nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒04‒22
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Firm Performance and Agglomeration Effects: Evidence from Tunisian Firm-level Data By Mohamed Amara
  2. Estimation of Industry-level Productivity with Cross-sectional Dependence by Using Spatial Analysis By Han, Jaepil; Sickles, Robin C.
  3. Accessibility, local pollution and housing prices. Evidence from Nantes Métropole, France By Dorothée Brécard; Rémy Le Boennec; Frédéric Salladarré
  4. Spatial Drivers of Firm Entry in Iran By Iman Cheratian; Saleh Goltabar; Carla Daniela Calá
  5. The Effects of Foreign Direct Investment on Regional Innovation Capacity in China By Paul J.J. Welfens; Tian Xiong
  6. Go east: On the impact of the Transiberian Railway on economic development in Eastern Russia By Seiffert, Sebastian
  7. Decomposing a decomposition: Within-country differences and the role of structural change in productivity growth By Escobar, Octavio; Mühlen, Henning
  8. Regional Output Growth in the United Kingdom: More Timely and Higher Frequency Estimates, 1970-2017 By Koop, Gary; McIntyre, Stuart; Mitchell, James; Poon, Aubrey
  9. Estimating Peer Effects on Career Choice: A Spatial Multinomial Logit Approach By Li, Bolun; Sickles, Robin C.; Williams, Jenny
  10. The Long-Run Effects of Neighborhood Change on Incumbent Families By Baum-Snow, Nathaniel; Hartley, Daniel; Kwan Ok , Lee
  11. The trade-off between absorptive capacity and appropriability of the returns to innovation effort By Crowley, Frank; Jordan, Declan
  12. Productivity Growth, Industry Location Patterns and Labor Market Frictions By Colin Davis; Ken-ichi Hashimoto

  1. By: Mohamed Amara (University of Tunis)
    Abstract: Using Tunisian manufacturing data between 1998 and 2004 and by referring to multilevel approach, this paper investigates the impact of agglomeration and individual characteristics on firm’s performance. The empirical results show the importance of considering both regional and firm characteristics when examining firm performance. They also support the validity of self selection and learning-by-exporting hypotheses. Urbanization and localization effects are significant and positive for firm’s export behavior, but only localization economies have a positive effect of firm productivity. However, the results of the quantile approach show that selection, rather than agglomeration economies in larger cities, better explain spatial productivity differences
    Date: 2019
  2. By: Han, Jaepil (Korea Development Institute); Sickles, Robin C. (Rice U)
    Abstract: We examine aggregate productivity in the presence of inter-sectoral linkages. Cross-sectional dependence is inevitable among industries, in which each sector serves as a supplier to the other sectors. However, the chains of such interconnections cause indirect relationship among industries. Spatial analysis is one of the approaches to address cross-sectional dependence by using a priori a specified spatial weights matrix. We exploit the linkage patterns from the input-output tables and use them to assign spatial weights to describe the economic interdependencies. By using the spatial weights matrix, we can estimate the industry-level production functions and productivity of the U.S. from 1947 to 2010. Cross-sectional dependencies are the consequences of indirect effects, and they reflect the interactions among industries linked via their supply chain networks result in larger output elasticities as well as scale effects for the networked production processes. However, productivity growth estimates are reportedly comparable across various spatial and non-spatial model specications.
    JEL: C21 C23 C51 O47 R15
    Date: 2019–01
  3. By: Dorothée Brécard (LEAD - Laboratoire d'Économie Appliquée au Développement - UTLN - Université de Toulon); Rémy Le Boennec (Institut VEDECOM, LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec); Frédéric Salladarré (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes - 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)
    Abstract: In this empirical article, we analyze the extent to which accessibility and environmental variables are capitalized in apartment prices in Nantes Métropole, France. Using a sample of 5,590 transactions in 2002, 2006, 2008 from the Perval database, we estimate a spatial hedonic price model that takes into account spatial autocorrelation and spatial heterogeneity. Special attention is also paid to the construction of environmental quality variables (noise exposure , air pollution). We find that apartment prices depend positively on proximity to Nantes city centre but that the public transport network (urban or non-urban) has no significant influence. Noise reduction is valued, but only at low or marginal levels of significance. Last, air quality does not significantly influence apartment prices. These results can be related to good accessibility and environmental quality in Nantes Métropole which probably makes households less sensitive to these issues than in other geographical contexts. This seems to provide little support for sustainable urban mobility plans favoring better accessibility, unless public authorities also target the greater awareness of the use of virtuous modes of transport.
    Keywords: spatial econometrics,hedonic price model,accessibility,air quality,noise exposure
    Date: 2018
  4. By: Iman Cheratian (Tarbiat Modares University); Saleh Goltabar; Carla Daniela Calá
    Abstract: Given the importance of entry promotion to prompt economic growth and promote structural transformation, this paper investigates the regional determinants of firm entry in the 30 Iranian regions, considering four different sizes -micro, small, medium and large-over 2000-2015. Using a new and unique database, we estimate panel non-spatial and spatial lag and error dependence models. We find that regional factors explain firm entry, but the impact is not homogeneous across firms of different size. We also find that most types of firms are influenced by the negative effect of economic sanctions during the sample period.
    Date: 2019
  5. By: Paul J.J. Welfens (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW)); Tian Xiong (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: Foreign direct investment (FDI) has been widely considered as an essential channel contributing to a host countries’ innovation development through knowledge and skill spillover effects. In recent years, China has become the second biggest FDI recipient in the world and continues to promote its domestic innovation ability. Here, the question of how FDI affect the growth of regional innovation in China is posed. By applying an alternative knowledge production function (KPF), we investigate the effects of FDI on the development of self-innovation capacities in 31 Chinese provinces using a fixed-effects specification panel data analysis covering the period from 2000 to 2015. Our findings on the contribution of FDI to the growth of different kinds of patent applications in different regions are mixed. Significant results were mainly found for invention patents in the eastern region. Concluding, we suggest potential policy implementations.
    Keywords: Regional Innovation Capacity, Patent, Foreign Direct Investment, China
    JEL: O33 O34 F21 R11
    Date: 2018–06
  6. By: Seiffert, Sebastian
    Abstract: This paper addresses the question whether or not large-scale infrastructure investments have a causal effect of local economic development. By using a novel instrumental variable approach based on historical trade and travel routes across the Russian East, I am able to identify a causal and negative effect of remoteness to the Transsiberian Railway on local economic activity as measured by nocturnal lights emission.
    Keywords: Transport Costs,Railway,Russia,Nightlights,Regional Economics,Development
    JEL: O11 O18 R11 R40
    Date: 2019
  7. By: Escobar, Octavio; Mühlen, Henning
    Abstract: In this article, we investigate the relevance of structural change in country-wide productivity growth considering within-country differences. For this purpose, we propose a two-step decomposition approach that accounts for differences among subnational units. To highlight the relevance of our procedure compared to the prevalent approach in the existing development literature (which usually neglects subnational differences), we show an application with data for the Mexican economy. Specifically, we contrast findings obtained from country-sector data on the one hand with those obtained from (more disaggregated) state-sector data on the other hand. One main insight is that the qualitative and quantitative results differ substantially between the two approaches. Our procedure reveals that structural change appeared to be growth-reducing during the period from 2005 to 2016. We show that this negative effect is driven mainly by the reallocation of (low-skilled) labor within subnational units.
    Keywords: decomposition approach,economic development,labor reallocation,regional differences,structural change
    JEL: L16 O10 O18 R11
    Date: 2019
  8. By: Koop, Gary (University of Strathclyde); McIntyre, Stuart (University of Strathclyde); Mitchell, James (University of Warwick); Poon, Aubrey (University of Strathclyde)
    Abstract: Output growth estimates for the regions of the UK are currently published at the annual frequency only, released with a long delay and offer limited historical coverage. To improve the regional database this paper develops a mixed-frequency multivariate model and uses it to produce consistent estimates of quarterly regional output growth dating back to 1970. We describe how these estimates are updated and evaluated on an ongoing, quarterly basis to publish online (at more timely regional growth estimates. We illustrate how the new quarterly data can contribute to our historical understanding of business cycle dynamics and connectedness between regions.
    Keywords: Regional data; Mixed frequency; Temporal disaggregation; Nowcasting; Bayesian methods; Real-time data; Vector autoregressions; JEL Classification Numbers: C32 ; C51 ; C53; E37 ;
    Date: 2019
  9. By: Li, Bolun (Rice U); Sickles, Robin C. (Rice U); Williams, Jenny (U of Melbourne)
    Abstract: Peers and friends are among the most influential social forces affecting adolescent behavior. In this paper we investigate peer effects on post-high school career decisions and on school choice. We define peers as students who are in the same classes and social clubs and measure peer effects as spatial dependence among them. Utilizing recent development in spatial econometrics, we formalize a spatial multinomial choice model in which individuals are spatially dependent in their preferences. We estimate the model with data from the Texas Higher Education Opportunity Project. We do find that individuals are positively correlated in their career and college preferences and examine how such dependencies impact decisions directly and indirectly as peer effects are allowed to reverberate through the social network in which students reside.
    JEL: C31 C35
    Date: 2019–01
  10. By: Baum-Snow, Nathaniel (University of Toronto); Hartley, Daniel (Federal Reserve Bank of Chicago); Kwan Ok , Lee (National University of Singapore)
    Abstract: A number of prominent studies examine the long-run effects of neighborhood attributes on children by leveraging variation in neighborhood exposure through household moves. However, much neighborhood change comes in place rather than through moving. Using an urban economic geography model as a basis, this paper estimates the causal effects of changes in neighborhood attributes on long-run outcomes for incumbent children and households. For identification, we make use of quasi-random variation in 1990-2000 and 2000-2005 skill specific labor demand shocks hitting each residential metro area census tract in the U.S. Our results indicate that children in suburban neighborhoods with a one standard deviation greater increase in the share of resident adults with a college degree experienced a 0.4 to 0.7 standard deviation improvement in credit outcomes 12-17 years later. Since parental outcomes are not affected, we interpret these results as operating through neighborhood effects. Finally, we provide evidence that most of the estimated effects operate through public schools.
    Keywords: Employment; Neighborhoods; Human capital; Households; Population
    JEL: D1 E24 R3
    Date: 2019–03–18
  11. By: Crowley, Frank; Jordan, Declan
    Abstract: A key concept in the economics of innovation is the 'public good' nature of knowledge. This generates a tension between incentivizing knowledge production by allowing knowledge creators appropriate the economic benefits and encouraging its diffusion to enhance the social return to knowledge creation. Where firms operate in localities that are characterized by greater entrepreneurship, there may be lower incentives to engage in research and development. This would result from a higher risk of knowledge spillovers to local start-ups and/or that employees may exploit new knowledge in spin-out firms. It has also been suggested in the literature that greater local entrepreneurial activity may lower profits for incumbent firms, through greater competition and/or the leakage of commercially valuable new knowledge. This paper presents a novel conceptual perspective on this tension and empirically tests it. Using Swedish firmlevel data and county-level data on new start-ups, this paper estimates the effect on R&D activity of local rates of business start-ups. It finds that greater numbers of new start-ups in a metropolitan area reduces firm-level R&D expenditure. However, this relationship is not linear, so that at higher levels of new firm formation in a region, firm-level R&D expenditure falls at a diminishing rate. This suggests that the effect of local entrepreneurship on a business' R&D decisions is conditioned by the extent of that entrepreneurship.
    Keywords: Innovation,entrepreneurship,absorptive capacity,knowledge spillovers
    JEL: R11 O33 O31
    Date: 2018
  12. By: Colin Davis; Ken-ichi Hashimoto
    Abstract: This paper constructs a two-country model of international trade to study how labor market frictions affect industry location patterns, unemployment rates, and fully endogenous productivity growth. We show that when the larger country offers subsidies to labor search costs or reduces unemployment benefits, the domestic unemployment rate falls, causing greater industry concentration and faster productivity growth, but higher unemployment for the smaller country. When similar labor market policies are implemented in the smaller country, however, the resulting fall in domestic unemployment leads to lower industry concentration and slower productivity growth, while lowering unemployment in the larger country.
    Date: 2019–04

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