nep-geo New Economics Papers
on Economic Geography
Issue of 2019‒10‒21
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Locational Choice and Spatial Wage Inequality By Schran, Felix
  2. A geography of corporate knowledge flows across world regions: evidence from patent citations of top R&D-investing firms By Mafini Dosso; Didier Lebert
  3. How do trade and communication costs shape the spatial organization of firms? By Gokan, Toshitaka; Kichko, Sergey; Thisse, Jacques-François
  4. A shot in the dark? Policy influence on cluster networks By Holger Graf; Tom Broekel
  5. The geography of EU discontent By Dijkstra, Lewis; Poelman, Hugo; Rodríguez-Pose, Andrés
  6. Assessing the migration and social instability nexus in sub-saharan Africa : A spatial analysis By fofana, moustapha; Lawson, Laté; ballo, zié
  7. Political equality and quality of government By Ezcurra, Roberto; Zuazu, Izaskun
  8. A spatiotemporal framework for the analytical study of optimal growth under transboundary pollution By Raouf Boucekkine; Giorgio Fabbri; Salvatore Federico; Fausto Gozzi
  9. Industry 4.0, towards a de-globalization of value chains? Expected effects of advanced industrial robotics and additive manufacturing on the coordination system By Vincent FRIGANT

  1. By: Schran, Felix (University of Bonn and IZA)
    Abstract: During the last few decades, aggregate wage growth has been very unevenly distributed across space in Germany. While wages in Southern German local labor markets rose by up to 28 log points, they increased only modestly or even declined in the north. Similar results apply to employment changes. Overall, this has led to a strong positive correlation between local wage and employment growth. What is driving these differential trends across space? This paper examines to what extent regions with growing employment are increasingly paying workers higher wage premia or, in contrast, to what extent the quality of workers in growing regions has risen. To decouple the demand for skill and supply of skill from each other, I estimate how regional wage premia have changed over time using administrative panel data that allow me to hold constant changes in unobserved worker quality. I find that wage premia in regions with expanding employment did not rise more than in regions with declining employment. Instead, the quality of workers in growing regions went up. I investigate the importance of various possible observables for this relationship including local amenity differences, changes in occupation and industry structure as well as variation in education rates. Last, I explore the impact of changing wage premia and changing worker quality on the recent rise in the density wage premium.
    Keywords: location choice, density premium, Roy model
    JEL: R11 R12 J21 J24 J31
    Date: 2019–09
  2. By: Mafini Dosso (European Commission - JRC); Didier Lebert (ENSTA ParisTech, UniversiteÌ Paris-Saclay (France))
    Abstract: This exploratory study looks at the structural and geographical patterns of corporate knowledge flows from a regional perspective. The methodological approach combines the centrality indicators developed in the social network analysis (SNA) and complementary tools from the graphs theory to assess the betweenness centrality of regions (or poles)- their ability to control knowledge flows within a network or to impact its cohesiveness - and the relative contribution of individual firms (or layers) to the centrality of regions. The combination of the two approaches brings relevant insights on the way large R&D-driven firms organise their knowledge sourcing and generation across world regions
    Keywords: patent citations; knowledge flows; graphs theory; regions; top corporate R&D investors.
    JEL: L14 O33 R58
    Date: 2019–10
  3. By: Gokan, Toshitaka; Kichko, Sergey; Thisse, Jacques-François
    Abstract: We consider an economic geography setting in which firms are free to choose one of the following organizational types: (i) integrated firms, which perform all their activities at the same location, (ii) horizontal firms, which operate several plants producing the same good at different locations, and (iii) vertical firms, which perform distinct activities at separated locations. We show that there exists a unique organizational equilibrium, which typically involves the coexistence of various organizational forms. We also give necessary and sufficient conditions for the three types of firms to coexist within the same region and show that transportation and communication costs have opposite effects on firms' organizational choices. This suggests that, depending on its nature, the supply of a new transportation infrastructure may lead to contrasted locational patterns.
    Keywords: Communication costs; horizontal firm; Region; Transportation Costs; vertical firm
    JEL: F12 F21 R12
    Date: 2019–10
  4. By: Holger Graf; Tom Broekel
    Abstract: Cluster policies are often intended and designed to promote interaction in R&D among co-located organisations, as local knowledge interactions are perceived to be underdeveloped. In contrast to the popularity of the policy measure little is known about its impact on knowledge networks, because most scientific evaluations focus on impacts at the firm level. Using the example of the BioRegio contest, we explore cluster policy effects on local patent co-application and co-invention networks observed from 1985 to 2013, in 17 German regions. We find that the initiative increases network size and innovation activities during the funding period but not afterwards. The impact of the BioRegio contest on network cohesion is moderate. In contrast, general project-based R&D subsidisation is found to support cohesion more robustly.
    Keywords: Cluster Policy, Knowledge Networks, Network Analysis, Patent Data, Regional Innovation, Policy Evaluation
    JEL: O31 Z13
    Date: 2019–10
  5. By: Dijkstra, Lewis; Poelman, Hugo; Rodríguez-Pose, Andrés
    Abstract: Support for parties opposed to EU-integration has risen rapidly and a wave of discontent has taken over the EU. This discontent is purportedly driven by the very factors behind the surge of populism: differences in age, wealth, education, or economic and demographic trajectories. This paper maps the geography of EU discontent across more than 63,000 electoral districts in the EU-28 and assesses which factors push anti-EU voting. The results show that anti-EU vote is mainly a consequence of local economic and industrial decline in combination with lower employment and a less educated workforce. Many of the other suggested causes of discontent, by contrast, matter less than expected or their impact varies depending on levels of opposition to European integration.
    Keywords: Anti-Europeanism; anti-system voting; economic decline; education; European Union; industrial decline; migration; populism
    JEL: D72 R11
    Date: 2019–10
  6. By: fofana, moustapha; Lawson, Laté; ballo, zié
    Abstract: The reverse effects of migration in enhancing small-scale social unrest seem less regarded in the existing studies on social conflicts in Africa. Thus, this paper proposes to reversely assess the migration and social instability nexus in Africa, exploiting data on “riots and protests” and “violence against civilians”. In addition to geographical spillovers in social instability, our results indicate that increasing migrants stock enhances small-scale internal conflicts in African countries. On the contrary, good economic performances and openness to trade are found to be reducing social conflicts. Globally, our results impel political actors and regional unions to further implement specific policies for the inclusive integration of regional migrants.
    Keywords: Small-scale conflicts; migration, spatial spillovers; development; Sub-Saharan Africa
    JEL: C23 O15 Q34
    Date: 2019–07–30
  7. By: Ezcurra, Roberto; Zuazu, Izaskun
    Abstract: This paper examines the relationship between political equality and quality of government. Our hypothesis is that political equality fosters access to inclusive education and ultimately promotes good governance. We empirically test this hypothesis using data for 145 countries with different levels of economic development. In order to overcome potential endogeneity problems, our identification strategy exploits the variation in political equality in geographically neighbouring countries by means of spatial econometric techniques. The results reveal a positive and statistically significant effect of political equality on the quality of government. This implies that countries where the political power is more evenly distributed tend on average to have higher levels of institutional quality. In fact, this result is not affected by the inclusion in the analysis of a substantial number of controls that may be correlated with both political equality and quality of government, including the level of democracy and the degree of economic inequality. In fact, the observed link between political equality and governance remains robust to alternative measures of quality of government, estimation techniques, and other sensitivity checks. Our estimates also show that education acts as a transmission channel linking political equality and quality of government.
    Keywords: political equality, quality of government, education.
    JEL: H11 P48
    Date: 2019–10–11
  8. By: Raouf Boucekkine (Aix-Marseille Univ, CNRS, EHESS, Ecole Centrale, IMERA & AMSE, Marseille, France); Giorgio Fabbri (Univ. Grenoble Alpes, CNRS, INRA, Grenoble INP, GAEL, 38000 Grenoble); Salvatore Federico (Universita degli Studi di Siena, Dipartimento di Economia Politica e Statistica, Siena, Italy); Fausto Gozzi (Dipartimento di Economia e Finanza, LUISS Guido Carli, Rome, Italy)
    Abstract: We construct a spatiotemporal frame for the study of optimal growth under transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be space-independent. This provides a comprehensive setting to analyze pollution diffusion with a close account of geographic heterogeneity. The involved optimization problem is infinite-dimensional. We propose an alternative method for an analytical characterization of the optimal paths and the asymptotic spatial distributions. The method builds on a deep economic concept of pollution spatiotemporal welfare effect, which makes it definitely useful for economic analysis.
    Keywords: optimal growth, spatiotemporal modelling, transboundary pollution, infinite dimensional optimal control
    JEL: Q53 R11 C61 R12 O41
    Date: 2019–10
  9. By: Vincent FRIGANT
    Abstract: The aim of this paper is to provide a framework for understanding how advanced industrial robotics and additive manufacturing technologies lead to restructuring the geography of value chains. Build on an analytical framework in terms of “coordination system”, we explain how these two technological bricks reinforce the centrifugal and centripetal forces determining the degree of globalization of the value chains. The analysis of the empirical literature suggests that rapidly developing advanced industrial robotics has an ambiguous (but likely) potential for tightening value chains, while the most difficult to deploy additive manufacturing has a high de-globalisation potential. The conclusion calls for quantitative work to better guide public policy in favor of Industry 4.0.
    Keywords: Industry 4.0; Advanced industrial robotics; Additive manufacturing; Global value chain; Relocation; De-globalization
    JEL: L23 O33 F23
    Date: 2019

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.
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