nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒06‒15
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The geography of COVID-19 and the structure of local economies: the case of Italy By Andrea Ascani; Alessandra Faggian; Sandro Montresor
  2. The spatial extent of network externalities in international migration By Roberto Basile; Francesca Licari
  3. Regional patterns of unrelated technological diversification: the role of academic inventors. By Quatraro, Francesco; Scandura, Alessandra
  4. A Dynamic Theory Of Spatial Externalities By Raouf Boucekkine; Giorgio Fabbri; Salvatore Federico; Fausto Gozzi
  5. Agglomeration economies in Great Britain By Cem Özgüzel
  6. Spatial analysis of financial health of companies By Ilona Berková
  7. Human Development Dynamics across Districts of Indonesia: A Study of Regional Convergence and Spatial Approach By Miranti, Ragdad Cani; Mendez-Guerra, Carlos
  8. House prices and fertility in South Africa: A spatial econometric analysis By Simo-Kengne, Beatrice D.; Bonga-Bonga, Lumengo
  9. Diferencias regionales en el impacto económico del aislamiento preventivo por el COVID-19: estudio de caso para Colombia By Diana Ricciulli-Marín; Jaime Bonet-Morón; Gerson Javier Pérez-Valbuena; Eduardo A. Haddad; Inácio F. Araújo; Fernando S. Perobelli

  1. By: Andrea Ascani (Gran Sasso Science Institute); Alessandra Faggian (Gran Sasso Science Institute); Sandro Montresor (Gran Sasso Science Institute)
    Abstract: The aim of this article is to analyse the sub-national spread of COVID-19 in Italy using an economic geography perspective. The striking spatial unevenness of COVID-19 suggests that the infection hits economic core locations harder, and this raises questions about whether, and how, the sub-national geography of the disease is connected to the local economic base. We provide preliminary evidence consistent with the possibility that the local specialisation in geographically concentrated economic activities acts as a vehicle of disease transmission, thus generating a core-periphery pattern in the spatiality of COVID-19, which might follow the lines of the local economic landscape and the tradability of its outputs.
    Keywords: : COVID-19, local economic structure, geographical concentration, tradability
    JEL: R10 R11 R12
    Date: 2020–04
  2. By: Roberto Basile (Department of Industrial and Information Engineering and Economics. University of L'Aquila); Francesca Licari (Italian National Institute of Statistics (ISTAT))
    Abstract: In this paper, we assess the effect of community networks on the location choice of foreign immigrants in Italy. Our results confirm the existence of strong network externalities, but they also suggest that these effects spill over the borders of local labor markets areas (LLMAs). Significant positive spatial spillovers are indeed evident up to the second-order of contiguity, while a negative (spatial competition) effect emerges at the third-order. A possible channel for the generation of these spatial spillovers is the existence of common markets for unskilled and ethnic-specific jobs.
    Keywords: Community networks, Immigration, Gravity models, Spatial dependence
    JEL: F22 J61 R23 C14 C21
    Date: 2020–05
  3. By: Quatraro, Francesco; Scandura, Alessandra (University of Turin)
    Abstract: This paper investigates the relationship between the involvement of academic inventors in local innovation dynamics and the patterns of regional technological diversification. Based on the combination of the evolutionary economic approach and the theories on regional innovation capabilities, and on the distinctive features of academic inventors, we hypothesise that knowledge spillovers accruing from the participation of university scientists to local patenting activity influence the extent of regional technological diversification. In addition, we posit that the involvement of academic inventors mitigates the path dependency engendered by the constraining role of the existing capabilities. The empirical results highlight the key role of academic institutions for the development of regional technological trajectories while contributing to the academic and policy debate on regional diversification strategies.
    Date: 2020–05
  4. By: Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS, EHESS and Ecole Centrale de Marseille, France. Corresponding member, IRES, UCLouvain, Belgium.); Giorgio Fabbri (Univ. Grenoble Alpes, CNRS, INRA, Grenoble INP, GAEL); Salvatore Federico (Università degli Studi di Siena, Dipartimento di Economia Politica e Statistica); Fausto Gozzi (Dipartimento di Economia e Finanza, LUISS Guido Carli, Roma)
    Abstract: In this paper, we revisit the theory of spatial externalities. In particular, we depart in several respects from the important literature studying the fundamental pollution free riding problem uncovered in the associated empirical works. First, instead of assuming ad hoc pollution diffusion schemes across space, we consider a realistic spatiotemporal law of motion for air and water pollution (diffusion and advection). Second, we tackle spatiotemporal non-cooperative (and cooperative) differential games. Precisely, we consider a circle partitioned into several states where a local authority decides autonomously about its investment, production and depollution strategies over time knowing that investment/production generates pollution, and pollution is transboundary. The time horizon is infinite. Third, we allow for a rich set of geographic heterogeneities across states while the literature assumes identical states. We solve analytically the induced non-cooperative differential game under decentralization and fully characterize the resulting long-term spatial distributions. We further provide with full exploration of the free riding problem, reflected in the so-called border effects. In particular, net pollution flows diffuse at an increasing rate as we approach the borders, with strong asymmetries under advection, and structural breaks show up at the borders. We also build a formal case in which a larger number of states goes with the exacerbation of pollution externalities. Finally, we explore how geographic discrepancies affect the shape of the border effects.
    Keywords: Spatial externalities, environmental federalism, transboundary pollution, differential games in continuous time and space, infinite dimensional optimal control problems
    JEL: Q53 R12 O13 C72 C61 O44
    Date: 2020–05–07
  5. By: Cem Özgüzel
    Abstract: This paper estimates agglomeration economies in Great Britain. The analysis employs a definition of urban areas as functional economic units developed by the OECD in collaboration with the European Union to investigate the size and sources of productivity disparities across urban areas. It uses data from the UK Annual Survey of Hours and Earnings and the UK Labour Force Survey between 2000 and 2018 and a two-step estimation procedure that accounts for bias in the extent of agglomeration economies arising from individual sorting. The results suggest that a 10% increase in employment density of a city in Great Britain, would, on average, increase city productivity by 0.9-1 percent. The analysis also shows the estimated elasticity for employment density remains the same before and after the 2007–08 global financial crisis, not showing any clear structural break between city size and productivity relationship.
    Keywords: Great Britain, local labour markets, spatial wage disparities
    JEL: R12 R23 J31
    Date: 2020–06–08
  6. By: Ilona Berková (Department of Applied Mathematics and Informatics, Faculty of Economics, University of South Bohemia In České Budějovice)
    Abstract: The aim of the paper was to describe the literature overview of companies’ location in the context of the economy and the assessment of companies’ performance. Then there is the introduction of a new statistical methodology for the description of the location of companies because the location of companies is one of the most important factors which ensures the future successful development of a company. The methodology can be applied for the evaluation of companies’ location and could answer the question of where it is better to place a new company. To tackle the location of companies, the local population and the health of companies was taken into account. The methodology is based on a point process. Since the population is unevenly distributed and companies choose their locations according to the size of the local population, it was not possible to use homogeneous models and thus the local scaling principals were used for modeling the inhomogeneity. For the evaluation of the health of companies, Neumeiers’ indices were taken into account.
    Keywords: Location theories, Clustering, Health of companies, Local scaling, L-function, Global envelope test
    JEL: C21 O18 R12
    Date: 2020–05
  7. By: Miranti, Ragdad Cani; Mendez-Guerra, Carlos
    Abstract: Indonesia is an archipelago country which comprises of two main parts, western and eastern regions and spread into over 500 districts. Each district has their own characteristics, especially in development aspect. Some districts have been growing faster on economic and social development, yet others still fall behind. Using Human Development Index and its components on education, health and economic variables over 2010- 2018 period, this study aims to examine convergence on the regional human growth process and investigate the speed of convergence across districts. The result reveals convergence occurred on human development process and its determinants across districts during 2010-2018. Education variables are assumed as the main contributor for boosting the speed of convergence of human development. Spatial dependences are detected among districts, followed by the spatial clusters and spatial outliers through global and local spatial autocorrelation. Applying two spatial autoregressive models, spatial autoregressive lag model (SAR) and spatial autoregressive error model (SEM), confirmed that there is significant spatial spill-overs.The speed of convergence for all variables are much declining after the inclusion of spatial lag and error model. As the policy implication, since regional inequality in term of human development is still a major issue, it will be a call for better coordination and cooperation within and between regions.
    Keywords: Indonesia, human development, convergence, spatial approach, district
    JEL: O15
    Date: 2020–04
  8. By: Simo-Kengne, Beatrice D.; Bonga-Bonga, Lumengo
    Abstract: In this paper, the effect of house prices on fertility is analysed across South African provinces using spatial Durbin model. This approach assumes spatial linkages through both endogenous and exogenous variables while allowing the total housing effect on fertility to be decomposed into direct and indirect effects. Empirical results using provincial annual data from 1998 to 2015 indicate that housing market plays an important role in the fertility decision besides female job participation and labour market condition. Particularly, an increase in regional house prices results in a decrease in local and subsequently national fertility rate. However, the spillover effect to adjacent provinces appears to be positive and significant, except in the small housing segment; suggesting that an increase in regional house prices will spur fertility in other regions. Intuitively, house price inflation in a province makes housing relatively affordable in adjacent regions; housing affordability being an important driver of fertility. Alternatively, this positive effect might also capture the income effect felt by homeowners following a rise in house prices, which might in turn be favourable to fertility due to financial edge. The insignificant indirect effect from the small housing segment might reflect the fact that small houses are less likely to be the family residential choice. These findings confirm the importance of spatiotemporal economic behavior in shaping regional fertility in South Africa.
    Keywords: House prices, fertility, spatial panel
    JEL: C23 J13 R31
    Date: 2020–05–21
  9. By: Diana Ricciulli-Marín; Jaime Bonet-Morón; Gerson Javier Pérez-Valbuena; Eduardo A. Haddad; Inácio F. Araújo; Fernando S. Perobelli
    Abstract: Este documento analiza las diferencias regionales en el impacto económico de las medidas de aislamiento ordenadas para evitar la propagación del COVID-19 en Colombia. A través de un modelo insumo-producto, se estiman las pérdidas económicas que resultan de extraer un grupo de empleados formales e informales de los distintos sectores y entidades territoriales del país. Los resultados señalan diferencias regionales en el impacto del confinamiento sobre el mercado laboral, las economías locales y sus sectores productivos. Se encuentra que las regiones periféricas (Amazonía, Caribe, Pacífica y Llanos y Orinoquia) concentran un mayor número de informales en el grupo de ocupados en aislamiento que las regiones centrales (Eje Cafetero y Antioquia, y Central). Por su parte, las pérdidas económicas oscilan desde 5,4% del PIB para la región Amazonía hasta 6,3% en el Eje Cafetero y Antioquia. Además, mientras que el sector servicios concentra las mayores pérdidas en las regiones Eje Cafetero y Antioquia, Central, Caribe, y Pacífica, en la Amazonía y la región Llanos y Orinoquía, las actividades más afectadas pertenecen al sector agropecuario y minero. **** ABTRACT: This paper analyzes the regional economic differences on the impact of lockdown measures ordered by Colombia's national government to prevent the spread of COVID-19. Using an input-output model, we estimate the regional economic losses of extracting a group of formal and informal workers from different sectors of the economy. Results show regional differences in the impact of lockdown on labor markets, local economies, and its productive sectors. We find that peripheral regions (Amazonía, Caribe, Pacífica, and Llanos and Orinoquia) concentrate a higher number of informal workers in the group of employees in lockdown than the central regions (Eje Cafetero and Antioquia, and Central). Regarding economic impact, losses range between 5,4% of GDP for the region Amazonía to 6,3% for Eje Cafetero and Antioquia. Moreover, while the sector of services concentrates the highest losses in the regions Eje Cafetero and Antioquia, Central, Caribe, and Pacífica, in Amazonía, and Llanos and Orinoquia, the economic activities mostly affected belong to mining and agriculture.
    Keywords: COVID-19, matriz insumo-producto interregional, desarrollo regional, COVID-19, inter-regional input-output matrix, regional development
    JEL: R12 R15 R58
    Date: 2020–06–08

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