nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒03‒04
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional Variations in Exporters'Productivity Premium: Theory and Evidence By Toshihiro Okubo; Eiichi Tomiura
  2. Place-Based Preferential Preferential Tax Policy and Its Spatial Effects: Evidence from India’s Program on Industrially Backward Districts By Hasan, Rana; Jiang, Yi; Rafols , Radine Michelle
  3. The Origins of Creativity: The Case of the Arts in the United States since 1850 By Borowiecki, Karol Jan
  4. Emergence of Urban Landscapes: Equilibrium Selection in a Model of Internal Structure of the Cities By Osawa, Minoru; Akamatsu, Takashi
  5. Natural resources, economic growth and geography By González-Val, Rafael; Pueyo, Fernando
  6. How Term Limits Constrain the Emergence of Agency and Resilience By David, Lucinda
  7. Specification Tests for Temporal Heterogeneity in Spatial Panel Models with Fixed Effects By Xu, Yuhong; Yang, Zhenlin

  1. By: Toshihiro Okubo (Faculty of Economics, Keio University); Eiichi Tomiura (Graduate School of Economics, Hitotsubashi University)
    Abstract: The international trade literature confirms that the average productivity of exporters is higher than that of non-exporters, while economic geography studies establish that urban firms tend to be more productive than rural ones. By introducing region-specific transportation costs in a Melitz-type heterogeneous firm trade model, the theory predicts that the minimum threshold productivity level for export is higher but that for survival by serving the local market is lower in the periphery region than in the core. Using Japanese plant-level panel data, we find evidence supporting the theoretical prediction that exporters in the peripheral regions, especially those distant from the core, have large productivity premiums.
    Keywords: Productivity, transportation costs
    JEL: F1 R12 L25
    Date: 2019–01–07
  2. By: Hasan, Rana (Asian Development Bank); Jiang, Yi (Asian Development Bank); Rafols , Radine Michelle (Asian Development Bank)
    Abstract: The Government of India initiated a program in 1994 to promote manufacturing in districts designated as backward. The way the backward districts were identified enables us to employ a regression discontinuity design to evaluate the impacts of the program. We find that the program’s 5-year tax exemption to manufacturers led to a significant increase in firm entry and employment in relatively better-off backward districts, particularly in light manufacturing industries. However, the program also resulted in negative spillover effects in districts which were neighboring these backward districts and relatively weaker in economic activity. The findings emphasize that the spatial effects of place-based policies deserve greater attention from policy makers.
    Keywords: backward districts; place-based policy; preferential tax; sharp regression discontinuity; spatial spillovers
    JEL: H32 O14 R12
    Date: 2017–11–16
  3. By: Borowiecki, Karol Jan (Department of Business and Economics)
    Abstract: This research illuminates the historical development of creative activity in the United States. Census data is used to identify creative occupations (i.e., artists, musicians, authors, actors) and data on prominent creatives, as listed in a comprehensive biographical compendium. The analysis first sheds light on the socio-economic background of creative people and how it has changed since 1850. The results indicate that the proportion of female creatives is relatively high, time constraints can be a hindrance for taking up a creative occupation, racial inequality is present and tends to change only slowly, and education plays a significant role for taking up a creative occupation. Second, the study systematically documents and quantifies the geography of creative clusters in the United States and explains how these have evolved over time and across creative domains. Third, it investigates the importance of outstanding talent in a discipline for the local growth of an artistic cluster.
    Keywords: Creativity; artists; geographic clustering; agglomeration economies; urban history
    JEL: N33 R10 Z11
    Date: 2019–02–18
  4. By: Osawa, Minoru; Akamatsu, Takashi
    Abstract: This paper addresses a longstanding stability issue of equilibria in a seminal model in spatial economic theory, making use of the potential game approach. The model explains the formation of multiple business centers in cities as an equilibrium outcome under the presence of commuting costs of households and positive production externalities between firms. We fist show that the model can be viewed as a large population (nonatomic) potential game. To elucidate properties of stable spatial equilibria in the model, we select global maximizers of the potential function, which are known to be globally stable under various learning dynamics. We find that the formation of business centers (agglomeration of firms) is possible only when the commuting costs of households are sufficiently low and that the size (number) of business centers increases (decreases) monotonically as communication between firms becomes easier. Our results indicate a new range of applications, i.e., spatial economic models, for the theory of potential games.
    Keywords: Agglomeration; multiple equilibria; equilibrium selection; potential game; global stability.
    JEL: C62 C72 C73 R14
    Date: 2019–02–26
  5. By: González-Val, Rafael; Pueyo, Fernando
    Abstract: Worldwide materials extraction increased by a factor of 8.4 over the course of the 20th century. In the meantime, global GDP and population increased by factors of about 22 and 4, respectively. This reveals that one of the key factors driving the increase in the exploitation of the resources was the growth in world population, although mitigated by the reduction in the intensity in the use of the resources in production. In this paper, we present a model that combines the theory of endogenous growth and the economy of natural resources, but taking into account the geographical distribution of economic activity. Indeed, the New Economic Geography provides insights about two elements that, although speeding up GDP growth, can curb the pressure on natural resources, namely the reduction in transports costs and a boost to pace of innovation.
    Keywords: industrial location, endogenous growth, renewable resource, geography
    JEL: F43 O30 Q20 R12
    Date: 2019–02
  6. By: David, Lucinda (CIRCLE, Lund University)
    Abstract: This paper investigates how timing norms affect the emergence of agency in regional resilience. It forwards three arguments: timing norms establish the boundary for action and generates corollary timing norms that schedule adaptive strategies, term limits shape incentives for institutional work, and the interplay of term limits, institutional work, and agency, shape the path of regions for adaptation or adaptability. Findings show that incentives for policy action arises at the beginning of terms, term limits generate incentives for types of institutional work. Layering is not effective in maintaining resource allocation to agendas, affecting regional tendencies for adaptation and adaptability.
    Keywords: agency; regional resilience; institutions; institutional work
    JEL: D02 R58
    Date: 2019–02–19
  7. By: Xu, Yuhong (School of Economics, Singapore Management University); Yang, Zhenlin (School of Economics, Singapore Management University)
    Abstract: We propose score type tests for testing the existence of temporal heterogeneity in slope and spatial parameters in spatial panel data (SPD) models, allowing for the presence of individual-specific and/or time-specific fixed effects (or in general intercept heterogeneity). The SPD model with spatial lag effect is treated in detail by first considering the model with individual-specific effects only, and then extending it to the model with both individual and time specific effects. Two types of tests (naive and robust) are proposed, and their asymptotic properties are presented. These tests are then fully extended to an SPD model with both spatial lag and spatial error effects. Monte Carlo results show that the robust tests have much superior finite and large sample properties than the naive tests. Thus, the proposed robust tests provide reliable tools for identifying possible existence of temporal heterogeneity in regression and spatial coefficients. Empirical illustrations of the proposed tests are given.
    Keywords: Spatial panels; Fixed effects; Time-Varying Covariate Effects; Time-Varying Spatial Effects; Change Points
    JEL: C10 C13 C15 C21 C23
    Date: 2019–01–28

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