nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒03‒23
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Industrial Specialization or Diversity? How High-Speed Rail Fosters Japan’s Regional Agglomeration Economy By Wetwitoo, Jetpan
  2. Growing a Developing City : A Computable Spatial General Equilibrium Model Applied to Dhaka By Bird,Julia Helen; Venables,Anthony J.
  3. Effects of cluster policies on regional innovation networks: Evidence from France By Konan Alain N'ghauran; Corinne Autant-Bernard
  4. Spatial Wage Gaps in Frictional Labor Markets By Sebastian Heise; Tommaso Porzio
  5. The regional effects of Germany’s national minimum wage By Ahlfeldt, Gabriel M.; Roth, Duncan; Seidel, Tobias
  6. Natural Disasters, Firm Survival and Growth: Evidence from the Ise Bay Typhoon, Japan By Toshihiro Okubo; Eric Strobl
  7. Migration and Urbanization in Post-Apartheid South Africa By Bakker,Jan David; Parsons,Christopher Robert; Rauch,Ferdinand Gordian

  1. By: Wetwitoo, Jetpan (Asian Development Bank Institute)
    Abstract: We investigate the relationship between high-speed rail (HSR) and agglomeration economy in the scope of specialization and diversity to answer two questions: first, to determine whether specialization or diversity promotes economic productivity, and second, to determine whether HSR promotes specialization or diversity. Specialization/diversity agglomeration index based on the coefficient of variation of localization agglomeration is proposed to measure city’s specialization and diversity. Our analysis utilizes data of agglomeration across 17 industrial sectors in Japanese municipality level. Depending on the definition of agglomeration diversity, one of the results reveals a U-curve relationship as productivity is plotted in Y-axis and specialization agglomeration in X-axis. In other words, both specialization and diversity benefit to economic productivity. Yet, a city which is not specialized and not with a high level of industrial diversity will be the loser in the economy. For the second question, based on the assumption of a quadratic function, HSR could affect city’s specialization and diversity based on the distance to HSR service. From the results, HSR promotes industrial diversity in the city with HSR service, and the city located around 540 km away from HSR service, while HSR promotes city’s specialization in the city located around 270 km away from HSR service.
    Keywords: agglomeration economy; diversity; economic productivity; high-speed rail; specialization
    JEL: R11 R30 R40
    Date: 2019–05–17
  2. By: Bird,Julia Helen; Venables,Anthony J.
    Abstract: As one of world's fastest growing cities, Dhaka faces acute challenges in housing its growing population and developing a more productive economy. Central to this is the scarcity of high-quality urban land. Yet a vast tract of land near the heart of the city, East Dhaka, currently remains predominantly agricultural and undeveloped as a consequence of flooding. This paper uses a computable spatial general equilibrium model that captures the economic geography of the city, to estimate the economic returns of coordinated action to develop this land. The model captures different productive sectors, household skill levels, and types of housing. Firms and residents choose their location within the city given the transport network and land availability, generating a pattern of commercial and residential land-use. The paper estimates the incremental impacts on income, employment and population of an embankment and other flood protection measures to protect this land, as well as from improvement in transport infrastructure and targeted support for economic development in East Dhaka.
    Keywords: Transport Services,Urban Housing and Land Settlements,Urban Housing,Municipal Management and Reform,Urban Governance and Management,Pulp&Paper Industry,Plastics&Rubber Industry,General Manufacturing,Textiles, Apparel&Leather Industry,Construction Industry,Business Cycles and Stabilization Policies,Food&Beverage Industry,Common Carriers Industry,Labor Markets
    Date: 2019–03–01
  3. By: Konan Alain N'ghauran (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Corinne Autant-Bernard (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Despite the growing body of literature evaluating cluster policies, it still remains difficult to establish conclusively their structural effects on regional innovation networks. Focusing on the French cluster policy during the period 2005-2010, this study aims at evaluating how cluster policies influence the structure of local innovation networks following network topologies that may be beneficial for regional innovation. Based on a panel data of four periods and 94 NUTS3 French regions, we estimate spatial Durbin models, allowing us to identify direct, indirect and total effects of cluster policies. The results suggest that cluster policies can result in both positive and negative total effects on the structure of local innovation networks depending on regions' technological specialisation. Beyond the heterogeneous effects, the results also highlight that cluster policies may lead to a regional competition for the strengthening of innovation networks. This finding echoed previous research pointing out the possible 'beggar-thy-neighbour' effects of cluster policies.
    Keywords: Cluster,Regional innovation,Innovation network,Policy evaluation
    Date: 2020
  4. By: Sebastian Heise; Tommaso Porzio
    Abstract: We develop a job ladder model with labor reallocation across firms and regions, and estimate it on matched employer-employee data to study the large and persistent real wage gap between East and West Germany. We find that the wage gap is mostly due to firms paying higher wages per efficiency unit in West Germany and quantify a rich set of frictions preventing worker reallocation across space and across firms. We find that three spatial barriers impede East Germans’ ability to migrate West: migration costs, a preference to live in the East, and fewer job opportunities received from the West. The estimated model highlights that the spatial barriers needed to generate the large wage gap between East and West are small relative to the frictions preventing the reallocation of labor across firms. Therefore, policies that directly promote regional integration lead to smaller aggregate benefits than equally costly hiring subsidies within region.
    Keywords: Labor mobility; Regional integration; Spatial wage gaps
    JEL: J60 O10 R10
    Date: 2019–12–23
  5. By: Ahlfeldt, Gabriel M.; Roth, Duncan; Seidel, Tobias
    Abstract: We show that the minimum wage introduced in Germany in 2015 led to spatial wage convergence, in particular in the left tail of the distribution, without reducing relative employment in low-wage regions within the first two years.
    Keywords: difference-in differences; employment; Germany; minimum wage
    JEL: J31 J58 R12
    Date: 2018–09–08
  6. By: Toshihiro Okubo (Faculty of Economics, Keio University); Eric Strobl (Department of Economics, Bern University)
    Abstract: This paper investigates the damage impact of the 1959 Ise Bay Typhoon-the most destructive storm in Japanese history-on firm performance in Nagoya City. To this end, we combine firm-level data with a locally derived damage index measured in terms of the duration of storm surge-induced flooding. We find heterogeneous impacts of flood damage across firms and sectors. More specifically, older manufacturing firms tend to survive and, conditional on survival, longer time inundation moderated their employment and sales growth, but also promoted capital growth, suggesting investment in new machinery and facilities. In contrast, employment growth increased in the construction sector to satisfy the construction demand for rebuilding after the supertyphoon.
    Keywords: Typhoon, Flood, Firm survival, Firm growth, Nagoya city
    JEL: Q54 R10 R12 R14 D22 L25
    Date: 2020–02–25
  7. By: Bakker,Jan David; Parsons,Christopher Robert; Rauch,Ferdinand Gordian
    Abstract: Although Africa has experienced rapid urbanization in recent decades, we know little about the process of urbanization across the continent. The paper exploits a natural experiment, the abolition of South African pass laws, to explore how exogenous population shocks affect the spatial distribution of economic activity. Under apartheid, black South Africans were severely restricted in their choice of location and many were forced to live in homelands. Following the abolition of apartheid they were free to migrate. Given a migration cost in distance, a town nearer to the homelands will receive a larger inflow of people than a more distant town following the removal of mobility restrictions. Drawing upon this exogenous variation, the authors study the effect of migration on urbanization in South Africa. While they find that on average there is no endogenous adjustment of population location to a positive population shock, there is heterogeneity in these results. Cities that start off larger do grow endogenously in the wake of a migration shock, while rural areas that start off small do not respond in the same way. This heterogeneity indicates that population shocks lead to an increase in urban relative to rural populations. Overall, the evidence suggests that exogenous migration shocks can foster urbanization in the medium run.
    Keywords: Employment and Unemployment,Armed Conflict,Construction Industry,Common Carriers Industry,Food&Beverage Industry,Plastics&Rubber Industry,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Business Cycles and Stabilization Policies,General Manufacturing,Skills Development and Labor Force Training
    Date: 2019–03–05

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