nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒06‒29
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Concentration and Agglomeration of IT Innovation and Entrepreneurship: Evidence from Patenting By Chris Forman; Avi Goldfarb
  2. Plants in Space By Ezra Oberfield; Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Nicholas Trachter
  3. Innovating in Krugman’s Footsteps – Where and How Innovation Differs in Europe: Static Innovation Indicators for Identifying Regional Policy Leverages By Rhoden, Imke
  4. The benefits of remoteness: Digital mobility data, regional road infrastructure, and COVID-19 infections By Krenz, Astrid; Strulik, Holger
  5. Internal Borders and Population Geography in the Unification of Italy By A'Hearn, Brian; Rueda, Valeria
  6. Input-Output Analysis of COVID-19: Methodology for Assessing the Impacts of Lockdown Measures By Amaral Haddad, Eduardo; Salgueiro Perobelli, Fernando; Fernandes de Araújo, Inácio
  7. Spatial spillovers in the pricing of flood risk: Insights from the housing market By Pommeranz, Carolin; Steininger, Bertram

  1. By: Chris Forman; Avi Goldfarb
    Abstract: Information technology (IT) matters to prosperity. The top patenters are increasingly IT companies. We use data on US patents to document four trends in IT patenting. First, firm-level concentration in IT patenting is increasing over time. Second, geographic concentration in IT patenting is increasing over time. Third, most technology classes experienced a decline in new patenters from 1980 to 2000. This was not true of new IT patents. Since 2000, the trend in new IT patenters looks like other classes and is declining over time. Fourth, there is increased geographic concentration of new IT patenters. We do not identify the reasons behind these trends nor whether they are related to overall changes in industry concentration, agglomeration, or prosperity.
    JEL: L22 L26 M13 M15 O31 O32 O33 O34 R12
    Date: 2020–06
  2. By: Ezra Oberfield; Esteban Rossi-Hansberg; Pierre-Daniel Sarte; Nicholas Trachter
    Abstract: We study the number, size, and location of a firm's plants. The firm's decision balances the benefit of delivering goods and services to customers using multiple plants with the cost of setting up and managing these plants, and the potential for cannibalization that arises as their number increases. Modeling the decisions of heterogeneous firms in an economy with a vast number of widely distinct locations is complex because it involves a large combinatorial problem. Using insights from discrete geometry, we study a tractable limit case of this problem in which these forces operate at a local level. Our analysis delivers clear predictions on sorting across space. Productive firms place more plants in dense locations that exhibit high rents compared with less productive firms, and place fewer plants in markets with low density and low rents. Controlling for the number of plants, productive firms also operate larger plants than those operated by less productive firms in locations where both are present. We present evidence consistent with these and several other predictions using U.S. establishment-level panel data.
    JEL: D24 L25 R3
    Date: 2020–06
  3. By: Rhoden, Imke
    Abstract: This paper introduces two indicators for innovation, showing the allocation of innovation and its inherent diversity. Both indicators can give insights for regional innovation policy conception. The first indicator measures the share of patents in research and development expenditure, proposing a locational innovation output indicator. It can show that innovation in Europe differs strongly among NUTS2-level regions, which points to regionally specific, place-based policies as a result of a strong dispersion in European innovation activity. The second measure, the innovation diversity indicator, shows the diversification of innovation in a region and is built upon Krugman’s locational Gini coefficients. Here, the share of patents belonging to a particular IPC class is related to the dispersion of all patents in a region. Possible implications for policy are the construction of place-based, technology-specific programs, on either national or subnational (NUTS2-) level, where each country or region has to be considered carefully. Analyses underline that innovation in Europe is a highly regionally and technically diversified concept.
    Keywords: Innovation Indicator,Innovation Gini,Regional Dispersion,Research and Development Allocation,Patent Data
    JEL: R12 O33 O38
    Date: 2020
  4. By: Krenz, Astrid; Strulik, Holger
    Abstract: We investigate the regional distribution of the COVID-19 outbreak in Germany. We use a novel digital mobility dataset, that traces the undertaken trips on Easter Sunday 2020 and instrument them with regional accessibility as measured by the regional road infrastructure of Germany's 401 NUTS III regions. We identify a robust negative association between the number of infected cases per capita and accessibility by road infrastructure, measured by the average travel time to the next major urban center. What has been a hinderance for economic performance in good economic times, appears to be a benevolent factor in the COVID-19 pandemic: bad road infrastructure. Using road infrastructure as an instrument for mobility reductions we assess the causal effect of mobility reduction on infections. The study shows that keeping mobility of people low is a main factor to reduce infections. Aggregating over all regions, our results suggest that there would have been about 63,000 infections less on May 5th, 2020, if mobility at the onset of the disease were 10 percent lower.
    Keywords: Digital technology,Mobility data,Regional road infrastructure,Germany,COVID-19
    JEL: R11 R12 I18
    Date: 2020
  5. By: A'Hearn, Brian; Rueda, Valeria
    Abstract: We examine the economic impact of Italian unification from a micro-geographical perspective, asking whether the abolition of internal borders caused a redistribution of economic activity towards the former border zones, which now enjoyed improved market access. We construct a new geocoded dataset of municipal (comune) populations from the pre-unification period through to 1871. Using a difference-in-differences approach and controlling for a variety of geographic correlates including elevation and distances to ports, railway lines, and large cities, we find robust evidence of a relative acceleration in population growth â?? our proxy for economic activity â?? in comuni near the former internal borders, consistent with our market access hypothesis.
    Keywords: 19th century; Border effects; economic history; economic integration; Italy; Political Unification; spatial inequality
    JEL: J6 N33 N93 R12 R23
    Date: 2020–04
  6. By: Amaral Haddad, Eduardo (NEREUS); Salgueiro Perobelli, Fernando (Universidade Federal de Juiz de Fora); Fernandes de Araújo, Inácio (NEREUS)
    Abstract: This technical note describes in details the methodology developed for assessing the daily economic costs of control strategies for mitigating the effects of COVID-19. It is based on the partial hypothetical extraction approach to input-output systems. This methodology is being currently applied to inform regional and national governments in Brazil and Colombia on the potential regional and sectoral economic costs of different strategies of lockdown measures. Simulated scenarios based on different durations and intensities of the control measures are also being used to help designing sectoral and territorial-based policies to ease lockdown against the coronavirus outbreak after reaching a downward trend in the growth rate of new infections.
    Keywords: COVID-19; Economic impacts; Input-output analysis; Lockdown
    JEL: C67 D24 R15
    Date: 2020–03
  7. By: Pommeranz, Carolin (RWTH Aachen University); Steininger, Bertram (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: In this study, we analyse how, and to what extent, direct and indirect effects (spatial spillovers) matter when estimating price effects for a property located in a flood zone. Unlike the previous literature, we show the importance of indirect effects resulting from a neighbourhood being situated in a flood zone. Additionally, the types of indirect effects (global vs. local) need to be determined theoretically or empirically using an appropriate spatial model comparison approach. Using the Bayesian model comparison for data related to the flood-prone city of Dresden, Germany, we find strong evidence for a spatial Durbin error model which controls for local spillover effects. These indirect price effects amount to -6.5% for houses and -4.8% for condominiums. However, direct effects diminish when controlling for spatial spillovers. Our results are generally robust across different model specifications, urban areas, and risk-adjusted prices that include future insurance costs, thus providing evidence of the importance of addressing indirect effects in the form of local spillovers in the analysis of flood zone effects. Ignoring indirect flood effects when formulating policy can lead to flood management that is inefficient and not cost-effective, as the economic consequences of flood are underestimated.
    Keywords: spatial econometrics; spatial spillovers; indirect effects; flood hazards; housing market
    JEL: G22 Q51 Q54
    Date: 2020–06–11

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