nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒06‒24
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Spatial Mismatch Between Innovation and Joblessness By Edward L. Glaeser; Naomi Hausman
  2. Commuting, Migration and Local Joblessness By Michael Amior; Alan Manning
  3. Temporary Trade Shocks, Spatial Reallocation, and Persistence in Developing Countries: Evidence from a Natural Experiment in West Africa By Emran, M. Shahe; Shilpi, Forhad; Coulombe, Harold; Blankespoor, Brian
  4. Retail and Place Attractiveness: The Effects of Big-box Entry on Property Values By Daunfeldt, Sven-Olof; Mihaescu, Oana; Öner, Özge; Rudholm, Niklas
  5. Ease Versus Noise: Long-Run Changes in the Value of Transport (Dis)amenities By Gabriel M. Ahlfeldt; Volker Nitsch; Nicolai Wendland
  6. Decoupling values of agricultural externalities according to scale: a spatial hedonic approach in Brittany By Abdel Fawaz Osseni; François Bareille; Pierre Dupraz
  7. The Impact of Land Bank Demolitions on Property Values By Niemesh, Gregory; Jones-Farmer, L. Allison; Hart, Joseph; Holmes, William; Soundappan, Nathan
  8. Layers, levels and coordination challenges: comparing S3 governance in Puglia and Extremadura By Elisabetta Marinelli; Federica Bertamino; Ana Fernandez Zubieta
  9. Multilevel governance for smart specialisation: basic pillars for its construction By Miren Larrea; Miren Estensoro; Martina Pertoldi

  1. By: Edward L. Glaeser; Naomi Hausman
    Abstract: American technological creativity is geographically concentrated in areas that are generally distant from the country’s most persistent pockets of joblessness. Could a more even spatial distribution of innovation reduce American joblessness? Could Federal policies disperse innovation without significant costs? If research funding is already maximizing knowledge production, then spatial reallocation of that funding will reduce America’s overall innovation unless that reallocation comes with greater spending. Without any spatial reallocation, the primarily inventive parts of innovation policy, such as N.I.H. grants, can potentially aid underperforming areas by targeting the problems of those areas, like widespread disability. The educational aspects of innovation policy, such as Pell Grants, work-study, vocational training, and Federal overhead reimbursement on grants, currently have multiple objective and could focus more on employability in distressed areas. Lifting the cap on H1B visas in poorer places could attract outside human capital to those places. Geographically targeted entrepreneurship policies, such as eliminating the barriers to new business formation near universities and in distressed places, could potentially enhance employment growth in those regions. Spatially targeted employment subsidies will increase the returns to labor-intensive innovation in depressed areas, but we know little about how much innovation will respond to such subsidies.
    JEL: O31 R11
    Date: 2019–05
  2. By: Michael Amior; Alan Manning
    Abstract: Britain suffers from persistent spatial disparities in employment rates. This paper develops an integrated framework for analyzing two forces expected to equalize economic opportunity across areas: commuting and migration. Our framework is applicable to any level of spatial aggregation, and we use it to assess their contribution to labor market adjustment across British wards (or neighborhoods). Commuting offers only limited insurance against local shocks, because commutes are typically short and shocks are heavily correlated spatially. Analogously, migration fails to fully equalize opportunity because of strong temporal correlation in local demand shocks.
    Keywords: spatial inequality, commuting, migration
    JEL: J21 J61 J64 R23
    Date: 2019–06
  3. By: Emran, M. Shahe; Shilpi, Forhad; Coulombe, Harold; Blankespoor, Brian
    Abstract: In response to rising inequality following decades of trade liberalization, many countries are adopting trade restrictions. Can temporary trade restrictions have long-lasting effects on spatial distribution of employment and resource allocation? To analyze this, we exploit the civil war in Cote d'Ivoire (2002-2007) that disrupted access to world market for two neighboring land-locked countries: Mali and Burkina Faso. The Ivorian war forced rerouting of trade from the Abidjan route to the non-Abidjan routes. We build a general equilibrium model where a subsistence-based autarkic hinterland coexists with an integrated segment, and there are two alternative routes to the international market. A trade shock to one route affects resource allocation in both routes by shifting spatial margins of market integration and sectoral specialization. The effects are heterogeneous depending on the pre-war market access of a location. The empirical analysis takes advantage of panel data and estimates the effects on structural change in employment in non-Abidjan route using a triple difference design with location fixed effect. The areas that remain in autarkic equilibrium both before and after the trade shock provide plausible estimates of the changes arising from long-term factors unrelated to the trade shock. The estimates show that the temporary trade shock created divergence between the Abidjan and non-Abidjan routes with accelerated structural change in favor of manufacturing and services employment in the non-Abidjan route. We find evidence of persistence in the effects through higher sunk investment in built-up density, agglomeration through concentration of skilled labor, and more public investment in complementary inputs such as electricity infrastructure (measured by night-lights density).
    Keywords: Temporary Trade Restrictions, Regional Development, Structural Change in Employment, Persistence, Path-Dependence, Built-up Density, Skill Agglomeration, Provision of Electricity, Night-Lights
    JEL: F15 F16 O24 O55
    Date: 2019–06–15
  4. By: Daunfeldt, Sven-Olof (Institute of Retail Economics (HFI)); Mihaescu, Oana (Dalarna University); Öner, Özge (University of Cambridge); Rudholm, Niklas (Centre for Entrepreneurship and Spatial Economics)
    Abstract: Opponents of big-box entry argue that large retail establishments generate noise and other types of pollution and a variety of negative externalities associated with traffic. Big-box advocates, on the other hand, argue that access to a large retail market delivers not only direct economic benefits but also a variety of positive spillover effects and therefore can be considered a consumer amenity that increases the attractiveness of the entry location. To test the validity of these competing arguments, we use the entry of IKEA in Sweden as a quasi-experiment and empirically investigate whether increased access to retail affects place attractiveness, which is proxied by residential property values. We find that IKEA entry increases the prices of the properties sold in the entry cities by, on average, 4.4% or 60,425 SEK (approximately 6,400 USD), but this effect is statistically insignificant for the properties in the immediate vicinity of the new IKEA retail trade area. In addition, we observe an attenuation of the effect with distance from the new IKEA store and the associated retail trade area, where the properties located 10 km away experience a 2% price increase. Our results are in line with some previous findings regarding the effects of entry by Walmart or supermarket stores in the US and show that large retailers have the potential to increase place attractiveness, but perhaps not in the immediate vicinity of the new establishment.
    Keywords: Retail trade; Large retailers; Property values; Place attractiveness; Difference-in-differences estimation
    JEL: D22 P25 R12 R32
    Date: 2019–06–14
  5. By: Gabriel M. Ahlfeldt; Volker Nitsch; Nicolai Wendland
    Abstract: For a complete cost-benefit analysis of durable infrastructures, it is important to understand how the value of non-market goods such as transit time and environmental quality changes as incomes rise in the long-run. We use difference-in-differences and spatial differencing to estimate the land price capitalization effects of metro rail in Berlin, Germany today and a century ago. Over this period, the negative effect of rail noise tripled in percentage terms. Our results imply long-run income elasticities of the value of noise reduction and transport access of 2.2 and 1.4, substantially exceeding cross-sectional contingent valuation estimates.
    Keywords: accessibility, spatial differencing, noise, difference-in-differences, income elasticity, land price
    JEL: R12 R14 R41 N73 N74
    Date: 2019–06
  6. By: Abdel Fawaz Osseni (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST); François Bareille (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST, DISTAL - Università di Bologna); Pierre Dupraz (SMART - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)
    Abstract: Agricultural activities jointly generate various externalities. Hedonic pricing method allows for their valuation. Previous hedonic studies have estimated the value of the externalities generated by a given agricultural activity in a single parameter. Based on simple theoretical model, we illustrate that this parameter captures the sum of the different externalities generated by the activity. We explain that this parameter can differ at different spatial scale. Using specific spatial econometric models with spatial lags on the explanatory variables, we distinguish between the value of infra-municipal agricultural externalities and the value of extra-municipal agricultural externalities with larger spatial range arising from the same agricultural source. Among the estimated models, the spatial lag of the exogenous variable and the general nested spatial models are selected as the best models. We find that swine activities present negative effects at all scales whereas dairy cattle activities, including grassland management, present negative effects at the infra-municipality scale but positive spillovers.
    Abstract: Les activités agricoles produisent diverses externalités dont la valeur peut être théoriquement estimée à l'aide de la méthode des prix hédoniques. Les études hédoniques antérieures ont toutefois estimé la valeur des externalités générées par une activité agricole à travers un paramètre unique. Sur la base d'un modèle théorique simple, nous montrons que ce paramètre capture la somme des différentes externalités générées par l'activité. Nous expliquons que ce paramètre peut différer à différentes échelles géographiques. En utilisant des modèles économétriques spatiaux spécifiant un effet spatial spécifique pour chaque variable explicative, nous distinguons la valeur moyenne des externalités agricoles capturée à l'échelle infra-communales (où les résidents et les activités agricoles sont localisés dans la même municipalité) et celle capturée à l'échelle extra-municipale (où les résidents et les activités agricoles sont localisés dans des municipalités différentes). Parmi les modèles estimés, les modèles SLX et GNS apparaissent statistiquement comme les meilleurs modèles. Nous montrons que les activités d'élevages porcins et avicoles affectent négativement les résidents à toutes les échelles, tandis que les activités d'élevages bovins, incluant la gestion des prairies, présentent des effets négatifs à l'échelle infra-municipale, mais des effets positifs à l'échelle extra-municipale.
    Keywords: externalitie,nitrogen,spatial econometric,externality,externalité,agriculture,économétrie spatiale,azote
    Date: 2019
  7. By: Niemesh, Gregory; Jones-Farmer, L. Allison; Hart, Joseph; Holmes, William; Soundappan, Nathan
    Abstract: A modern land bank is a public entity that purchases and demolishes blighted housing to remove negative externalities. We estimate the impact of land bank demolitions on surrounding property values for a medium-sized municipality. Using a spatial correction hedonic model of house prices, we find modest increases in sales prices associated with land bank activity in a neighborhood. In general, the impact estimates we find are smaller than those found in the literature for a much larger metropolitan area. We speculate on the cause of this difference in findings.
    Keywords: Land bank, spatial econometrics, property values
    JEL: R3 R38
    Date: 2019–05–29
  8. By: Elisabetta Marinelli (European Commission - JRC); Federica Bertamino; Ana Fernandez Zubieta
    Abstract: Research and Innovation Strategies for Smart Specialisation (RI3s) were launched within the EU Cohesion policy for the 2014-2020 period. Smart Specialisation is an experimental policy approach requiring the identification of strategic areas of intervention through both analytical methods and stakeholders participation. Such an approach implies a move from a ‘generic’ to a ‘place-based’ regional development policy (McCann & Ortega-Argilés, 2015). Since the introduction of RIS3, governance has been considered an important pillar of the strategy. However, the scientific discussion on governance has largely stemmed from a theoretical perspective, without taking into account the underpinning administrative framework and constraints. This paper fills this gap by comparing the governance structures of two regions from the south of Europe: Extremadura, Spain and Puglia, Italy. Both are classified as less-developed regions, both belong to member states that devolve significant administrative competences to regions and both have suffered significantly from the financial crisis of the last decade. The paper discusses the challenges in the multi-level and multi-layer governance structure, building on the literature on innovation systems and economic geography. The paper argues that unless the debate on RIS3 governance (and on Smart Specialisation in general) is grounded in the reality of public administration rules and practices, it impossible to advance in our understanding.
    Keywords: Smart Specialisation, Governance, Multi-level governance, Multi-layer governance, Coordination challenges
    Date: 2019–05
  9. By: Miren Larrea; Miren Estensoro; Martina Pertoldi (European Commission - JRC)
    Abstract: The aim of this Report is to help policy makers working in different government levels involved in Smart Specialisation (S3) processes to understand how multilevel governance operates in their context and also how they can develop and facilitate its construction in their S3 strategies. The motivation behind this study is the belief that multilevel governance (MLG) can be improved and that S3 can be made more efficient with a win-win approach for different governments involved in the process. In order to begin this reflection, we first define the concept of multilevel governance, connect it to other relevant concepts regarding S3 and explain the place-based and experimental nature of multilevel governance, highlighting its complexity as one of its main characteristics. After describing the government levels that are actually in charge of S3 strategies under the umbrella of the European Commission, the brief focuses on its main contribution: the definition of four pillars for the construction of multilevel governance of place-based S3 strategies. We defined these pillars to help understand how multilevel governance can be built. For each of the pillars, one example linked to the Basque cases is described, together with another example from a different context, i.e. the Six City strategy in Finland, the regions of Flanders in Belgium, Extremadura in Spain, and Baden-Württemberg in Germany.
    Keywords: Multilevel governance, Smart Specialisation, territorial development, innovation policy, local strategies
    Date: 2019–05

This nep-geo issue is ©2019 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.