nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒03‒30
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Income Sorting Across Space: The Role of Amenities and Commuting Costs By Gaigne, Carl; Koster, Hans R.A.; Moizeau, Fabien; Thisse, Jacques-François
  2. Optimal Taxation under Regional Inequality By Sebastian G. Kessing; Vilen Lipatov; J. Malte Zoubek
  3. Tertiary Education Expansion and Regional Firm Development By Tobias Schlegel; Curdin Pfister; Uschi Backes-Gellner
  4. Urbanization and its Discontents By Edward L. Glaeser
  5. Spill over or Spill out? - A multilevel analysis of the cluster and firm performance relationship By Nils Grashof
  6. Putting the watering can away Towards a targeted (problem-oriented) cluster policy framework By Grashof, Nils
  7. Spatio-Temporal Dynamics of Urban Growth in Latin American Cities : An Analysis Using Nighttime Lights Imagery By Duque,Juan Carlos; Lozano Gracia,Nancy; Patino,Jorge E.; Restrepo Cadavid,Paula; Velasquez,Wilson A.
  8. Urban Agglomerations and Employment Transitions in Ethiopia By Kamei,Akito; Nakamura,Shohei
  9. The Link between Regional Temperature and Regional Income: Econometric Evidence with Sub-National Data By Christina Greßer; Daniel Meierrieks; David Stadelmann
  10. Towards a multidimensional approach to the study of territorial attractiveness By Dario Musolino; Stephanie Volget
  11. Regionale Gestaltung von Arbeit: Beschäftigung, Mitbestimmung, Personalaufwand und Ausbildung in den 50 größten Unternehmen in Berlin By Scholz, Robert

  1. By: Gaigne, Carl; Koster, Hans R.A.; Moizeau, Fabien; Thisse, Jacques-François
    Abstract: We study the sorting of skill/income-heterogeneous consumers within and between cities. We allow for non-homothetic preferences and locations that are differentiated by their accessibility to exogenous amenities and distance to employment centers, where production is subject to local externalities. The residential equilibrium is driven by the properties of an amenity-commuting aggregator obtained from the primitives of the model. Using the model’s structure and estimated parameters based on micro-data for the Netherlands, we predict that exogenous amenities are a key driver of spatial sorting. Our general equilibrium counterfactual analysis shows that in the absence of amenities, the GDP increases by 10% because commutes are shorter. However, income segregation rises and 95% of consumers are worse-off.
    Keywords: Community/Rural/Urban Development
    Date: 2020
  2. By: Sebastian G. Kessing (University of Siegen); Vilen Lipatov (Justus Liebig University Giessen); J. Malte Zoubek (University of Siegen)
    Abstract: We study how regional productivity differences and labor mobility shape optimal Mirrleesian tax-transfer schemes. When tax schedules are not allowed to differ across regions, productivity-enhancing inter-regional migration exerts a downward pressure on optimal marginal tax rates. When regionally differentiated taxation is allowed, marginal tax rates in high-(low-)productivity regions should be corrected downwards (upwards) relative to the benchmark without migration. Simulations of the productivity differences between metropolitan and other areas of the US indicate that migration affects the optimal tax-transfer schedule more strongly in the regionally differentiated rather than in the undifferentiated case.
    Keywords: Optimal taxation, place-based redistribution, regional inequality, migration, multidimensional screening, delayed optimal control
    JEL: H11 J45 R12
    Date: 2020
  3. By: Tobias Schlegel; Curdin Pfister; Uschi Backes-Gellner
    Abstract: Previous economic research shows that tertiary education expansions lead to various positive first order effects, such as more patents, higher productivity or newly founded firms. However, less is known on the second order effects of tertiary education expansions, for example, the impact on regional firm development. We evaluate the impact of a tertiary education expansion on regional firm development——as measured by average profits per firm——by using administrative tax data at a geographically disaggregated level (i.e. municipalities). A policy change in Switzerland, leading to a quasi-random establishment of universities of applied sciences (UAS)-bachelor-granting three year-colleges teaching and conducting applied research-thereby serves as our case study. Depending on our regression model, we find that average profits per firm in treated municipalities, i.e., near a UAS, are between 15% to 24% higher than in non-treated municipalities after the establishment of UASs. Analyzing the dynamics of this second order effects shows that profits start to increase significantly three years after the UAS establishment and persist even in the long run.
    Keywords: Higher Education and Research Institution, Innovation, Regional Firm Development
    JEL: I23 I26 O18 O30
    Date: 2020–03
  4. By: Edward L. Glaeser
    Abstract: American cities have experienced a remarkable renaissance over the past 40 years, but in recent years, cities have experienced considerable discontent. Anger about high housing prices and gentrification has led to protests. The urban wage premium appears to have disappeared for less skilled workers. The cities of the developing world are growing particularly rapidly, but in those places, the downsides of density are acute. In this essay, I review the causes of urban discontent and present a unified explanation for this unhappiness. Urban resurgence represents private sector success, and the public sector typically only catches up to urban change with a considerable lag. Moreover, as urban machines have been replaced by governments that are more accountable to empowered residents, urban governments do more to protect insiders and less to enable growth. The power of insiders can be seen in the regulatory limits on new construction and new businesses, the slow pace of school reform and the unwillingness to embrace congestion pricing.
    JEL: H70 R10 R31
    Date: 2020–03
  5. By: Nils Grashof
    Abstract: Regional clusters have become an inseparable component of modern economies. Spurred by the idea that clusters unrestrictedly encourage firm innovativeness, such as in the lighthouse example of Silicon Valley, the cluster approach has particularly gained attention among policy makers who have supported the creation and development of clusters. Nevertheless, due to a lack of holistic consideration of different influencing variables, the scientific results about the effect of clusters on firm innovative performance are highly contradictive. For companies as well as policy makers, it is therefore still difficult to evaluate the concrete consequences of being located in a cluster. Consequently, the aim of this paper is to empirically investigate the conditions and mechanisms through which companies can gain from being located in clusters, focussing thereby in particular on possible knowledge spillovers. Therefore, based on an integration of the theoretical perspectives from the strategic management (e.g. resource-based view) and the economic geography literature (e.g. cluster approach), variables from three different levels of analysis (micro-level, meso-level and macro-level) are considered separately as well as interactively. By analysing a unique multilevel dataset of 11,889 companies in Germany, including 1,391 firms that are located within a cluster, evidence is found that being located in a cluster has indeed a positive impact on firm innovative performance. However, the results also indicate that firms benefit unequally within the cluster environment, depending on the specific firm, cluster and market/industry conditions.
    Keywords: knowledge spillovers, cluster effect, firm performance, multilevelanalysis, innovation
    JEL: C31 L10 L22 O30 R10
    Date: 2020–03
  6. By: Grashof, Nils (University of Bremen)
    Abstract: In view of the undisputed promising effects of regional clusters and spurred by lighthouse examples such as Silicon Valley, cluster policies have been popular in many countries worldwide. However, in recent years the complaints have become louder about the actual economic relevance and efficiency of such regional innovation policies. In particular, the high degree of standardization in the so far applied cluster policies, focusing primarily on collaborative incentives to strengthen the relational density in clusters, have been criticized as being rather ineffective and costly to society. In order to solve this one-size-fits-all problem it has been proposed that cluster policies should instead focus on the concrete conditions and needs within regional clusters. The aim of this paper is to respond this call by considering firm-, cluster- and market-/industry-specific particularities. Based on an extensive systematic literature review and own empirical results about the relationship between clusters and firm’s performance, an overview about relevant conditions is elaborated. Such an overview makes it possible to identify potential problems, e.g. in terms of missing absorptive capacities, which cluster policy can purposeful address. For each identified problem, a potential targeted (problem-oriented) policy intervention is therefore suggested. The corresponding result of this procedure is a policy-framework that offers an increased practical value in terms of bringing forth specific adaptive cluster policies rather than one-size-fits-all policies and thereby contributing to a more sophisticated understanding of the design of cluster policies.
    Keywords: innovation policy; cluster policy; cluster effect; firm performance
    JEL: L52 L53 O25 O38 R10 R10
    Date: 2020–03–23
  7. By: Duque,Juan Carlos; Lozano Gracia,Nancy; Patino,Jorge E.; Restrepo Cadavid,Paula; Velasquez,Wilson A.
    Abstract: The impact of urban form on economic performance and quality of life has been extensively recognized. The studies on urban form have focused in developed countries; only a few cities in developing countries have been studied. This paper utilizes nighttime lights imagery and information on street networks, automatically retrieved from OpenStreetMap, to calculate a series of spatial metrics that capture different aspects of the urban form of 919 Latin American and Caribbean cities. The paper classifies these cities into clusters according to these spatial metrics. It also studies the relationship between the urban form metrics and some factors that can correlate with urban form (topography, size, colony, and economic performance) and performs a spatio-temporal analysis of urban growth from 1996 to 2010. Among the results, the paper highlights the identification of five typologies of cities, the tendency of a group of cities to grow at a steeper slope, some worrying cases of urban growth over protected areas, and a trend toward increasing sprawl in some Latin American and Caribbean cities.
    Keywords: City to City Alliances,Urban Economics,Urban Economic Development,National Urban Development Policies&Strategies,Urban Communities,Regional Urban Development,Transport Services,Labor Markets,Energy and Natural Resources,Coastal and Marine Resources
    Date: 2019–01–15
  8. By: Kamei,Akito; Nakamura,Shohei
    Abstract: Agglomeration boosts economic growth. A vast literature has empirically assessed the effects of agglomeration by estimating the city population elasticity on wages. This conventional approach is not necessarily suitable for analyzing urbanization at the early stage in developing countries, where a majority of urban workers engage in self-employment and/or informal jobs. Focusing on one of the poorest and largest among those countries, this paper sheds light on an aspect of urbanization and agglomeration: the transition in the mode of labor from self-employment/informal jobs to wage employment/formal jobs. Applying the instrumental variable approach to national labor force survey data sets, the analysis underscores several labor market transitions across space in urban Ethiopia. First, the town population size and the share of workers with wageemployment are strongly correlated. The probability of engaging in wage work increases by 4.5 percentage points with a log increase in population size. Second, this relationship is particularly strong among disadvantaged workers, such as the female, young, and/or less educated population. Finally, the study documents higher labor force participation and lower underemployment in larger towns.
    Keywords: Employment and Unemployment,Educational Sciences,Labor Markets,Inequality,Wages, Compensation&Benefits
    Date: 2020–03–13
  9. By: Christina Greßer; Daniel Meierrieks; David Stadelmann
    Abstract: We study the effect of temperature on economic development on the sub-national level, employing cross-sectional data for up to 15,533 sub-national units from two distinct sources. In contrast to the existing cross-country literature on the temperature-income relationship, our setting allows us to exploit sub-national heterogeneity through the inclusion of country fixed effects and mitigate omitted variable bias. We find no negative relationship between regional temperature and four different measures of economic development (per capita GDP, growth of per capita GDP, nightlights and gross cell production). We also test whether temperature is non-linearly related to income (with hotter regions being potentially particularly prone to adverse effects of temperature on income) but find no evidence in favor of such a relationship. Finally, we examine whether the effect of temperature on economic development is especially pronounced in poorer regions (e.g., due to weaker adaptation), but find no robust evidence for this proposition. In sum, our findings suggest that adaptation to temperature differences could be feasible and relevant.
    Keywords: Regional temperature; regional income; sub-national data; non-linearity
    JEL: Q54 Q56 R11
    Date: 2020–03
  10. By: Dario Musolino (Bocconi University - Bocconi University [Milan, Italy], Università della Val d'Aosta); Stephanie Volget (Università della Val d'Aosta)
    Abstract: The attractiveness of regions for firms, investments, tourists, students, workers, talented people, and other categories is a very relevant issue for regional economic development. Its importance is on the increase, due to the increasing relevance of the relationships and flows of investments, people, etc. between countries and regions on the global scale. The growing concern about this question therefore requires a new comprehensive approach to its study that goes beyond partial analytical approaches. The construction of a synthetic indicator that measures the territorial attractiveness multidimensionally is the methodological strategy presented in this work in order to approach this issue from a new point of view (i.e. not only the attractiveness of territories for specific types of flows). This paper discusses these new concerns about territorial attractiveness, presents the methodology chosen for the construction of a synthetic indicator, and presents the results on the basis of the Italian NUTS2 regions. The findings and thematic maps made with this synthetic indicator reveal not only usual, but also new, rather surprising, spatial patterns.
    Keywords: territorial attractiveness,multidimensional approach,synthetic indicator,budget allocation process,participatory process,Italy
    Date: 2020–03–07
  11. By: Scholz, Robert
    Abstract: Die vorliegende Untersuchung veranschaulicht die Bedeutung der 50 größten Unternehmen in Berlin mit Fokus auf ihre Beschäftigungsstrukturen. Haben sie ihren Hauptsitz in Berlin? Gibt es Branchenschwerpunkte? Wer sind die Eignerinnen und Eigner der Firmen? Welche Rolle spielt die Börsennotierung? Welchen finanziellen Impact haben sie durch ihre Personalausgaben? Wie verbreitet ist die Mitbestimmung in diesen Unternehmen? Inwiefern beteiligen sich die Unternehmen an der betrieblichen Ausbildung? Es geht darum einen tiefergehenden deskriptiven Blick auf Firmenebene zu bekommen. Denn wie die Studie zeigt, stehen die größten 50 Unternehmen in Berlin für mehr als jeden sechsten Beschäftigten und für jeden vierten Auszubildenden, insgesamt verausgaben die Unternehmen für Personal etwa halb so viel wie der Berliner Senatshaushalt. Den Unternehmen kommt daher eine enorme regionalwirtschaftliche Rolle zu. Hinsichtlich der Mitbestimmung zeigt sich, dass zwar Betriebsräte allgemein verbreitet sind, allerdings sind nur etwa sieben von zehn Beschäftigten durch Arbeitnehmervertreterinnen und Arbeitnehmervertreter in den Aufsichtsräten der allesamt großen Unternehmen repräsentiert. Immerhin sind fast zwei von fünf Unternehmen im Aufsichtsrat nicht mitbestimmt. Zugleich zeigt die Unter-suchung aber, dass speziell die paritätisch mitbestimmten Unternehmen im Verhältnis zu ihrer Zahl überproportional viele Beschäftigte haben und einen durchschnittlich höheren Personalaufwand verbuchen. Hinzu kommt, dass sich die Unternehmen mit einer starken Verankerung der Mitbe-stimmung besonders intensiv in der betrieblichen Ausbildung engagieren. Das ist besonders relevant, weil ein Großteil der Betriebe nur eine sehr geringe Ausbildungsquote hat.
    Keywords: Unternehmensführung,Arbeitskräfte und Beschäftigung,Größe und Struktur,Ausbildung,Größe und räumliche Verteilung der regionalen Wirtschaftstätigkeit,Corporate Governance,Labor Force and Employment, Size, and Structure,Training,Size and Spatial Distributions of Regional Economic Activity
    JEL: G34 J21 M53 R12
    Date: 2020

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