nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒01‒06
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Tales of the city: what do agglomeration cases tell us about agglomeration in general? By Faggio, Giulia; Silva, Olmo; Strange, William C.
  2. The Shrinking Advantage of Market Potential By Marius Brülhart; Klaus Desmet; Gian-Paolo Klinke
  3. Commuting, migration and local joblessness By Amior, Michael; Manning, Alan
  4. EU Economic Modelling System By Olga Ivanova; d'Artis Kancs; Mark Thissen
  5. Agglomeration of Low-productive Entrepreneurs to Large Regions: A Simple Model By Rikard FORSLID; OKUBO Toshihiro
  6. Regional Trade Flows and Input Output Data for Europe By Olga Ivanova; d'Artis Kancs; Mark Thissen
  7. Adult Mortality Differentials and Regional Development at the local level in Brazil, 1980-2010 By Queiroz, Bernardo L; Lima, Everton; Gonzaga, Marcos Roberto; Freire, Flávio
  8. Economic development in Sardinia: overcoming the insularity gap By B. Biagi; B. Dettori; S. Usai; R. Paci
  9. Regional variation in apprenticeship and permanent employment rates: which causes? By D. Sonedda
  10. New York State Economic Status of Regions and Development Programs By Michael Wasylenko
  11. Ease versus noise: long-run changes in the value of transport (dis)amenities By Ahlfeldt, Gabriel M.; Nitsch, Volker; Wendland, Nicolai
  12. The Academic Market And The Rise Of Universities In Medieval And Early Modern Europe (1000-1800) By David De La Croix; Frédéric Docquier; Alice Fabre; Robert Stelter
  13. mgwr: A Python implementation of multiscale geographically weighted regression for investigating process spatial heterogeneity and scale By Oshan, Taylor M.; Li, Ziqi; Kang, Wei; Wolf, Levi John; Fotheringham, Alexander Stewart
  14. Exenciones tributarias y desarrollo regional: evidencia de Colombia By Luis Armando Galvis-Aponte; Leonardo Bonilla-Mejía; Sara María Gómez-Mesa

  1. By: Faggio, Giulia; Silva, Olmo; Strange, William C.
    Abstract: This paper considers the heterogeneous microfoundations of agglomeration economies. It studies the co-location of industries to look for evidence of labor pooling, input sharing, and knowledge spillovers. The novel contribution of the paper is that it estimates single-industry models using a common empirical framework that exploits the cross-sectional variation in how one industry co-locates with the other industries in the economy. This unified approach yields evidence on the relative importance of the Marshallian microfoundations at the single-industry level, allowing for like-for-like cross-industry comparisons on the determinants of agglomeration. Using UK data, we estimate such microfoundations models for 97 manufacturing sectors, including the classic agglomeration cases of automobiles, computers, cutlery, and textiles. These four cases – as with all of the individual industry models we estimate – clearly show the importance of the Marshallian forces. However, they also highlight how the importance of these forces varies across industries – implying that extrapolation from cases should be viewed with caution. The paper concludes with an investigation of the pattern of heterogeneity. The degree of an industry’s clustering (localization), dynamism, incumbent firm size, and worker education are shown to contribute to the pattern of heterogeneous microfoundations.
    Keywords: agglomeration; microfoundations; heterogeneity; industrial clusters
    JEL: R10 R12 L52 L60
    Date: 2019–05
  2. By: Marius Brülhart; Klaus Desmet; Gian-Paolo Klinke
    Abstract: How does a country's economic geography evolve along the development path? This paper documents recent employment growth in 18,961 regions in eight of the world's main economies. Overall, market potential is losing importance, and local density is gaining importance, as correlates of local growth. In mature economies, growth is strongest in low-market-potential areas. In emerging economies, the opposite is true, though the association with market potential is also weakening there. Structural transformation away from agriculture can account for some of the observed changes. The part left unexplained by structural transformation is consistent with a standard economic geography model that yields a bell-shaped relation between trade costs and the growth of centrally located regions.
    JEL: O18 R11 R12
    Date: 2019–12
  3. By: Amior, Michael; Manning, Alan
    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
  4. By: Olga Ivanova; d'Artis Kancs; Mark Thissen
    Abstract: This is the first study that attempts to assess the regional economic impacts of the European Institute of Innovation and Technology (EIT) investments in a spatially explicit macroeconomic model, which allows us to take into account all key direct, indirect and spatial spillover effects of EIT investments via inter-regional trade and investment linkages and a spatial diffusion of technology via an endogenously determined global knowledge frontier with endogenous growth engines driven by investments in knowledge and human capital. Our simulation results of highly detailed EIT expenditure data suggest that, besides sizable direct effects in those regions that receive the EIT investment support, there are also significant spatial spillover effects to other (non-supported) EU regions. Taking into account all key indirect and spatial spillover effects is a particular strength of the adopted spatial general equilibrium methodology; our results suggest that they are important indeed and need to be taken into account when assessing the impacts of EIT investment policies on regional economies.
    Keywords: DSGE modelling, innovation, productivity, human capital, SCGE model, spatial spillovers.
    JEL: C68 D58 F12 R13 R30
    Date: 2019–10–10
  5. By: Rikard FORSLID; OKUBO Toshihiro
    Abstract: This paper develops a simple model of spatial sorting where the least productive entrepreneurs are drawn to the large core region. This is an unusual feature. The literature on spatial sorting typically shows how the most productive individuals and firms agglomerate to the core. However, our model is consistent with data that reveals that large agglomerations also attract unproductive entrepreneurs.
    Date: 2019–12
  6. By: Olga Ivanova; d'Artis Kancs; Mark Thissen
    Abstract: The Regional Trade Flows and Input output Data for Europe are constructed at the regional NUTS2 level with sectoral NACE2 detail and developed for spatial macroeconomic modelling and social-economic analysis for answering a wide-range of policy questions, including policies related to investments in innovation, human capital, green infrastructure and Sustainable Development Goals. The Regional Trade Flows and Input output Data for Europe are particularly well suited for structural modelling such as spatial computable general equilibrium models, as all data are fully internally consistent. In the Regional Trade Flows and Input output Data all European regions are connected with each other via inter-regional trade flows, input use and output supply in form of regional trade matrices, input output tables and supply-use tables. This data base is result of a joint collaborative effort over a decade of several research institutes across Europe, including the Netherlands Environmental Assessment Agency (PBL), the European Commission (DG JRC) and the University of Groningen (Ivanova, Kancs and Stelder 2009, Thissen et al. 2014, Thissen et al. 2018, Ivanova, Kancs and Thissen 2019). Among others, the new EU Economic Modelling System (EU-EMS) developed within the EU Framework Programme for Research and Innovation makes use of the Regional Trade Flows and Input output Data for Europe.
    Keywords: Inter-Regional Trade Flows, Input output Tables, data, Europe, spatial spillovers, SCGE, modelling.
    JEL: C68 D58 F12 R13 R30
    Date: 2019–10–06
  7. By: Queiroz, Bernardo L (Universidade Federal de Minas Gerais, Brazil); Lima, Everton; Gonzaga, Marcos Roberto; Freire, Flávio
    Abstract: In this paper, we study study spatial and temporal adult mortality trends in small areas of Brazil, from 1980 to 2010, and its relation to socioeconomic and public health developments. Brazil is marked by huge regional and social inequality and it is important to understand how it could be related to trends and differences in adult mortality. There are several studies about trends in infant and child mortality, but much less is known about adult mortality. We are also interested in understand whether there is a convergence or divergence in adult mortality. This is relevant because changes in life expectancy in the near future could be heavily explained by differences in adult mortality as infant and child mortality have shown signs of convergence in recent years
    Date: 2018–08–07
  8. By: B. Biagi; B. Dettori; S. Usai; R. Paci
    Abstract: Under which conditions Sardinia - a peripheral island with a small population – can proceed along a steady path of economic development? This is the crucial question addressed in this paper which examines the economic and social situation of Sardinia within the national and the European scenario characterized by a strong polarization process fueled by agglomeration forces. The analysis suggests facing the demographic turndown by investing in education, innovation and local institutions in order to provide a better environment to citizens and firms and to exploit regional comparative advantages.
    Keywords: tourism;sardinia;regional growth;Insularity
    Date: 2019
  9. By: D. Sonedda
    Abstract: A fundamental observation of the 21st century is the substantial drop in permanent employment occupations. In this paper, I seek to understand the geographic variation in apprenticeship and the consequent permanent employment rates. I exploit a unique setting in Italy to verify whether regional disparities in general education and production systems play a key role in determining vocational apprenticeship rates and in determining how this labor contract creates job matches that persist over time. I find that when the quality of the regional education system is good, the medium-run gains in terms of permanent employment can be moderate. However, a small number of active firms in a region limits the quantity of job entries as apprentices.
    Keywords: human capital;local labour market;education system;production system
    Date: 2019
  10. By: Michael Wasylenko (Center for Policy Research, Maxwell School, Syracuse University, 426 Eggers Hall, Syracuse, NY 13244)
    Keywords: New York State Economy; New York State Economic Development Programs; New York State Property
    JEL: R12 R58
    Date: 2020–01
  11. By: Ahlfeldt, Gabriel M.; Nitsch, Volker; Wendland, Nicolai
    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 longrun. 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.
    JEL: R12 R14 R41 N73 N74
    Date: 2019–06
  12. By: David De La Croix (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Frédéric Docquier (LISER, Esch-sur-Alzette, Luxembourg); Alice Fabre (AMSE, Université Aix-Marseille, France); Robert Stelter (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Medieval universities are one of the most original creations of Western civilization. Students were educated by a plurality of masters, and scholars came from all parts of Europe. In this paper, we build an original database of thousands of scholars from university sources, and map the academic market in the medieval and early modern periods. Using a random utility model, we show that scholars tend to agglomerate in the best universities, and that this phenomenon is more pronounced within the upper tail of the talent distribution (positive sorting). The quality of scholars is measured by their publications. Agglomeration and sorting patterns testify to a functioning academic market, made possible by political fragmentation and the use of a common language (Latin). Using counterfactual simulations, we show that market forces shaped the geographic distribution of upper-tail human capital across Europe, and contributed to bolstering European universities at the dawn of the Humanistic and Scientific Revolutions.
    Keywords: Upper-Tail Human Capital, Universities, Discrete choice model, Scholars, Publications, Agglomeration.
    JEL: N33 O15 I25
    Date: 2019–11
  13. By: Oshan, Taylor M.; Li, Ziqi; Kang, Wei (University of California Riverside); Wolf, Levi John (University of Bristol); Fotheringham, Alexander Stewart
    Abstract: Geographically weighted regression (GWR) is a spatial statistical technique that recognizes traditional 'global' regression models may be limited when spatial processes vary with spatial context. GWR captures process spatial heterogeneity via an operationalization of Tobler's first law of geography: "everything is related to everything else, but near things are more related than distant things" (1970). An ensemble of local linear models are calibrated at any number of locations by 'borrowing' nearby data. The result is a surface of location-specific parameter estimates for each relationship in the model that may vary spatially, as well as a single bandwidth parameter that provides intuition about the geographic scale of the processes. A recent extension to this framework allows each relationship to vary according to a distinct spatial scale parameter, and is therefore known as multiscale (M)GWR. This paper introduces mgwr, a Python-based implementation for efficiently calibrating a variety of (M)GWR models and a selection of associated diagnostics. It reviews some core concepts, introduces the primary software functionality, and demonstrates suggested usage on several example datasets.
    Date: 2018–10–02
  14. By: Luis Armando Galvis-Aponte; Leonardo Bonilla-Mejía; Sara María Gómez-Mesa
    Abstract: Este trabajo evalúa el impacto de los incentivos tributarios a empresas en el Desarrollo regional mediante el estudio de la Ley Páez en Colombia. Esta Ley fue promulgada para atraer empresas a la región afectada por el terremoto y la avalancha del Río Páez en el año 1994. Este es un experimento natural particularmente interesante dado que la ley surgió de un fenómeno imprevisto y se incluyeron numerosos municipios que no fueron directamente afectados por el desastre. Esto nos permite diferenciar el efecto de los beneficios tributarios de otros factores relacionados con la tragedia, como los daños materiales y las ayudas a los damnificados. Los efectos causales se identifican comparando los municipios beneficiarios de la Ley, afectados y no afectados, con un grupo de controles sintéticos construidos a partir de la metodología de balance de trayectorias. Los resultados indican que las políticas de exenciones no tuvieron mayores efectos, ni en las finanzas públicas locales ni en la calidad de vida. En un ejercicio complementario se evalúa el efecto de la Ley Quimbaya de 1999, que benefició a los municipios afectados por el terremoto del Eje Cafetero, encontrando resultados similares. **** ABSTRACT: This document aims to evaluate the impact of tax incentives granted to companies on regional development by studying the Páez Law in Colombia. This law was promulgated to attract firms to the region affected by the earthquake and the avalanche of the Páez River in 1994. This is a particularly interesting natural experiment since the law arose from an unexpected shock and numerous municipalities that were not directly affected by the disaster were covered by its benefits. This allows us to differentiate the effect of tax exemptions from other factors related to the tragedy, such as property damage and aid to the victims. The causal effects are identified by comparing the municipalities that are beneficiaries of the law, affected and not affected, with a group of synthetic controls built on the trajectory balancing methodology. The results indicate that exemption policies had no major effects, either on local public finances or on the quality of life. In a complementary exercise, the effect of the Quimbaya Act of 1999 is evaluated, finding similar results. This Law benefited the municipalities affected by the Coffee Belt earthquake.
    Keywords: Exenciones tributarias, ley Páez, desarrollo regional, geografía económica, controles sintéticos, balanceo de trayectorias tax exemptions, Páez Law, regional development, economic geography, synthetic control methods, trajectory balancing
    JEL: R11 R15 R58
    Date: 2019–12–24

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