nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒01‒27
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Big Data, artificial intelligence and the geography of entrepreneurship in the United States By Obschonka, Martin; Lee, Neil; Rodríguez-Pose, Andrés; Eichstaedt, johannes Christopher; Ebert, Tobias
  2. Migration and the Location of MNEs Activities. Evidence from Italian Provinces By Luigi Benfratello; Davide Castellani; Anna D’Ambrosio
  3. Knowledge Complementarities and Patenting: Do New Universities of Applied Sciences Foster Regional Innovation? By Patrick Lehnert; Curdin Pfister; Dietmar Harhoff; Uschi Backes-Gellner
  4. Nowcasting East German GDP growth: A MIDAS approach By Claudio, João C.; Heinisch, Katja; Holtemöller, Oliver
  5. Hub-Periphery Development Pattern and Inclusive Growth: Case Study of Guangdong Province By Xubei Luo; Nong Zhu
  6. Spatial Distribution of Supply and the Role of Market Thickness: Theory and Evidence from Ride Sharing By Soheil Ghili; Vineet Kumar
  7. Break and sustain bifurcations of S_N-invariant equidistant economy By Aizawa, Hiroki; Ikeda, Kiyohiro; Osawa, Minoru; José M, Gasper

  1. By: Obschonka, Martin; Lee, Neil; Rodríguez-Pose, Andrés; Eichstaedt, johannes Christopher; Ebert, Tobias
    Abstract: There is increasing interest in the potential of artificial intelligence and Big Data (e.g., generated via social media) to help understand economic outcomes and processes. But can artificial intelligence models, solely based on publicly available Big Data (e.g., language patterns left on social media), reliably identify geographical differences in entrepreneurial personality/culture that are associated with entrepreneurial activity? Using a machine learning model processing 1.5 billion tweets by 5.25 million users, we estimate the Big Five personality traits and an entrepreneurial personality profile for 1,772 U.S. counties. We find that these Twitter-based personality estimates show substantial relationships to county-level entrepreneurship activity, accounting for 20% (entrepreneurial personality profile) and 32% (all Big Five trait as separate predictors in one model) of the variance in local entrepreneurship and are robust to the introduction in the model of conventional economic factors that affect entrepreneurship. We conclude that artificial intelligence methods, analysing publically available social media data, are indeed able to detect entrepreneurial patterns, by measuring territorial differences in entrepreneurial personality/culture that are valid markers of actual entrepreneurial behaviour. More importantly, such social media datasets and artificial intelligence methods are able to deliver similar (or even better) results than studies based on millions of personality tests (self-report studies). Our findings have a wide range of implications for research and practice concerned with entrepreneurial regions and eco-systems, and regional economic outcomes interacting with local culture.
    Date: 2018–05–24
  2. By: Luigi Benfratello (Politecnico di Torino and CSEF); Davide Castellani (Henley Business School, University of Reading); Anna D’Ambrosio (Politecnico di Torino)
    Abstract: This paper investigates the link between migration and inward FDI in narrow geographies. Our results, based on 1,147 greenfield investment projects made by 895 MNEs into Italian provinces (NUTS3) over the 2003-2015 period, confirm a positive effect of the stock of immigrants on FDI, but no robust effects of emigrants. However, beyond this average effect lies significant heterogeneity. By unraveling this heterogeneity, we shed light on the potential mechanisms underlying this relation. Our results are consistent with an important role of demand and information channels, but not with an effect through the labour market. On the one hand, immigrants are not a factor that attracts more labour-intensive investments. On the other hand, the effect of immigrants is stronger when information and, to a lesser extent, market demand are more important. Overall, our paper bears significant implications for local development policy that partially contrast with the current public discourse on immigration.
    Keywords: Foreign Direct Investment, Migration, Location Choice, Information Effect, Demand Effect, Conditional Logit, Mixed Logit
    JEL: F22 F21 R30
    Date: 2019–12
  3. By: Patrick Lehnert; Curdin Pfister; Dietmar Harhoff; Uschi Backes-Gellner
    Abstract: This study analyzes how universities of applied sciences (UASs) - bachelor-granting three-year colleges teaching and conducting applied research - affect regional innovation. We particularly focus on regional complementarities between such applied research institutions and basic ones. We exploit variation in the location and timing of UAS establishments in Germany. To account for endogeneity, we apply fixed effects estimations and control for regional economic activity by implementing a proxy based on 30 years of satellite data. We find that UASs increase innovation with a substantially larger effect in regions where other (basic and applied) public research organizations coexist. This result indicates strong knowledge complementarities. In an additional analysis, we also find that UASs accelerate innovation in the regions belonging to the former German Democratic Republic.
    JEL: I23 O31 O38 R11
    Date: 2020–01
  4. By: Claudio, João C.; Heinisch, Katja; Holtemöller, Oliver
    Abstract: Economic forecasts are an important element of rational economic policy both on the federal and on the local or regional level. Solid budgetary plans for government expenditures and revenues rely on efficient macroeconomic projections. However, official data on quarterly regional GDP in Germany are not available, and hence, regional GDP forecasts do not play an important role in public budget planning. We provide a new quarterly time series for East German GDP and develop a forecasting approach for East German GDP that takes data availability in real time and regional economic indicators into account. Overall, we find that mixed-data sampling model forecasts for East German GDP in combination with model averaging outperform regional forecast models that only rely on aggregate national information.
    Keywords: business surveys,East Germany,MIDAS model,nowcasting
    JEL: C22 C52 C53 E37 R11
    Date: 2019
  5. By: Xubei Luo; Nong Zhu
    Abstract: The hub-periphery development pattern of the Guangdong economy, to some extent, is a miniature of that of the Chinese economy. The Pearl River Delta, drawing from its first-nature comparative advantages in factor endowments and proximity to Hong Kong SAR, China, and Macau SAR, China, and the second-nature advantages as first-movers in the reforms in attracting and retaining domestic and foreign resources, has developed into a regional economic center. This paper examines the pattern of inter- and intra-provincial migration and that of the concentration of production, to explore the challenges and opportunities for the success of “double transfer.” The paper suggests a four-prong approach, to improve the business environment, support the realization of latent comparative advantages, increase the skill level of the labor force to support the upgrade of the production structure, and protect the vulnerable, to support the inclusive growth of the economy in Guangdong in a sustainable manner.
    Keywords: Migration,China,
    JEL: J61 O11 R12
    Date: 2019–12–21
  6. By: Soheil Ghili (Cowles Foundation & School of Management, Yale University); Vineet Kumar (School of Management, Yale University)
    Abstract: This paper develops a strategy with simple implementation and limited data requirements to identify spatial distortion of supply from demand -or, equivalently, unequal access to supply among regions- in transportation markets. We apply our method to ride-level, multi-platform data from New York City (NYC) and show that for smaller rideshare platforms, supply tends to be disproportionately concentrated in more densely populated areas. We also develop a theoretical model to argue that a smaller platform size, all else being equal, distorts the supply of drivers toward more densely populated areas due to network effects. Motivated by this, we estimate a minimum required platform size to avoid geographical supply distortions, which informs the current policy debate in NYC around whether ridesharing platforms should be downsized. We nd the minimum required size to be approximately 3.5M rides/month for NYC, implying that downsizing Lyft or Via-but not Uber{can increase geographical inequity.
    Keywords: Spatial Markets, Transportation, Geographical Inequity, Market Thickness, Ridesharing
    JEL: L13 R41 D62
    Date: 2020–01
  7. By: Aizawa, Hiroki; Ikeda, Kiyohiro; Osawa, Minoru; José M, Gasper
    Abstract: This paper aims at the elucidation of the bifurcation mechanism of an equidistant economy in Economic Geography. An attention is paid to the existence of invariant solutions that retain their spatial patterns when the bifurcation parameter changes. Theoretical results on symmetrybreaking bifurcation of the symmetric group SN, which describes the symmetry of this economy, is combined with the mechanism of sustain bifurcation of invariant patterns that is inherent to the economy. The stability of bifurcating branches is investigated theoretically to demonstrate that most of them are asymptotically unstable. Among a plethora of theoretically possible spatial patterns, those which actually become stable for spatial economic models are investigated numerically. The solution curves of the economy are shown to display a complicated mesh-like structure, which looks like threads of warp and weft.
    Keywords: Bifurcation; equidistant economy; group-theoretic bifurcation theory, invariant pattern, replicator dynamics, spatial economic model, stability
    JEL: R12
    Date: 2019–06–19

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