nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒05‒25
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. On the Productivity Advantage of Cities By Nick Jacob; Giordano Mion
  2. Economic Effects of Regional Energy System Transformations: An Application to the Bavarian Oberland Region By Ana Maria Montoya Gómez; Marie-Theres von Schickfus; Markus Zimmer
  3. Cities and biodiversity: Spatial efficiency of land use By Yoshida, Jun; Kono, Tatsuhito
  4. Assessing the 'digital divide' and its regional determinants: Evidence from a web-scraping analysis By Thonipara, Anita; Sternberg, Rolf G.; Proeger, Till; Haefner, Lukas
  5. Covid-19 and regional employment in Europe By Sebastian Doerr; Leonardo Gambacorta
  6. Liquidity, Seasonality, and Distance to Universities: The case of UK rental markets By Okan Yilmaz; Oleksandr Talavera; Joy Jia

  1. By: Nick Jacob; Giordano Mion
    Abstract: Ever since Marshall (1890) agglomeration externalities have been viewed as the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of Total Factor Productivity (TFP), the empirical evidence on agglomeration externalities rests on measures obtained using firm revenue or value-added as a measure of firm output: revenue-based TFP (TFP-R). This paper uses data on French manufacturing firms’ revenue, quantity and prices to estimate TFP and TFP-R and decompose the latter into various elements. Our analysis suggests that the revenue productivity advantage of denser areas is mainly driven by higher prices charged rather than differences in TFP. At the same time, firms in denser areas are able to sell higher quantities, and generate higher revenues, despite higher prices. These and other results we document suggest that firms in denser areas are able to charge higher prices because they sell higher demand/quality products. Finally, while the correlation between firm revenue TFP and firm size is positive in each location, it is also systematically related to density: firms with higher (lower) TFP-R account for a larger (smaller) share of total revenue in denser areas. These patterns thus amplify in aggregate regional-level figures any firm-level differences in productivity across space.
    Keywords: total factor productivity (TFP), density, agglomeration externalities, revenue-based TFP, prices, demand, quality
    JEL: R12 R15 D24 L11
    Date: 2020
  2. By: Ana Maria Montoya Gómez; Marie-Theres von Schickfus; Markus Zimmer
    Abstract: This paper analyzes the effects of different energy transition paths on regional value added and on employment. We extend traditional input-output analysis by taking into account the scarcity of factors of production, and construct a dataset incorporating the regional dimension and specific electricity producing technologies. We find that the three observed districts in the German Oberland region benefit (to varying degrees) from investments towards regional energy transition, both in terms of additional value added and employment. Yet, the positive development comes at the expense of value added and employment in the rest of the country. Moreover, our analysis shows that medium-skilled employment increases most across all scenarios. This finding deserves attention in light of the current shortage of medium-skilled labor in Germany.
    JEL: Q43 R15 C67
    Date: 2020
  3. By: Yoshida, Jun; Kono, Tatsuhito
    Abstract: Biologically important but dangerous wildlife creatures encroach into cities, which causes human-wildlife conflicts. To explore the effect of the encroachment of wildlife into cities on equilibrium land use and its efficiency, we develop an equilibrium theory of land used for humans and wildlife by combining an ecosystem model with urban economics model. Humans choose their housing location and size in response to the risk of encountering wildlife in cities, and animals optimize their food intake by spreading out in response to heterogeneous feeding grounds in both urban areas and natural habitats, which determines the spatial heterogeneous distribution of both agents. We first prove the existence and uniqueness of the spatial equilibrium in a linear city adjacent to natural habitats. Next, our theory provides new insights for the wildlife conservation: (i) this spatial heterogeneity generates inefficient predator-prey interactions, leading to an inefficient steady state population equilibrium of animals; (ii) With the spatial inefficiency, the equilibrium city size is not always too big. We numerically demonstrate how both the equilibrium and the optimal solution are affected by the scale of conflicts and the value of wildlife.
    Keywords: Land use, location-dependent externality, human-wildlife conflicts, biodiversity
    JEL: Q28 R11 R14
    Date: 2020–05–17
  4. By: Thonipara, Anita; Sternberg, Rolf G.; Proeger, Till; Haefner, Lukas
    Abstract: Following the 'death of distance' postulate, digitization may reduce or even eliminate the penalty of firms being located in rural areas compared with those in urban agglomerations. Despite many recent attempts to measure digitization effects across space, there remains a lack of empirical evidence regarding the adoption of digital technologies from an explicit spatial perspective, i.e. comparing urban with rural areas. Using web-scraping data for a representative sample of 345,000 German firms, we analyze the determinants of homepage usage. Accordingly, we show that homepage usage - as a proxy for the degree of digitization of the respective firm - is highly dependent on location, whereby firms in urban areas are more than twice as likely to use webpages than those located in rural areas. Our county-level analysis shows that a high population density, young population, net gains in internal migration, high educational level and high firm-specific revenues have a positive and significant effect on the probability that firms conduct digital marketing using webpages. Access to broadband internet has a positive effect in rural areas. There are no differences between urban, suburban and rural areas in terms of webpage up-todateness as well as social media usage. We conclude that there is a substantial digital divide in online marketing and discuss policy implications.
    Keywords: digital divide,digitization,Germany,rural,Small and Medium-Sized Enterprises,urban,web-scraping
    JEL: D22 L22 L26
    Date: 2020
  5. By: Sebastian Doerr; Leonardo Gambacorta
    Abstract: We construct employment risk indices for European regions that reflect the share of jobs under threat from Covid-19. The risk index is based on local employment in sectors that are more exposed to the pandemic and on the regional incidence of small firms. Employment in regions in southern Europe and France is shown to have high risk indices, while regions in northern Europe have lower risk indices. Eastern and central European regions have intermediate risk indices. Regions with a higher risk index have a bigger jump in Google searches for unemployment-related terms.
    Date: 2020–05–15
  6. By: Okan Yilmaz (Swansea University); Oleksandr Talavera (University of Birmingham); Joy Jia (Swansea University)
    Abstract: This paper explores how liquidity in UK rental markets reacts to variations in demand across time and space. We employ a survival analysis approach with a non-parametric hazard rate to investigate whether the probability of renting changes across calendar months. Our unique dataset comes from and contains 300,198 rental listings in 13 major UK university cities over the 2015-17 period. Our results suggest that the probability of renting is lower during the winter season compared to summer. This could be explained by students' higher housing demand at the start of the academic term. The results become more pronounced when the distance between marketed houses and university campuses is taken into account.
    Keywords: Big data; student housing; seasonality; survival analysis
    JEL: R21 R31 R32
    Date: 2020–05

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