nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒08‒12
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Of Trees and Monkeys. The evolution of technological specialization of European regions By Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
  2. Lagging-behind Areas as a Challenge to the Regional Development Strategy: What Insights can New and Evolutionary Economic Geography Offer? By Seyed Peyman Asadi; Ahmad Jafari Samimi
  3. Global bifurcation mechanism and local stability of identical and equidistant regions By Gaspar, José M.; Ikeda, Kiyohiro; Onda, Mikihisa
  4. Technological regimes and the geography of innovation: a long-run perspective on US inventions By Dario Diodato; Ahmad Andrea Morrison
  5. Residential Mobility and Unemployment in the UK By Monica Langella; Alan Manning
  6. Does fiscal decentralization affect regional disparities in health? Quasi-experimental evidence from Italy. By Cinzia Di Novi; Massimiliano Piacenza; Silvana Robone; Gilberto Turati
  7. Some stylized facts about deindustrialization in Europe By José Pedro Pontes
  8. The Economic Impact of Small Regional Commissions: Evidence from the Delta Regional Authority By Morin, Tyler; Partridge, Mark
  9. Does visible shock update firms' unrelated trade diversity in anticipation of future shock? Evidence from the Great East Japan Earthquake and expected Nankai Trough Earthquake By Takano, Keisuke

  1. By: Mario A. Maggioni; Emanuela Marrocu; Teodora Erika Uberti; Stefano Usai
    Abstract: The question about how regions develop and evolve along their productive and technological path is central in many scientific fields from international economics, to economic geography, from industrial economics to regional science. Within an evolutionary perspective, we believe that a region is most likely to develop new industries or new technologies, which are closer to its pre-existing specialization. Our research builds on an empirical stream of literature, started by Hausmann and Klinger (2007) and Hidalgo et al. (2007), aimed at tracing the evolution of industrial specialisation at the country level following the evolution of export portfolios. We refocus this line of analysis on the regional European technology/knowledge space along the research avenue started by Kogler et al. (2017). We aim at investigating the pattern and the evolution of regional specialisation in the EU in terms of the interaction of (i) endogenous processes of knowledge recombination and localised technological change, (ii) exogenous technological paradigm shifts and (iii) trans-regional spatial and technological spillovers and networking dynamics. More specifically, our paper maps the technological trajectories of 198 EU regions over the period 1986-2010 by using data on 121 patent sectors in the NUTS2 regions of the 11 most innovative EU countries, plus Switzerland and Norway. We map the knowledge space following two approaches: a micro level one, based on co-classification information contained in patent documents (Engelsman and Van Raan, 1992; Kogler et al., 2017), and a macro level, based on conditional co-specialisations of regions in the same patent classes (Hidalgo et al., 2007). These two representations of the knowledge space serve as a basis for understanding the evolution of regional technological specialization, measured in terms of the sector-region relative technological advantage (RTA), and for modelling its dynamics as a function of spatial, technological and socio-cognitive proximity. Preliminary results show that regional technological paths display a significant level of path dependence in, which the technological specialization is significantly shaped by both localised technological change and recombinant innovation. We also find evidence of local spillover spillovers induced by both geographic and technological proximity.
    JEL: O14 O31 O33 O52 R11 R12 C21
    Date: 2019
  2. By: Seyed Peyman Asadi; Ahmad Jafari Samimi
    Abstract: Lagging-behind areas, as an example of convergence failure within a country, have attracted the attention of many researchers who try to adopt appropriate policies and strategies to overcome the problem of low growth paths. The current study concentrates on policy recommendations in the framework of New Economic Geography and Evolutionary Economic Geography for the lagging regions. The agglomerated industry, as a fundamental element of the new economic geography, has limited the potentials of policy prescriptions for lagging-behind areas. Constructing regional advantages, as a policy in evolutionary economic geography, has helped diversifying the policy options for the lagging-behind regions. However, this approach is faced with multi-level challenges in lagging-behind areas including the lack of critical mass in the case of low related variety and the knowledge base gap between the lagging and prosperous regions. Therefore, the policy should provide a structure for the simulation of external knowledge links and differentiate the nature of various related industries if it is going to be a basis for constructing regional advantages.
    Keywords: Lagging-behind areas, development strategy, New Economic geography, Evolutionary Economic Geography
    JEL: R11 R12 R58
    Date: 2019–07
  3. By: Gaspar, José M.; Ikeda, Kiyohiro; Onda, Mikihisa
    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 Urb Econ) 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 with 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: 2019–07–11
  4. By: Dario Diodato; Ahmad Andrea Morrison
    Abstract: The geographical distribution of innovative activities is an emerging subject, but still poorly understood. While previous efforts highlighted that different technologies exhibit different spatial patterns, in this paper we analyse the geography of innovation in the very long run. Using a US patent dataset geocoded for the years 1836-2010, we observe that ? while it is true that differences in technologies are strong determinant of spatial patterns ? changes within a technology over time is at least as important. In particular, we find that regional entry follows the technology life cycle. Subsequently, innovation becomes less geographical concentrated in the first half of the life cycle, to then re-concentrate in the second half.
    Keywords: technological regime, spatial patterns of innovation, life cycle, patents, US Economic Geography
    JEL: R11 O11
    Date: 2019–07
  5. By: Monica Langella; Alan Manning
    Abstract: The UK has suffered from persistent spatial differences in unemployment rates for many decades. A low responsiveness of internal migration to unemployment is often argued to be an important cause of this problem. This paper uses UK census data to investigate how unemployment affects residential mobility using very small areas as potential destinations and origins and four decades of data. It finds that both in- and out-migration are affected by unemployment, although the effect on in-migration appears to be stronger - but also that there is a very high 'cost of distance' so most moves are very local. Using individual longitudinal data we show that the young and the better educated have a lower cost of distance but that sensitivity to unemployment shows much less variability across groups.
    Keywords: residential mobility, regional inequality, unemployment
    JEL: Z1 J01 R10 J21
    Date: 2019–07
  6. By: Cinzia Di Novi; Massimiliano Piacenza; Silvana Robone; Gilberto Turati (Università Cattolica del Sacro Cuore; Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)
    Abstract: Recent theories on fiscal decentralization support the view that sub-national governments who finance a larger share of their spending with taxes raised locally by themselves are more accountable towards their citizens. Whilst evidence on improvements in spending efficiency is relatively common, little is known about the effects on inequalities amongst the population. In this paper we exploit a reform aimed at increasing regional tax autonomy in Italy to provide quasi-experimental evidence on the impact of fiscal decentralization on health disparities between- and within-regions. Our findings, robust to a number of robustness checks, support the view that fiscal decentralization does not impact on between-regional inequalities but can help to reduce inequalities within regions. However, this last effect depends on the degree of economic development: richer regions are better than poorer ones in containing inequalities.
    Keywords: fiscal decentralization, regional governments, healthcare policy, health inequalities.
    JEL: H75 I14 I15 I18 R50
    Date: 2019–07
  7. By: José Pedro Pontes
    Abstract: This paper highlights three main trends concerning the evoulution of the proportion of manufacturing in overall productive activity across European countries. Firstly, we are able to detect a non monotonic spatial pattern with deindustrialization prevailing both close to the European core and in remote areas. Secondly, industrialization appears to be faster in countries newly admitted to the European Union, whose trade costs with the European core are falling sharply. Finally, a specialization in high-tech, value added intensive sectors seems to prevent deindustrialization of core European countries but it has not the same effect on those which joined the European Union more recently.
    Keywords: Manufacturing, Deindustrialization, Location
    JEL: L6 O3 R3
    Date: 2019–07
  8. By: Morin, Tyler; Partridge, Mark
    Abstract: Factors such as falling U.S. migration rates and diverging regional economic fortunes have heightened interest in place-based policies. Indeed, the U.S. has had many such federal efforts including recently enacted Opportunity Zones. Historically, substantial federal funding has gone to regional economic development programs such as the Tennessee Valley Authority (TVA) and Appalachian Regional Commission (ARC). Yet, little is known about the benefits of some of the smaller place-based programs. We extend the literature on regional commissions by analyzing the economic gains to the Delta Regional Authority (DRA). The DRA was founded in 2000 to provide enhanced development aid to 252 Lower Mississippi Valley counties. Using data over the 1997 to 2016 period, we assess the DRA’s impact on employment, income, migration, and poverty. One-to-one propensity score matching is used to generate a set of counterfactual counties. Due to the endogenous nature of the treatment, we instrument for counties being included in the DRA using a dummy for whether the county is within the Lower Mississippi Watershed. The ensuing results reflects an estimation of the intent- to-treat benefits of the DRA. We find that the DRA is associated with income gains and decreases in unemployment; however, no impact on poverty or migration. In sum, the DRA produces economic benefits that greatly exceed its direct costs.
    Keywords: Rural economic development, place-based policy, program evaluation
    JEL: R11 R58
    Date: 2019–06–26
  9. By: Takano, Keisuke
    Abstract: This paper investigates empirically the interrelationship between the update of risk perception of expected disaster through the actual disaster damage and the change in the spatial distribution of inter-firm transactional networks (supply chains) around the hazardous area of the expected Nankai Trough Earthquake after the Great East Japan Earthquake from 2009 to 2017. By adopting the propensity score matching and the difference-in-difference (-indifferences) method, this study estimates the effects of tsunami damage on the magnitude of the spatial dispersion of the supply chain network stemmed from risk perception. The results show that the existence of suppliers in the Nankai Trough area per se did not or marginally lead to the supply chain dispersion regardless of the size of firms, while the supply chains of medium-size firms who had suppliers in both the Nankai Trough area and the damaged area of the Great East Japan Earthquake was spatially dispersed after 2011.
    Keywords: Interregional trade, Supply chain, Disaster risk, Spatial pattern, Diversity
    JEL: R11 R12 Q54
    Date: 2019–06

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