nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒01‒13
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. A multi-sector model of relatedness, growth and industry clustering By Steven Bond-Smith; Philip McCann
  2. Global networks, local specialisation and regional patterns of innovation By Andrea Ascani; Luca Bettarelli; Laura Resmini; Pierre-Alexandre Balland
  3. The unintended consequences of increasing returns to scale in geographical economics By Steven Bond-Smith
  4. Place-based Policy and Local TFP. By Giuseppe Albanese; Guido de Blasio; Andrea Locatelli
  5. Institutions and the Productivity Challenge for European Regions By Andrés Rodríguez-Pose; Roberto Ganau
  6. International Collaboration In Higher Education Research: A Gravity Model Approach By Stanislav Avdeev
  7. How New Airport Infrastructure Promotes Tourism: Evidence from a Synthetic Control Approach in German Regions By Luisa Dörr; Florian Dorn; Stefanie Gäbler; Niklas Potrafke
  8. Why do banks close? The geography of branch pruning By Paolo Emilio Mistrulli; Luca Antelmo; Maddalena Galardo; Iconio Garrì; Dario Pellegrino; Davide Revelli; Vito Savino
  9. Barriers to Entry and Regional Economic Growth in China By Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
  10. Why do planes not fly the shortest routes? A review By Frédéric Dobruszkes
  11. How to Draw the Line: A Note on Local Market Definition By Dieter Pennerstorfer; Biliana Yontcheva
  12. Testing the Spatial Accuracy of Address Based Geocoding for Gun Shot Locations By Wheeler, Andrew Palmer; Gerell, Manne; Yoo, Youngmin
  13. Impacto de los efectos espaciales en la convergencia regional. Análisis departamental para la Argentina By Mauricio Rodrigo Talassino and Marcos Herrera

  1. By: Steven Bond-Smith (Bankwest Curtin Economic Centre, Curtin University); Philip McCann (Faculty of Spatial Sciences, University of Groningen)
    Abstract: This article builds an understanding of regional innovation specialization by developing a multi-sector model with endogenous growth through quality improving innovations and spillovers from related technologies. The model provides an approach to incorporate the relatedness literature within the mainstream theoretical frameworks of endogenous growth and economic geography. Each firm’s technology sector and the location of other firms play a role in each firm’s ability to improve its own technology. As a result, firms prefer to co-locate in technologically compatible clusters. Without relying on scale assumptions, the model for the first time coherently links related variety knowledge spillovers to mainstream urban economic frameworks and demonstrates that clustering is possible in both core and peripheral areas.
    Keywords: Innovation; endogenous growth; knowledge spillovers; relatedness; clusters
    JEL: R11 O41
    Date: 2019–09
  2. By: Andrea Ascani; Luca Bettarelli; Laura Resmini; Pierre-Alexandre Balland
    Abstract: A large academic consensus exists on the idea that successful innovative processes are geographically bounded within regions. Nevertheless, the ability of regions to capture and re-use external knowledge is also regarded as a fundamental element to sustain and refine the local profile of specialisation and competitiveness. The present article combines these views to investigate the sources of the regional innovation process, by analysing data on Italian regions over the period 2007-2012. We define regional external networks based on all the foreign subsidiaries of local multinational enterprises identifiable as global ultimate owners. Our main results suggest that both the internal specialisation and the outward networks can generate indigenous innovation, but the role of the networks varies substantially according to its density, its degree of complementarity with the specialisation profile, its geographical spread and the specific location of the foreign subsidiaries. Our results, then, support a view of the regional innovation as an interactive process whereby valuable knowledge resources are not only generated within the reach of the local economy, but they are also integrated with external inputs. This contrasts with recent anti-globalisation views according to which the increase in the foreign operations of national companies impoverishes the local economy.
    Keywords: outward foreign direct investment, innovation, specialisation, networks, relatedness
    JEL: O3 F23 R10 F60
    Date: 2020–01
  3. By: Steven Bond-Smith (Bankwest Curtin Economic Centre, Curtin University)
    Abstract: Increasing returns to scale is now fundamental to both economics and economic geography. But first generation theories of endogenous growth imply an empirically-refuted scale effect. This scale effect and assumptions to negate the scale effect both imply unintentional spatial consequences. A review of the broad economic geography literature reveals the widespread use and misuse of first generation and semi-endogenous growth techniques despite these distortions. Techniques are suggested for avoiding these unintended spatial consequences. Crucially, the scale-neutral Schumpeterian branch of endogenous growth theory enables research in economic geography to focus on the distinctly spatial mechanisms that define the spatial economy.
    Keywords: endogenous growth, scale effects, increasing returns, innovation, economic geography
    JEL: E10 L16 O41
    Date: 2019–11
  4. By: Giuseppe Albanese (Bank of Italy); Guido de Blasio (Bank of Italy); Andrea Locatelli (Bank of Italy)
    Abstract: Total Factor Productivity (TFP) explains most of the differences in income levels between territories. A major policy issue is whether place-based policies are capable of promoting TFP growth in backward areas. We provide some evidence of the effect of the European Regional Development Fund (ERDF) on local TFP growth in Southern Italy. Although TFP growth is on average rather unresponsive to EU programs, we provide some evidence of a positive effect for ERDF infrastructure investments and for areas with higher institutional quality and population density.
    Keywords: ERDF programs, TFP, manufacturing firms
    JEL: R58 O47 D24
    Date: 2019–12
  5. By: Andrés Rodríguez-Pose; Roberto Ganau
    Abstract: Europe has witnessed a considerable labour productivity slowdown in recent decades. Many potential explanations have been put forward to try to address this so-called productivity ‘puzzle’. However, how the quality of local institutions influences labour productivity in different parts of Europe has been, so far, overlooked by the literature. This paper addresses this gap in our knowledge by evaluating how the quality of local institutions affects changes in labour productivity at a regional level, across 248 European regions during the period between 2003 and 2015. The results indicate that institutional quality plays a crucial role in determining different regional labour productivity trajectories. This role is both direct – as improvements in institutional quality have a substantial impact on productivity growth – as well as indirect – as the returns of investments in human capital and local innovative capacity rise significantly as the quality of government increases.
    JEL: E24 J24 O47 R11
    Date: 2019–10
  6. By: Stanislav Avdeev (National Research University Higher School of Economics)
    Abstract: Geographical distance has become less relevant in co-authorship for monodisciplinary research fields such as economics, mathematics, physics. Multidisciplinary fields are influenced by the norms and traditions of other fields. Higher education is a multidisciplinary field of research in which multiple communities operate under different norms and paradigms. We study collaboration patterns in higher education research across different world regions using the Scopus database with the application of the gravity model. Our results show that international collaboration has intensified and increased rapidly in the last two decades. We confirm that the intensity of collaboration is dependent on geographical distance and linguistic commonality. The importance of geographical proximity differs significantly between various world regions. EU scholars appear to give preference to linguistic proximate partners over geographical neighbors. Despite the fact that English is the lingua franca in science, language is not a significant factor for the formation of collaboration for North American researchers. This study contributes to the current discussion on the importance of international collaboration in science, paying special attention to the growing public interest in multidisciplinary research.
    Keywords: gravity model, higher education, international collaboration, multidisciplinarity, spatial scientometrics
    JEL: C21 I23 N30
    Date: 2019
  7. By: Luisa Dörr; Florian Dorn; Stefanie Gäbler; Niklas Potrafke
    Abstract: We examine how new airport infrastructure influences regional tourism. Identification is based on the conversion of a military air base into a regional commercial airport in the German state of Bavaria. The new airport opened in 2007 and promotes travelling to the touristic region Allgäu in the Bavarian Alps. We use a synthetic control approach and show that the new commercial airport increased tourism in the Allgäu region over the period 2008-2016. The positive effect is especially pronounced in the county where the airport is located. Our results suggest that new transportation infrastructure promotes regional economic development.
    Keywords: Airports, tourism, regional development, transportation infrastructure, synthetic control method
    JEL: O18 Z38 L93
    Date: 2019
  8. By: Paolo Emilio Mistrulli (Bank of Italy); Luca Antelmo (Bank of Italy); Maddalena Galardo (Bank of Italy); Iconio Garrì (Bank of Italy); Dario Pellegrino (Bank of Italy); Davide Revelli (Bank of Italy); Vito Savino (Bank of Italy)
    Abstract: In the aftermath of the Great Recession, the number of bank branches declined in most of developed countries. In this paper, we investigate how banks have downsized their branch networks in Italy, by comparing the pre and post crisis spatial distribution of branches. By using a detailed dataset that includes a wide set of controls for the characteristics of each bank branch, we estimate the probability of a branch being closed as a function of its distance from both proprietary and competitors’ branches. We find that banks are more prone to close branches in those areas where other proprietary branches are closer and also where competitors’ branches are closer. This indicates that, since the start of the crisis, banks have closed branches especially in those areas where their proprietary network was relatively more populated and competition was fiercer.
    Keywords: Bank Branch, Geographical Location, Market Structure
    JEL: G21 L10 R3
    Date: 2019–12
  9. By: Loren Brandt; Gueorgui Kambourov; Kjetil Storesletten
    Abstract: Labor productivity in manufacturing differs starkly across regions in China. We document that productivity, wages, and start-up rates of non-state firms have nevertheless experienced rapid regional convergence after 1995. To analyze these patterns, we construct a Hopenhayn (1992) model that incorporates location-specific capital wedges, output wedges, and entry barriers. Using Chinese Industry Census data we estimate these wedges and examine their role in explaining differences in performance and growth across prefectures. Entry barriers explain most of the differences. We investigate the empirical covariates of these entry barriers and find that barriers are causally related to the size of the state sector
    Keywords: Chinese economic growth; SOEs; firm entry; entry barriers; capital wedges; output wedges; SOE reform.
    JEL: O11 O14 O16 O40 O53 P25 R13 D22 D24 E24
    Date: 2020–01–05
  10. By: Frédéric Dobruszkes
    Abstract: Scholars and experts in air transport generally assume the distance flown between airports is the shortest route (also known as the great-circle distance or the orthodromic route). Howev-er, in the real world, planes follow longer itineraries. This paper reviews the factors of de-tours, based on interviews with pilots and experts in air navigation. Factors relate to (1) technical constraints, (2) natural processes (including meteorological conditions) and obsta-cles, (3) geopolitical factors and (4) social factors, which are all explored in this paper. Their temporary vs. permanent and spatial impact (small vs. long detours) varies signifi-cantly among factors and among cases, as well as their avoidable nature. Appropriate poli-cies could lower detours. In addition, these results echo academic debates on the meaning of distance.
    Keywords: Air transport geography; Airline routes; Detours; Distance flown; Great-circle distance
    Date: 2019–07–31
  11. By: Dieter Pennerstorfer; Biliana Yontcheva (WU Wien)
    Abstract: This article presents a novel method of market delineation, which generates virtually isolated residential clusters using data on the spatial distribution of population. The performance of this approach is evaluated by contrasting it with traditional delineation techniques based on municipal boundaries. The estimation of simple entry models for five industries shows that markets defined using micro-level residence information perform better in terms of reducing cross-border spatial spillovers and predicting the equilibrium number of firms on the market more accurately. Additionally, the estimated entry threshold ratios using this method successfully reflect our expectations based on ex-ante knowledge about the investigated industries.
    Keywords: market definition, entry models, spatial competition
    JEL: L13 L11 R32
    Date: 2019–10
  12. By: Wheeler, Andrew Palmer (University of Texas at Dallas); Gerell, Manne; Yoo, Youngmin
    Abstract: We assess the positional accuracy of address based geocoding of shooting incidents relative to the location recorded via acoustic gun-shot detection technology. This provides a test of the accuracy of typical address based geocoding methods used in crime analysis, as well as provides evidence for how much accuracy one gains when using sensors. Examining over 1,000 shooting incidents in Wilmington, North Carolina, we find that the majority of address-based incidents are quite accurate, on average within 60 feet of the actual location (using a street centerline geocoder), or within 90 feet (using Google rooftop geocoding). However, based on the incident narrative we identify a subset of transcription errors in over 10% of the cases that increases the distance between the true shooting location and that geocoded using address data. This suggests mechanisms to prevent human errors may be more frugal than those relying on sensors in geocoding shooting incidents. Data to replicate the analysis can be downloaded from lw/AABdQBnjKGdO3GUxWM0ZMd3Ya?dl=0.
    Date: 2019–04–19
  13. By: Mauricio Rodrigo Talassino and Marcos Herrera (CONICET-IELDE/UNSa)
    Abstract: This paper analyzes different convergence models for Argentina using spatial econometrics tools. The spatial analysis allows the results to be broken down between direct effects, net of spatial dependence, and indirect effects, caused by contagion between regions. Our research detects that the lack of convergence in the results is a product of spatial contagion, canceling the effect of net convergence. This result provides clues about the causes of non-convergence detected in similar investigations, highlighting the importance of spatial interactions in convergence models and in the design of regional economic policies, beyond those designed at the local and / or provincial level. The research includes an analysis of the process of spatial diffusion before regional shocks for the whole country.
    Date: 2019–12

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