nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒07‒29
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Simulating the impact of transport infrastructure investment on wages: a dynamic spatial panel model approach By Fingleton, Bernard; Szumilo, Nikodem
  2. Relatedness, economic complexity and convergence across European regions By Tullio Buccellato; Giancarlo Corò
  3. Global bifurcation mechanism and local stability of identical and equidistant regions By José Gaspar; Kiyohiro Ikeda; Mikihasa Onda
  4. A retrospective study on the regional benefits and spillover effects of high-speed broadband networks: Evidence from German counties By Briglauer, Wolfgang; Dürr, Niklas S.; Gugler, Klaus
  5. Why bother about region-specific growth patterns and how to identify them? By Grillitsch, Markus; Martynovich, Mikhail; Dahl Fitjar, Rune; Haus-Reve, Silje
  6. Regional inequalities in premature mortality in Great Britain By Plümper, Thomas; Laroze, Denise; Neumayer, Eric
  7. Does the Position in the Inter-sectoral Knowledge Space affect the International Competitiveness of Industries? By Francesco Lamperti; Franco Malerba; Roberto Mavilia; Giorgio Tripodi
  8. Trinity of Change Agency: Connecting Agency and Structure in Studies of Regional Development By Grillitsch, Markus; Rekers, Josephine; Sotarauta, Markku
  9. Sales Taxation, Spatial Agglomeration, and the Internet By David R. Agrawal; David E. Wildasin
  10. Peru's Regional Growth and Convergence in 1979-2017: An Empirical Spatial Panel Data Analysis By Gabriel Rodríguez; Juan Palomino
  11. The Effects of Gentrification on the Well-Being and Opportunity of Original Resident Adults and Children By Brummet, Quentin; Reed, Davin
  12. What explains India’s poor performance in garments exports: evidence from five clusters? By Ray, Saon
  13. SSP Long Run Scenarios for European NUTS2 Regions By Wolfgang Britz; Roberto Roson; Martina Sartori

  1. By: Fingleton, Bernard; Szumilo, Nikodem
    Abstract: This paper estimates the impact of a multi-billion pound investment in Britain's rail transport infrastructure, in the form of high-speed rail links, on wage levels across each of 347 districts of England and Wales. The impacts are based on a dynamic spatial panel model adaptation of standard urban economics based on employment density and commuting patterns. This allows estimation of these global impacts operating via improved commuting times. We demonstrate that while estimates of a traditional market potential approach with fixed effects are to some extent qualitatively and quantitatively similar to our predictions, our predictions allow more heterogeneous effects and give more accurate forecasts. The study finds that on average wages increase by around 2% as employment centres gain improved access to more skilled workers and as spillover effects become spatially more extensive. While most areas see modest positive effects, some locations are negatively affected, in the extreme case by as much as 7%.
    Keywords: dynamic spatial panel model; simulation; prediction; transport infrastructure; commuting; wages; regional development
    JEL: C33 C53 J31 R40 R11 R12
    Date: 2019–03–01
  2. By: Tullio Buccellato (Economic Research Department, Confindustria.); Giancarlo Corò (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The aim of this paper is to analyze how the heterogeneous structure of the European regions has affected their patterns of convergence or divergence. We analyse data collected by Eurostat, from a balanced panel of 191 regions and 55 economic branches over the period 2003-2015. In this way, we are able to describe and capture technological proximity across the regions and analyse how it has evolved over space and time. Limiting the analysis to the manufacturing activities, we are also able to measure the degree of economic complexity of the regional production systems and assess how this affects their patterns of growth. Our findings suggest that there are pushing (enhancing convergence) and pulling (exacerbating economic gaps) forces to economic convergence. Spatial effects tend to push towards convergence, with the Eastern regions that started from relatively low levels of GDP per capita and experienced higher growth rates. Nevertheless, the different level of economic complexity tends to widen the gaps between territories: for example, the German regions, whose economic structures are more complex, have kept on widening the gap between themselves and the other European regions. The two different forces are also interconnected as the Eastern regions combine a relatively low level of GDP per capita with a significant level of economic complexity. During the period considered, the improvement in living standards has corresponded to the upgrade of their manufacturing production structures.
    Keywords: Regional disparities, growth, convergence, structural change, relatedness, economic complexity, spatial effects
    JEL: O10 O25 P25 R10 L16
    Date: 2019
  3. By: José Gaspar (Universidade Católica Portuguesa, Católica Porto Business School and CEGE); Kiyohiro Ikeda (Department of Civil and Environmental Engineering, Tohoku University); Mikihasa Onda (Department of Civil and Environmental Engineering, Tohoku University)
    Abstract: We provide an analytical description of possible spatial patterns in economic geography models with three identical and equidistant regions by applying results from General Bifurcation mechanisms. We then use Pflüger’s (2004, Reg Sci UrbEcon) model to show what spatial patterns can be uncovered analytically. As the freeness of trade increases, a uniform distribution undergoes a direct bifurcation that leads to a state with two identical large regions and one small region. Before this bifurcation, the model encounters a minimum point above which a curve of dual equilibria with two small identical regions and one small region emerges. From further bifurcations, the equilibrium with one large region encounters agglomeration in a single region, while the equilibrium with one small region encounters a state with two evenly populated regions and one empty region. A secondary bifurcation then leads to partial agglomeration with one small region and one large region. We show that an asymmetric equilibrium h populated regions cannot be connected with other types of equilibria. Therefore, an initially asymmetric state will remain so and preserve the ordering between region sizes.
    Keywords: bifurcation, economic geography, multi-regional economy, footloose entrepreneur
    JEL: R10 R12 R23
    Date: 2019–07
  4. By: Briglauer, Wolfgang; Dürr, Niklas S.; Gugler, Klaus
    Abstract: There is still hardly any empirical evidence on how divergent broadband technologies, and, by extension, bandwidth levels, influence GDP growth, or on the extent of spatial externalities at a regional level. Our study aims to assess the economic benefits of high-speed broadband networks within and across neighbouring counties in Germany. Utilizing a balanced panel dataset of 401 German counties with data from 2010-2015 as well as different panel estimation techniques, we find that the availability of high-speed broadband (which enables transfer rates of 50 Mbit/sec and higher) has a small but significant positive effect on regional GDP growth in the average German county, when compared to normal broadband availability. Furthermore, we find that broadband deployment in German counties induces substantial economic benefits in terms of direct effects and regional externalities. According to our main estimation results, an increase in bandwidth coverage of 50 Mbit/sec and higher by one percentage point induces arise in regional GDP of 0.05%. This effect is almost doubled if we also take regional externalities into account and is of particular relevance for urban counties. Furthermore, our cost-benefit analysis suggests substantial efficiency gains, as the total economic benefits of subsidy programs to encourage broadband expansion substantially exceeded their associated costs.
    Keywords: high-speed broadband infrastructure,economic growth,spatial externalities,German counties,panel data
    JEL: H23 H54 L96 L98 R11 R58
    Date: 2019
  5. By: Grillitsch, Markus (Lund University); Martynovich, Mikhail (Lund University); Dahl Fitjar, Rune (University of Stavanger); Haus-Reve, Silje (University of Stavanger)
    Abstract: Understanding the causes of regional growth has been of key concern for policy makers and scholars in economic geography and regional science. Regional growth models estimate the effect of various regional factors on the growth of an average region. However, these models leave a large share of regional growth unexplained. This is to be expected, as the embeddedness of regions at various spatial scales from the local to the global invariably leads to growth that is highly region-specific. However, existing quantitative approaches to regional growth are not able to cope with this, treating outliers in growth models as stochastic noise rather than as cases of empirical interest. The paper proposes a method to carve out the region-specific growth component in regional growth models and illustrates this empirically using data for Sweden from 1990-2016. We find robust patterns of periodic region-specific growth outweighing the effect of generic structural factors. This has important implications for how we should think about and empirically address regional growth.
    Keywords: Regional growth; regional development; evolutionary economic geography; path-dependency; embeddedness; outliers
    JEL: O18 R10
    Date: 2019–07–18
  6. By: Plümper, Thomas; Laroze, Denise; Neumayer, Eric
    Abstract: Premature mortality exhibits strong spatial patterns in Great Britain. Local authorities that are located further North and West, that are more distant from its political centre London and that are more urban tend to have a higher premature mortality rate. Premature mortality also tends to cluster among geographically contiguous and proximate local authorities. We develop a novel analytical research design that relies on spatial pattern recognition to demonstrate that an empirical model that contains only socio-economic variables can eliminate these spatial patterns almost entirely. We demonstrate that socioeconomic factors across local authority districts explain 81 percent of variation in female and 86 percent of variation in male premature mortality in 2012–14. As our findings suggest, policy-makers cannot hope that health policies alone suffice to significantly reduce inequalities in health. Rather, it requires strong efforts to reduce the inequalities in socio-economic factors, or living conditions for short, in order to overcome the spatial disparities in health, of which premature mortality is a clear indication.
    Keywords: regional inequality; spatial pattern recognition; premature mortality; health inequality
    JEL: N0
    Date: 2018–02–28
  7. By: Francesco Lamperti; Franco Malerba; Roberto Mavilia; Giorgio Tripodi
    Abstract: This paper empirically investigates how the inter-sectoral knowledge flows affect the international competitiveness of industries, once controlling for both cost and other technological factors. Using patent data on 14 manufacturing industries in 16 OECD countries over the period 1995-2009, we apply a network-based approach to capture the effect of industries' position in the flows of technological knowledge across industries, which we label inter-sectoral knowledge space. We find that (i) centrality and local clustering in the inter-sectoral knowledge space positively affect the export market shares of an industry, (ii) such two effects are rather redundant and, (iii) national-level knowledge flows' impacts on international competitiveness are way stronger than international ones. Network measures of position in the knowledge space are found to be more relevant than standard technological indicators such as patent counts. Our results point to the importance of industries being well located in the stream of knowledge flows, rather than being innovative per-se, and offers an novel yet robust proxy to measure technological factors affecting trade performances. In addition, we find evidence of geographical boundaries of knowledge flows.
    Keywords: international trade; industry competitiveness; knowledge flows; patent data.
    Date: 2019–07–24
  8. By: Grillitsch, Markus (Lund University); Rekers, Josephine (Lund University); Sotarauta, Markku (Tampere University)
    Abstract: The promise of connecting agency and structure in studies of regional development is to disentangle causal effects and to better understand to what extent and how individuals, groups of individuals, and organisations can shape regional trajectories. This is not without challenges because agency and structure are deep theoretical constructs, which are not easily translated into empirical research. We have devoted a research project to study how agency and structure are connected in the context of regional development and have faced many difficulties on the way. Here, we would like to share our experiences and proposed solutions grouped into six challenges, which were present in all of the 12 comparative case studies in Finland, Norway and Sweden. The challenges refer to the ontology of agency and structure, the research design, the time period of study, the spatial scale, the research instrument, and the data collection.
    Keywords: agency; structure; regional development; research design; comparative case study; critical junctures; key events
    JEL: P48 R10 R58
    Date: 2019–07–23
  9. By: David R. Agrawal; David E. Wildasin
    Abstract: Technological innovations facilitating e-commerce have well-documented effects on consumer behavior and firm organization in the retail sector, but the effects of these new transaction technologies on fiscal systems remain unknown. By extending models of commodity tax competition to include urban spatial structure (agglomeration) and online commerce, one can analyze strategic tax-policy interactions among neighboring localities. Consumers buy different types of commodities, sold either by traditional or by online vendors. When the cost of online shopping falls, we show that equilibrium tax rates and revenues increase in small jurisdictions and decrease in large jurisdictions with retail shopping centers. Policy commentators warn that e-commerce erodes tax revenue - true enough for some localities - but, more accurately, changing transaction costs can generate entirely new commercial and fiscal equilibria that ultimately “redistribute” tax revenues from localities with concentrations of traditional vendors toward other, typically smaller, localities.
    Keywords: sales tax, retail shopping, agglomeration, e-commerce, fiscal competition
    JEL: H25 H71 H73 L81 R50
    Date: 2019
  10. By: Gabriel Rodríguez (Departamento de Economía de la Pontificia Universidad Católica del Perú); Juan Palomino (Departamento de Economía de la Pontificia Universidad Católica del Perú)
    Abstract: This paper analyzes the process of spatial convergence of growth in Peru’s 24 regions over 1979-2017. We perform an exploratory analysis of spatial data with global and local statistics, such as Moran I, to provide empirical evidence of spatial dependencies in regional per capita GDP. We then estimate the convergence equation using spatial panel models that control for spatial heterogeneity and spatial interdependence, as well as other structural economic features at the regional level. The empirical results show that spatial convergence is a very reliable conclusion over this period, and prove that spatial regional per capita GDP spillovers play an essential role in determining growth at the local level. Furthermore, the Spatial Durbin model is preferred in the formation of four clusters of convergence. The first cluster is highly productive and dynamic; the second cluster is composed by Jungle and negative-productivity regions; the third cluster is formed by moderately productive and Coast regions; and the fourth cluster is composed by stagnating and Highland regions. Finally, these results may be instrumental in giving greater focus to long-run government policies targeting stagnant and poor regions. JEL Classification-JEL: C21, C23, R11
    Keywords: Convergencia Regional; Regional Spillovers; Dependencia Espacial; Modelos Espaciales de Datos de Panel; Clubes de Convergencia
    Date: 2019
  11. By: Brummet, Quentin (University of Chicago); Reed, Davin (Federal Reserve Bank of Philadelphia)
    Abstract: We use new longitudinal census microdata to provide the first causal evidence of how gentrification affects a broad set of outcomes for original resident adults and children. Gentrification modestly increases out-migration, though movers are not made observably worse off and neighborhood change is driven primarily by changes to in-migration. At the same time, many original resident adults stay and benefit from declining poverty exposure and rising house values. Children benefit from increased exposure to higher-opportunity neighborhoods, and some are more likely to attend and complete college. Our results suggest that accommodative policies, such as increasing the supply of housing in high-demand urban areas, could increase the opportunity benefits we find, reduce out-migration pressure, and promote long-term affordability
    Keywords: Gentrification; neighborhood change; migration; mobility
    JEL: J62 R11 R21 R23 R28
    Date: 2019–07–16
  12. By: Ray, Saon
    Abstract: In this paper, we examine the Indian apparel industry to examine the effect of clusters on the sales of this industry. The data has been collected through a primary survey in five garments clusters in India. The variable that is significant in explaining sales in most equations is technology proxied by imported machinery. It has been argued that inter-firm linkages and linkages between firms, service providers and institutions are crucial for competitiveness and this is best achieved through a cluster. Studies on clusters have shown that some clusters have been able to deepen their inter-firm division of labour, raise their competitiveness and break into international markets. Agglomeration may arise from the specialization of a region in a particular industry where firms share common inputs or knowledge. We argue that the main reason for India’s poor performance in garments (compared to other South Asian countries such as Bangladesh) is the lack of proper clusters. The development of the cluster in India has followed the ‘top down’ approach and the natural process through which linkages are developed are yet to occur in most clusters.
    Keywords: Competitiveness, garment, cluster, South Asia
    JEL: F14 L2 L23 L67
    Date: 2019–05
  13. By: Wolfgang Britz (Institute for Food and Resource Economics, University of Bonn); Roberto Roson (Department of Economics, University Of Venice Cà Foscari; GREEN Bocconi University Milan; Loyola Andalusia University); Martina Sartori (European Commission, Joint Research Centre, Seville)
    Abstract: In this paper we illustrate the development of a modeling framework aimed at producing detailed quantitative estimates for economic variables, consistent with Shared Socio-economic Pathways, and their assumptions about national income and population. Our model not only provides information on industrial production levels, employment, consumption patterns, trade flows and other macroeconomic variables, but disaggregates them further at the sub-national level, for European NUTS2 regions. Estimates are produced by an especially designed dynamic general equilibrium model (G-RDEM), augmented with a regional down-scaling module. The latter takes into account the different sectoral composition of the regional economies, their endowments of primary resources, as well as the possible existence of structural and agglomeration externalities. After describing the methodology, the paper presents an illustrative sample of results produced by the model, focusing on Italian regions and the Shared Socio-economic Pathway 1 in the period 2011-2051.
    Keywords: Shared Socio-economic Pathways, Regional Economic Growth, Dynamic General Equilibrium Models, Computable General Equilibrium Models, Long-run Economic Scenarios, Structural Change, Economic Growth, Italy
    JEL: C68 C82 C88 D58 E17 F43 O11 O40
    Date: 2019

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