas redistributivas están diseñadas para evaluar los posibles resultados del Producto Bruto Regional. Los resultados muestran que cuando la distribución se lleva a cabo sobre la base del tamaño de la población regional, hay ganancias potenciales en el crecimiento nacional junto con un aumento en las disparidades regionales. Sin embargo, cuando la distribución se lleva a cabo de acuerdo con otros criterios redistributivos, como el número de personas en condición de pobreza o las brechas horizontales de equidad fiscal, existen mejoras potenciales en la desigualdad regional, a pesar de estar acompañadas de efectos negativos del crecimiento. En este sentido, si se prioriza el criterio redistributivo para compensar la reducción del crecimiento, las regiones que enfrentan un aumento neto en las transferencias deben asignar los recursos adicionales para mejorar en términos de Productividad Total de los Factores (PTF), específicamente, priorizando en inversiones que mejoran la PTF en el largo plazo, tales como aquellas en capital humano enfocadas a la educación y la salud. **** ABSTRACT: We assess the economic effects of different scenarios of regional allocation of the current interregional transfers’ scheme in Colombia, highlighting potential tradeoffs between regional equity and efficiency. The simulations conducted in this work, using an interregional computable general equilibrium model, contribute to the analysis of the growth impact related to some of the broad objectives that central governments pursue when allocating subnational transfers to local governments. We simulate counterfactual scenarios in which redistributive policies are designed to assess potential Gross Regional Product (GRP) outcomes had they been applied to the Colombian economy. The results show that when the distribution is carried out based on regional population shares, there are potential gains in national growth together with an increase in regional disparities. However, when the distribution is carried out according to other redistributive criteria, such as the number of people impoverished or the horizontal equity gaps, there is a potential improvement in regional inequality despite negative growth effects. In this sense, if we prioritize the redistributive criterion in order to offset the reduction of growth, regions that face a net increase in transfers should allocate the additional resources to improve in terms of Total Factor Productivity (TFP), specifically, in long-term TFP-enhancing investments, such as human capital in the form of education and health outcomes.
    Keywords: Decentralization, regional inequalities, subnational transfers, descentralización, desigualdades regionales, transferencias subnacionales.
    JEL: H77 R12 R13 D58 O54
    Date: 2018–10
  4. By: Somwrita Sarkar; Hao Wu; David Levinson (TransportLab, School of Civil Engineering, University of Sydney)
    Abstract: Polycentricity is most commonly measured by location-based metrics (e.g. employment density or total number of workers, above a threshold, used to count the number of centres). While these metrics are good indicators of location ‘centricity’, the results are sensitive to threshold-choice. We consider here the alternate idea that a centre’s status depends on which other locations it is con- nected to in terms of trip inflows and outflows: this is inherently a network rather than a location idea. A set of flow and network-based centricity metrics for measuring metropolitan area poly- centricity using Journey-To-Work (JTW) data are presented: (a) trip-based, (b) density-based, and, (c) accessibility-based. Using these measures, polycentricity is computed and rank-centricity distributions are plotted to test whether these distributions follow Zipf-like or Chirstaller-like distributions. Further, a percolation theory framework is proposed for the full origin-destination (OD) matrix, where trip flows are used as a thresholding parameter to count the number of sub-centres. It is found that trip flows prove to be an effective measure to count and hierarchically organise metropolitan area sub-centres, and provide one way of dealing with the arbitrariness of defining a threshold on numbers of employed persons, employment density, or centricities to count sub-centres. These measures demonstrated on data from the Greater Sydney region show that the trip flow-based threshold and network centricities help to characterize polycentricity more robustly than the traditional number or density-based thresholds alone and provide unexpected insights into the connections between land use, transport, and urban structure.
    Keywords: Polycentricity, Journey-to-work, origin-destination flows, networks, accessibility, percolation
    JEL: R40 R12 R14 R23 R31 O18
    Date: 2018
  5. By: Emilie Arnoult (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique); Florent Sari (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UN - Université de Nantes - ECN - École Centrale de Nantes - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes, TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS - Centre National de la Recherche Scientifique)
    Date: 2018–09–21
  6. By: Ali, Amjad; Zulfiqar, Kalsoom
    Abstract: Mostly, economists believe that due to non-existence of agglomeration economies, there are less chances of employment spatial distribution in an economy. Following the strands of previous literature about agglomeration special impacts, this study has uplifted the curtain from some interesting realities. This study has examined the association between unemployment and natural resources agglomeration in Pakistan from 1980 to 2016. For measuring natural resources agglomeration, an index has been constructed based on coal production, oil production, forest area and agricultural land as a percentage of total land area. The study utilized autoregressive distributed lag (ARDL) method of co-integration. The results show that natural resources agglomeration, secondary school enrollment, foreign direct investment and inflation have a negative and significant impact on unemployment in Pakistan. The results reveal that population is putting a positive impact on unemployment in Pakistan. The study finds that natural resources agglomeration is an important factor for reducing unemployment in Pakistan. There are some other factors for agglomeration economies, i.e. Local economic policies, natural resources availability and amount of manpower for employment spatial distribution in Pakistan. So, efforts are needed to mega scale for exploration, proper usage and the functioning of natural resources in Pakistan.
    Keywords: unemployment, natural resources, inflation, foreign direct investment
    JEL: E24 N50 P24
    Date: 2018
  7. By: Grillitsch, Markus (Lund University); Hansen, Teis (Lund University)
    Abstract: As response to environmental challenges such as global warming and the extinction of species sustainable regional development has become a key policy objective. Regions, however, vary in their preconditions for green industrial path development. Taking existing regional industrial specialization patterns as a starting point, this paper develops a new typology linking regional preconditions to various pathways for green industrial path development. This provides the foundation for identifying place-based policy implications for growing clean industries in different types of regions, grounded in the emerging perspective in innovation studies on policies for transformative change. The paper thereby helps to understand the pathways for greening the economy in different regional contexts and how such green pathways can be promoted through policy.
    Keywords: Green growth; regional development; cleantech; industrial path development; place-based policy; regional policy
    JEL: O30 O38 P48 Q50 Q58 R10 R58
    Date: 2018–09–27
  8. By: Tomàs Fernández-de-Sevilla (Free University of Brussels); Armando J Dalla Costa (Federal University of Paraná)
    Abstract: "The bulk of the automotive-industry in Brazil, country which is ranked in the top-ten of world cars producer since the mid-1960s, has been concentrated around the city of São Paulo. We aim to explain the formation and growth of the São Paulo auto-industry cluster. In doing so, four explanations are used: the presence of external economies (Marshall, 1890; Porter, 1990); the capabilities of large companies, which act as regional hubs (Chandler, 1990; Markusen, 1996; Lazonick, 2010); the adoption of active industrial policies (Amsden, 1989, 2001; Chang, 2002); and the institutional environment (Bagnasco, 1977; Brusco, 1982; Becattini, 1990; Porter, 1998)."
    Keywords: Industrial Districts and Clusters; Automotive Industry; External Economies; Large Companies; Active Industrial Policy; Institutions
    JEL: O14 O25 N66 N96
    Date: 2017–04
  9. By: Michael Fritsch (FSU Jena)
    Abstract: This paper reviews the empirical evidence concerning the regional emergence of innovative new businesses. It is argued that analyses using aggregate data that focus on the regional level and do not account for career patterns of innovative founders are of limited value in guiding policy that is aimed at fostering the emergence of innovative new businesses. Progress can be mainly expected from research that investigates the family backgrounds, education, and employment careers of potential founders. Moreover, it would be helpful to develop clearer empirical definitions of what constitutes an innovative new business, and the distinctions between different types of innovative businesses.
    Keywords: Innovative start-ups, universities, employment career
    JEL: L26 D22 O31 R12 R30
    Date: 2018–09–24
  10. By: Marianna Belloc; Paolo Naticchioni; Claudia Vittori
    Abstract: In this paper, we estimate the urban wage premia (UWP) in Italy, with its economy characterized by the interplay between collective bargaining and spatial heterogeneity in the cost of living. We implement a reduced-form regression analysis using both nominal and real (in temporal and spatial terms) wages. Our dataset for the 2005-2015 period includes, for workers’ characteristics, unique administrative data provided by Italian Social Security Institute and, for the local CPI computation, housing prices collected by Italian Revenue Agency. For employees covered by collective bargaining, we find a zero UWP in nominal terms and a negative and non-negligible UWP in real terms (-5%). To capture the role played by centralized wage settings, we also consider various groups of self-employed workers, who are not covered by national labour agreements, while living in the same locations and enjoying the same amenities as employees. We find that the UWP for self-employed workers are up to 25 times greater than for employees. Moreover, sorting proves more notable in the case of self-employed workers, i.e. the larger UWP provide the higher incentives for high-skilled individuals and better firms to locate in cities. Our findings are confirmed on extending the analysis along the wage distribution.
    Keywords: urban wage premium, cost of living, collective bargaining
    JEL: R12 R31 J31
    Date: 2018
  11. By: Zhou, Haiwen
    Abstract: This paper studies a general equilibrium model of economic geography in which firms engage in oligopolistic competition. This framework is conducive to analytic results. With increasing returns, oligopolistic competition leads to inter-industry trade between regions rather than intra-industry trade. The choice of appropriate technology is a channel of concentration of industries.
    Keywords: Oligopolistic competition, economic geography, increasing returns to scale, choice of technology, inter-industry trade
    JEL: F12 F20 R10
    Date: 2018–09–08
  12. By: Yang, Cynthia Fan
    Abstract: This paper considers panel data models with cross-sectional dependence arising from both spatial autocorrelation and unobserved common factors. It derives conditions for model identification and proposes estimation methods that employ cross-sectional averages as factor proxies, including the 2SLS, Best 2SLS, and GMM estimations. The proposed estimators are robust to unknown heteroskedasticity and serial correlation in the disturbances, unrequired to estimate the number of unknown factors, and computationally tractable. The paper establishes the asymptotic distributions of these estimators and compares their consistency and efficiency properties. Extensive Monte Carlo experiments lend support to the theoretical findings and demonstrate the satisfactory finite sample performance of the proposed estimators. The empirical section of the paper finds strong evidence of spatial dependence of real house price changes across 377 Metropolitan Statistical Areas in the US from 1975Q1 to 2014Q4. The results also reveal that population and income growth have significantly positive direct and spillover effects on house price changes. These findings are robust to different specifications of the spatial weights matrix constructed based on distance, migration flows, and pairwise correlations.
    Keywords: Cross-sectional dependence, Common factors, Spatial panel data models, Generalized method of moments, House prices
    JEL: C13 C23 R21 R31
    Date: 2017–11–01
  13. By: LeSage, James P.; Fischer, Manfred M.
    Abstract: Past focus in the panel gravity literature has been on multidimensional fixed effects specifications in an effort to accommodate heterogeneity. After introducing fixed effects for each origin- destination dyad and time-period speciffic effects, we find evidence of cross-sectional dependence in flows. We propose a simultaneous dependence gravity model that allows for network dependence in flows, along with computationally efficient MCMC estimation methods that produce a Monte Carlo integration estimate of log-marginal likelihood useful for model comparison. Application of the model to a panel of trade flows points to network spillover effects, suggesting the presence of network dependence and biased estimates from conventional trade flow specifications.
    Keywords: origin-destination panel data flows, cross-sectional dependence, log-marginal likelihood, sociocultural distance, convex combinations of interaction matrices
    Date: 2018–10–02
  14. By: Drivas, Kyriakos; Economidou, Claire; Karamanis, Dimitris; Sanders, Mark
    Abstract: This paper studies the drivers of highly skilled migrants across space as well as their impact on local innovation activity. We focus on patent inventors, a specific typology of skilled and innovative individuals who are deeply involved in the production of innovation and are important vehicle of knowledge circulation. Employing patent data to track their moves, we use a gravity model to examine whether geographic, technological and cultural proximities between countries and country level factors and policies shape the flows of these talented individuals. As a comparison, in the same framework, we also analyze the flows of non-inventor migrants. Our evidence shows that proximity matters for migration. Gravity emerges everywhere; in the mobility of inventor and non-inventor migrant workers; the former, however, are less geographically restricted. Similarity in technological production structure between countries is the main driver of inventor moves - especially for inventors from the most innovative countries, whereas cultural proximity matters more for non-inventor migrants. Attractive country features are the quality of institutions and job opportunities at the destination as well as trade linkages between origin and destination country. Finally, the knowledge and skills that move with the inventors have an important positive impact on local innovation production.
    Keywords: inventor mobility, patents, migration, gravity, proximity
    JEL: J61 O31 O33 O52
    Date: 2018–09–07
  15. By: Keith Sugden (University of Cambridge); Sebastian A.J. Keibek; Leigh Shaw-Taylor (University of Cambridge)
    Abstract: This study uses male occupational data abstracted from the Court of Common Pleas to determine the location of the English woollen manufacturing industry circa 1500, and from county probate records to track temporal change 1601-1801. It shows that the onset of de- industrialization in textile counties in southern England occurred toward the end of the seventeenth century when the industry began to shift to the West Riding of Yorkshire. Occupations of fathers recorded in Anglican baptism registers 1813-20 indicate that the industry relocated to a relatively small number of places. This study establishes a clear association between these places and the proximity of water and the coalfields. This relationship concurs with the views of Adam Smith to show that coal was important to the woollen manufacture decades before the mechanization of spinning and weaving and the use of steam power.
    Keywords: Woollen cloth manufacture, location, timing, coal, water
    JEL: N73

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