nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒08‒19
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Does College Location Affect the Location Choice of New College Graduates? Evidence from China By Huang, Mian; Xing, Chunbing; Cui, Xiaoyong
  2. Does federal contracting spur development? Federal contracts, income, output, and jobs in US cities By Rodríguez-Pose, Andrés; Gerritse, Michiel
  3. Big plant closures and local employment By Jofre-Monseny, Jordi; Sánchez-Vidal, Maria; Viladecans-Marsal, Elisabet
  4. The Internal Spatial Organization of Firms: Evidence from Denmark By Acosta, Camilo; Lyngemark, Ditte Håkonsson
  5. Roman Transport Network Connectivity and Economic Integration By Flueckiger, Matthias; Hornung, Erik; Larch, Mario; Ludwig, Markus; Mees, Allard
  6. The Fetters of Inheritance? Equal Partition and Regional Economic Development By Thilo R. Huning; Fabian Wahl

  1. By: Huang, Mian (Southwestern University of Economics and Finance); Xing, Chunbing (Beijing Normal University); Cui, Xiaoyong (Peking University)
    Abstract: Based on a representative survey of new college graduates in China, we examine the impact of college location on their location choice upon graduation. We use a discrete choice model and the BLP method to solve the endogeneity problem of housing cost and to estimate the unobservable location features. Furthermore, we allow for different distributions of city preference for graduates studying in different regions to address the self-selection problem of college location. Empirical results show that the graduates are significantly more likely to stay in where they attended college, to return to their hometown, and to avoid cities with high housing costs. Simulation exercise shows that the impact of college location on migration varies considerably across cities, and there is significant heterogeneity for students from universities of different tiers and from rural vs. urban areas. Reduced form evidence suggests that internship in the local labor market plays an important role in raising the probability of staying. College education increased the students' interaction with the local economy and reduced the costs of job search.
    Keywords: higher education, regional development, location choice, human capital
    JEL: J13 J16 J61 J24
    Date: 2019–07
  2. By: Rodríguez-Pose, Andrés; Gerritse, Michiel
    Abstract: Firms and governments alike frequently court federal government contracts to generate more jobs and trigger economic growth. However, the employment and output impact of government contracts remains controversial. We use georeferenced data on United States (US) federal contracts, distinguishing between the location of the recipient and the location of the activity, for the years 2005-2014 in order to assess the employment and output impacts of federal contracting in metropolitan areas of the US. We resort to a shift-share instrument and precise location-specific fixed effects to estimate the causal impact of spending. Cities that receive more contract expenditure witness an expansion in output – with contracts generating $1.4 per dollar spent – but experience only modest increases in employment. The impact is also constrained geographically and short-lived. The results suggest that, on average, the effects of federal contracting on local economies are modest, meaning that attracting federal contracts may not be an effective urban development strategy.
    Keywords: federal contracting; government spending; jobs; wages; economic growth; urban development
    JEL: E62 O23 R11 R38 R58
    Date: 2018–09–01
  3. By: Jofre-Monseny, Jordi; Sánchez-Vidal, Maria; Viladecans-Marsal, Elisabet
    Abstract: This paper estimates the impact of large plant closures on the local employment in the affected industry. Specifically, we examine the closure of 45 large manufacturing plants in Spain which relocated abroad between 2001 and 2006. We run differences-in-differences specifications in which locations that experience a closure are matched to locations with similar pre-treatment employment levels and trends. The results show that when a plant closes, for each job directly lost in the plant closure, only between 0.6 and 0.7 jobs are actually lost in the local affected industry. These effects are driven by employment expansions in local incumbent firms and, to a lesser extent, by the creation of new firms in the local industry.
    Keywords: local employment; plant closures; input-output; 2014SGR420; ES/M010341/1
    JEL: J23 R12 R23 R34
    Date: 2018–01–01
  4. By: Acosta, Camilo; Lyngemark, Ditte Håkonsson
    Abstract: While multi-establishment firms are an important part of the economy, little is known about their spatial organization. In this article, we study how the location and the occupational composition of establishments within firms has changed during the last 36 years. Using Danish administrative employer-employee data, we present a series of stylized facts regarding the spatial internal organization of firms. We show that the average number of establishments at the firm level increased by 36% during this period. Moreover, the average distance of the establishments and workers to their headquarters has increased by more than 200%. These changes are mainly driven by increases in the average distance of production workers and business service workers, and a higher use of the latter. Finally, we show that the ratio of managers to production and clerical workers within firms has increased, in particular in establishments located in the largest urban municipalities. After presenting the facts, we briefly discuss some of the mechanisms that could be behind these changes.
    Keywords: Spatial organization, agglomeration, multi-establishment firms, occupational composition
    JEL: J20 L22 L23 R00 R30
    Date: 2019–07–16
  5. By: Flueckiger, Matthias; Hornung, Erik; Larch, Mario; Ludwig, Markus; Mees, Allard
    Abstract: We show that the creation of the first integrated pan-European transport network during Roman times influences economic integration over two millennia. Drawing on spatially highly disaggregated data on excavated Roman ceramics, we document that interregional trade was strongly influenced by connectivity within the network. Today, these connectivity differentials continue to influence cross-regional firm investment behaviour. Continuity is largely explained by selective infrastructure routing and cultural integration due to bilateral convergence in preferences and values. Both plausibly arise from network-induced history of repeated socio-economic interaction. We show that our results are Roman-connectivity specific and do not reflect pre-existing patterns of exchange.
    Keywords: business links; cultural similarity; economic integration; Roman trade; transport network connectivity
    JEL: F15 F21 N73 O18 R12 R40
    Date: 2019–07
  6. By: Thilo R. Huning (University of York); Fabian Wahl (University of Hohenheim)
    Abstract: How can agricultural inheritance traditions affect structural change and economic development in rural areas? The most prominent historical traditions are primogeniture, where the oldest son inherits the whole farm, and equal partition, where land is split and each heir inherits an equal share. In this paper, we provide a theoretical model that links these inheritance traditions to the local allocation of labor and capital and to municipal development. First, we show that among contemporary municipalities in West Germany, equal partition is significantly related to measures of economic development. Second, we conduct OLS and fuzzy spatial RDD estimates for Baden-Württemberg in the 1950s and today. We find that inheritance rules caused, in line with our theoretical predictions, higher incomes, population densities, and industrialization levels in areas with equal partition. Results suggest that more than a third of the overall inter-regional difference in average per capita income in present-day Baden Württemberg, or 597 Euro, can be explained by equal partition.
    Keywords: Inheritance Rules, Sectoral Change, Regional Economic Development, Baden-Württemberg, Spatial Inequalities
    JEL: D02 D82 H11 H21 N93
    Date: 2019–08

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