nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒08‒10
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Industrial pattern and robot adoption in European regions By Massimiliano Nuccio; Marco Guerzoni; Riccardo Cappelli; Aldo Geuna
  2. Innovation catalysts: how multinationals reshape the global geography of innovation By Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
  3. The Spatial Decay of Human Capital Externalities - A Functional Regression Approach with Precise Geo-Referenced Data By Eppelsheimer, Johann; Rust, Christoph
  4. The Role of Technology and Relatedness in Regional Trademark Activity By Kyriakos Drivas; ; Raphaël
  5. Effects of inter-industry and spatial spillovers on regional productivity: Evidence from Spanish panel data By Álvarez, Inmaculada C.; Gude, Alberto; Orea, Luis
  6. Night Lights in Economics: Sources and Uses By John Gibson; Susan Olivia; Geua Boe-Gibson
  7. Better Night Lights Data, For Longer By John Gibson
  8. Local Autonomy and Government Spending Multipliers: Evidence from European Regions By Brueckner, Markus; Pappa, Evi; Valentinyi, Akos
  9. Spatial Effects of Price Regulations and Competition. A Dynamic Approach to the German Retail Pharmacy Market. By Robert Aue
  10. Place-based innovation for sustainability By Philip McCann; Luc Soete
  11. Isolated and Poor: the cost of remoteness from the capital city By Provenzano, Sandro
  12. How effective has been the Spanish lockdown to battle COVID-19? A spatial analysis of the coronavirus propagation across provinces By Orea, Luis; Álvarez, Inmaculada C.
  13. The Great Divide: Regional Inequality and Fiscal Policy By William Gbohoui; W. Raphael Lam; Victor Duarte Lledo
  14. Zur Rückwanderung von Arbeitskräften in die ländlichen Regionen Deutschlands: Deskriptive Befunde By Meister, Moritz; Stiller, Johannes; Niebuhr, Annekatrin; Peters, Jan Cornelius; Hinrichsen, Peer Lasse; Reutter, Philipp

  1. By: Massimiliano Nuccio (BLISS – Digital Impact Lab, Department of Management, Università Ca' Foscari Venice); Marco Guerzoni (DESPINA Big Data Lab, Department of Economics and Statistics Cognetti De Martiis, University of Torino); Riccardo Cappelli (Department of Economics and Social Sciences, Polytechnic University of Marche); Aldo Geuna (Department of Culture, Politics and Society, University of Torino)
    Abstract: Recent literature on the diffusion of robots mostly ignores the regional dimension. The contribution of this paper at the debate on Industry 4.0 is twofold. First, IFR (2017) data on acquisitions of industrial robots in the five largest European economies are rescaled at regional levels to draw a first picture of winners and losers in the European race for advanced manufacturing. Second, using an unsupervised machine learning approach to classify regions based on their composition of industries. The paper provides novel evidence of the relationship between industry mix and the regional capability of adopting robots in the industrial processes.
    Keywords: Robots, Industry 4.0., Innovation, Industry Mix, Self-Organizing Maps
    JEL: E32 O33 R11 R12
    Date: 2020–07
  2. By: Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
    Abstract: We study whether and when Research and Development (R&D) activities by foreign multinationals help in the formation and development of new innovation clusters. Combining information on nearly four decades worth of patents with socio-economic data for regions that cover virtually the entire globe, we use matched difference-in-differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: foreign research activities help a region climb 14 percentiles in the global innovation ranks within five years. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers in local labor markets abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with relatively low absorptive capacity. We attribute these differences to that fact that the trade-off between costs and benefits of local spillovers a multinational faces depends on the multinational’s technological sophistication. This illustrates the importance of understanding corporate strategy when analyzing innovation clusters.
    Keywords: innovation; regions; Foreign Direct Investment; patenting; cluster emergence
    JEL: O32 O33 R11 R12
    Date: 2020–07
  3. By: Eppelsheimer, Johann (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Rust, Christoph
    Abstract: "This paper analyzes human capital externalities from high-skilled workers by applying functional regression to precise geocoded register data. Functional regression enables us to describe the concentration of high-skilledworkers aroundworkplaces as continuous curves and to eiciently estimate a spillover function that depends on distance. Furthermore, our rich panel data allow us to address the sorting of workers and to disentangle human capital externalities from supply eects by using an extensive set of time-varying fixed eects. Our estimates reveal that human capital externalities attenuate with distance and disappear after 15 kilometers. Externalities from the immediate neighborhood are twice as large as those from surroundings ten kilometers away." (Author's abstract, IAB-Doku) ((en))
    JEL: C13 D62 J24 J31 R10 R12
  4. By: Kyriakos Drivas; ; Raphaël
    Abstract: This paper provides insights on trademark activity at the regional level via two objectives. First, it examines the relationship between technological capabilities and new trademark applications. Second, it examines whether regions branch out to new trademark specializations that are related to their existing specializations. We employ EUIPO’s data to study 218 European NUTS-2 regions (16 countries) over the period 2000-2016. Results show that increased technological stock is associated with more trademark applications and that existing trademark relatedness induces new specializations. These findings contribute to better understanding of trademark activity and policies related to regional diversification including Smart Specialization.
    Keywords: Technological capabilities, Marketing activities, Trademark applications, Regional diversification, Relatedness, EUIPO
    JEL: O34 O38 R11
    Date: 2020–08
  5. By: Álvarez, Inmaculada C.; Gude, Alberto; Orea, Luis
    Abstract: This paper examines the role of both intra and inter-industry spillovers when estimating regional aggregate production functions. To our knowledge, this is the first paper that examines technological and spatial externalities simultaneously using sector-level data. The proposed model also extends the standard spatial econometric models by modeling interregional (spatial) dependence through the economic criteria of migration flows. We apply our methodology to the Spanish provinces over the 2001-2013 period. Our results reveal the simultaneous presence of both Marshallian and Jacobian externalities. The spillovers of private production factors are negative in most of the sectors, indicating the presence of inter-regional and inter-sectoral competition for skilled labor and private capital. Our results also indicate that the core-periphery theory can be applied to both fully efficient and inefficient sectors, a finding that should be examined more deeply in the future.
    Date: 2019
  6. By: John Gibson; Susan Olivia; Geua Boe-Gibson
    Abstract: Night lights, as detected by satellites, are increasingly used by economists, typically as a proxy for economic activity. The growing popularity of these data reflects either the absence, or the presumed inaccuracy, of more conventional economic statistics, like national or regional GDP. Further growth in use of night lights is likely, as they have been included in the AidData geo-query tool for providing sub-national data, and in geographic data that the Demographic and Health Survey links to anonymised survey enumeration areas. Yet this ease of obtaining night lights data may lead to inappropriate use, if users fail to recognize that most of the satellites providing these data were not designed to assist economists, and have features that may threaten validity of analyses based on these data, especially for temporal comparisons, and for small and rural areas. In this paper we review sources of satellite data on night lights, discuss issues with these data, and survey some of their uses in economics.
    Keywords: Density; Development DMSP Luminosity Night lights VIIRS
    JEL: O15 R12
    Date: 2020
  7. By: John Gibson
    Abstract: Night lights data are increasingly used in applied economics, almost always from- the Defense Meteorological Satellite Program (DMSP). These data are old, with- production ending in 2013, and are flawed by blurring, lack of calibration, and- top-coding. These inaccuracies in DMSP data cause mean-reverting errors. This- paper shows newer and better VIIRS night lights data have 80% higher predictive- power for real GDP in a cross-section of almost 300 European NUTS2 regions.- Spatial inequality is greatly understated with DMSP data, especially for the most- densely populated regions. A Pareto correction for top-coding of DMSP data has- a modest effect.
    Date: 2020
  8. By: Brueckner, Markus; Pappa, Evi; Valentinyi, Akos
    Abstract: Using a panel of 268 European regions during 1990-2014, we document that the degree of local autonomy has a significant effect on the government spending multiplier. Measured with the "Local Autonomy Index" constructed by a panel of experts under the auspices of the European Commission, the estimated effect of regional government spending on regional output is on average close to zero in countries with the lowest degree of local autonomy, while it is around one in countries with the highest degree of local autonomy. Consistent with literature, we find that regional government spending multipliers are state dependent: larger when labor markets are slack and output is below trend than when labor markets are tight and output is above trend. Greater local autonomy increases the multipliers in all states, and more so when labor markets are slack and output is below trend. To explain the empirical findings, we build a DSGE model where both local and central government spending contributes to a public good that enhances productivity of the private sector.
    Keywords: elasticity of output to changes in government spending; Fiscal Decentralization; local autonomy index; multipliers; New Keynesian model of a monetary union; public spending hypothesis
    JEL: E12 E32 E62 F33 R12
    Date: 2019–11
  9. By: Robert Aue
    Abstract: This paper examines the e ect of price competition on the location choices of retail pharmacies in large cities. I exploit a regulatory change in 2004 that introduced price competition for non-prescription drugs to estimate the parameters of a dynamic spatial entry model, using a comprehensive panel dataset of retail pharmacy locations. The dynamic model is estimated by means of a nested xed point approach, because the asymmetric nature of the entry game renders conventional two-step estimators inapplicable. The computational burden of this approach is alleviated by tailoring the concept of oblivious equilibrium, developed by Weintraub et al. (2008), to the spatial nature of the game. I nd that the regulatory change lead to more intense local competition and lower entry costs. The estimated structural model is then used to decompose the e ects of the regulatory change on market structure and consumers' travel distances. I nd that one third of the total decline in the number of pharmacies between 2004 and 2016 is attributable to increased local interaction, whereas it caused the consumers' distance to the nearest pharmacy to increase only marginally. This suggests that price competition is bene cial for consumers not only because it lowers retail prices, but also because it leads to a more ecient spatial distribution of retail pharmacies.
    Keywords: spatial competition, oblivious Equilibrium, price Regulation
    JEL: L81 L50 R30
    Date: 2020–07
  10. By: Philip McCann; Luc Soete (University of Sheffield Management School)
    Abstract: The new Commission has made "sustainable development", together with the digital agenda, the core element of its overall growth strategy for the present decade. From a global perspective the European Green Deal (European Commission 2020a,b) represents on the one hand the EU's contribution to the Sustainable Development Goals (SDGs) – Europe's Moonshot mission of the 21st Century – and on the other hand the EU's "smart specialization strategy" – Europe's attempt to develop at world level a leading position in sustainable development. The Paris Convention provides from this perspective the overall European framework for national, regional and local city commitments with the EC designing and organizing the accompanying financial and regulatory incentive schemes (such as the climate pact, the Green Deal investment plan and the Just Transition fund, the necessary reforms in the European semester, etc.). Viewing the European Green Deal as a combination between a European 21st Century "Moonshot mission" and an internal, "smart specialization strategy" raises though also many, new challenges as to the respective governance responsibilities of the different actors. In this short paper, we present some first reflections on the way insights from science, technology and innovation studies on the one hand and regional studies on the other could help in the design of "green deal" policies at European, national and regional/urban level and pulled together provide an intellectual framework for multi-level governance. Such "science for policy" reflections can serve as basis for more in depth discussions between EU policy makers as well as research scholars in the academic community. In a first section, we first review some of the arguments as to why the European Green Deal represents today primarily an innovation-led development strategy for Europe. We describe how historically the new EGD strategy represents a re-arranging of priorities, making sustainable development as the overriding strategic priority: the opportunity for Europe to position itself globally and locally as green specialisation area through innovation. Second and more specifically at the governance level, the new EGD strategy raises several crucial multi-level governance challenges. Players who were not really at the centre of the European integration process such as regions; or totally absent, such as cities and communities are now likely to play a crucial role. We claim that an effective innovation-driven policy with a directionality requires a proper division of tasks between the EC, national and regional/local governance levels. Third, we focus on how to detect and overcome possible trade-offs involved in prioritizing such a green development strategy compared to the more traditional objective of smart growth as put forward in the previous EU strategies. Through a more explicit recognition and analysis of these trade-offs, we believe a better framework can be sketched for the real, new growth opportunities linked to the Green Deal. In the second section of the paper, we discuss in more detail each of the relevant challenges and trade-offs facing different types of regions in their movements towards the goals of the Green Deal and the issues which will need to be explicitly considered in the appropriate design of regional policy schemes. Second, we address the particular role cities might play in this process. Contrary to many other regions in the world, Europe's population is heavily urbanized with cities accounting for the majority of carbon production and consumption-related emissions. This observation provides again greater opportunities for targeted interventions aimed at enhancing sustainability. For the Green Deal to be embraced locally throughout Europe it will be essential to engage all cities and regions across the EU. We argue that the accumulated experience of smart specialization strategies is very valuable in this context, but that these will need to take the next step embracing transformative innovation for systemic transitions, reaping the opportunities and alleviate the threats of the global ecological and digital transitions. We make some concrete proposals, what we call "learning modules" on how this could be done. In a third section, we address the need for a continuous "science for policy" approach, particularly in case of a radically new strategic policy framework such as the European Green Deal. The implementation and design of the European Green Deal would benefit, we argue from a Science for Policy Platform on Place-based innovation for Sustainability. This platform could both support local actors and channel findings on local innovation barriers or early trade-off alerts to the EU and national policy making.
    Keywords: sustainability, innovation
    Date: 2020–07
  11. By: Provenzano, Sandro
    Abstract: This paper investigates whether areas isolated from the capital city are less de- veloped economically in Sub-Saharan Africa. We apply a boundary-discontinuity design using national borders that divide pre-colonial ethnic homelands to obtain quasi-experimental variation in distance to the national capital city. Based on night- lights and geocoded surveys, we find that a one percent increase in distance to the capital city causes a decrease in the probability of detecting nightlights by 3 percent- age points and a reduction in household wealth corresponding to 3.5 percentiles of the national wealth distribution. Our results suggest that a lower provision of public goods in isolated areas is a key link between remoteness and economic performance. Despite receiving worse services, people who are isolated exhibit a higher level of trust in their political leaders. We interpret this as pointing towards dysfunctional accountability mechanisms that reduce the incentives of state executives to invest into isolated areas.
    Keywords: boundary discontinuity; capital city; economic growth; nightlights; public goods; spatial inequality; Sub-Saharan Africa
    JEL: D72 H41 O10 O40 R12
    Date: 2020–07
  12. By: Orea, Luis; Álvarez, Inmaculada C.
    Abstract: This paper assesses the effectiveness of the Spanish lockdown of population on March 14th to battle the COVID-19 propagation, as well as the effect of bringing forward the date of this public intervention. We test not only whether the lockdown (and othercontrol measures) has prevented local contagion of the virus, but also whether it has prevented the inter-province spread of COVID-19. We find a drastic reduction in the propagation of coronavirus across the Spanish provinces since March 14th, indicating that the lockdown has been quite effective in preventing the between-province spread of the coronavirus. Regarding the propagation of the virus within each province, we find a significant contraction in the rates of growth of coronavirus cases (5.8% on average) attributed to the lockdown. A first counterfactual exercise shows that the lockdown implemented on March 14 has reduced the number of potential COVID-19 cases by 79.5%. The largest reductions in coronavirus cases are found in provinces that are either close to the epicentres of the coronavirus or adjacent to provinces with more advanced epidemics. A second counterfactual exercise shows, however, that the number of coronavirus cases would have been reduced by an additional 12.8% if the lockdown had been brought forward to March 7th, a reduction that likely would have prevented the collapse of many hospitals in Spain.
    Date: 2020
  13. By: William Gbohoui; W. Raphael Lam; Victor Duarte Lledo
    Abstract: Growing regional inequality within countries has raised the perception that “some places and people” are left behind. This has prompted a shift toward inward-looking policies and away from pro-growth reforms. This paper presents novel stylized facts on regional inequality for OECD countries. It shows that regional disparity in per-capita GDP is large (even after adjusting for regional price differences), persistent, and widening over time. The paper also finds that rising nationwide income inequality is associated with both rising within-region income inequality and widening average income across regions. The rise in inequality is related to declining incentives for interregional labor mobility, especially for poor households in lagging regions, which are estimated to reduce by as much as one-third in the United States. Against these facts, the paper proposes a framework to identify whether, how and by whom fiscal policies can be used to tackle regional inequality. It outlines conditions under which those policies should be spatially-targeted and illustrates how they can be complementary to conventional means-testing methods in mitigating income inequality.
    Keywords: Cost of living;National income;Social security;Development;Social indicators;Regional inequality,fiscal redistribution,mobility,intergovernmental relations,regional disparity,means-testing,lead region,OECD country
    Date: 2019–05–02
  14. By: Meister, Moritz; Stiller, Johannes; Niebuhr, Annekatrin; Peters, Jan Cornelius; Hinrichsen, Peer Lasse; Reutter, Philipp
    Abstract: Dieses Working Paper beschreibt das Rückwanderungsgeschehen von Arbeitskräften in Deutschland und dessen Bedeutung für die Wanderungsbilanzen von Regionen. Die Auswertungen wurden im Rahmen des gemeinsamen Forschungsvorhabens "Die räumliche Mobilität von Arbeitskräften im Erwerbsverlauf - Analysen für ländliche Räume in Deutschland" (MobiLä) des Thünen-Instituts für Ländliche Räume und des Instituts für Arbeitsmarkt- und Berufsforschung (IAB) vorgenommen. Das Projekt wird aus Mitteln des Bundesprogramms Ländliche Entwicklung (BULE) gefördert. Datengrundlage sind die Integrierten Erwerbsbiografien (IEB) des IAB. Für die Arbeitskräfte in Deutschland insgesamt zeigen unsere Auswertungen, dass von den Wohnortverlegungen über Kreisregionsgrenzen im Zeitraum 2014 bis 2017 mindestens 27 Prozent eine Rückwanderung darstellten: Die Arbeitskräfte zogen also in eine Region, in der sie bereits zuvor mindestens einmal gewohnt hatten. Die Bedeutung des Rückwanderungsgeschehens für das Wanderungsaufkommen schwankt allerdings zwischen Personengruppen. Einen unterdurchschnittlichen Anteil an Rückwanderungen weisen insbesondere Hochqualifizierte auf (25 Prozent). Der höchste Wert ergibt sich bei einer Differenzierung nach dem Alter für die 30- bis 34-Jährigen (32 Prozent). Für ländliche Regionen ist die Bedeutung der Rückwanderung - gemessen am Anteil der Rückwanderung an der gesamten Zuwanderung von Arbeitskräften eines Jahres - mit 31 Prozent vergleichsweise groß. Dies gilt vor allem für agglomerationsferne Gebiete und insbesondere für ländliche Regionen in Ostdeutschland, aber auch generell für solche mit weniger guter sozioökonomischer Lage. 50 Prozent aller ländlichen Regionen verzeichnen aus dem Rückwanderungsgeschehen einen positiven Wanderungssaldo (mehr in die betrachtete Region rückkehrende Arbeitskräfte als aus der betrachteten Region abwandernde, in eine andere Region rückkehrende Arbeitskräfte), der zu einer Verbesserung des Gesamtwanderungsergebnisses der betrachteten Region beiträgt - dies kann eine Reduzierung eines negativen Saldos sein oder auch ein Beitrag, der zu einer insgesamt positiven Wanderungsbilanz führt. Letzteres lässt sich im Untersuchungszeitraum jedoch beinahe ausschließlich für Regionen in Westdeutschland beobachten und oft nur für ländliche Gebiete mit guter sozioökonomischer Lage.
    Keywords: Arbeitskräftemobilität,Binnenwanderung,Deutschland,ländliche Räume,Rückwanderung,Germany,Internal migration,Labor mobility,Return migration,Rural areas
    JEL: R23 J21
    Date: 2020

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