nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒09‒21
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. From the Regional Economy to the Macroeconomy By Santiago Pinto; Pierre-Daniel G. Sarte
  2. Stability and sustainability of urban systems under commuting and transportation costs By TAKAYAMA Yuki,; IKEDA Kiyohiro,; THISSE Jacques-François,
  3. Crisis, adjustment and resilience in the Greek labour market: an unemployment decomposition approach By Monastiriotis, Vassilis; Martelli, Angelo
  4. Economic Integration Mexico-United States and Regional Performance in Mexico By Leonardo E. Torre Cepeda; Joana C. Chapa Cantú; Eva Edith González González
  5. Delineating functional labour market areas with estimable classification stabilities. By Benjamin Davies; David C. Maré
  6. Public research and the quality of inventions: the role and impact of entrepreneurial universities and regional network embeddedness By Holger Graf; Matthias Menter
  7. Start-up factories, transnational entrepreneurs and entrepreneurial ecosystems: unpacking the lure of start-up accelerator programmes By Brown, Ross; Mawson, Suzanne; Lee, Neil

  1. By: Santiago Pinto (Federal Reserve Bank of Richmond); Pierre-Daniel G. Sarte (Federal Reserve Bank of Richmond)
    Abstract: This chapter describes how two fields that traditionally evolved mostly separately, regional economics and macroeconomics, have increasingly come together over the past decade and a half to yield new insights into the relevance of regional forces for the macroeconomy. This chapter gives an overview to the basic question: why should macroeconomists care about the spatial allocation of economic activity or spatial models? There are no simple spatial aggregation theorems that give rise to an aggregate production function, and this chapter describes the variety of ways in which granular considerations and shocks that are regional in nature shape aggregate outcomes and motivate a need for policy. The macroeconomics literature is increasingly heading in the direction of unpacking the exact nature of granular forces in a way that leaves the representative agent and firm framework with aggregate shocks as an early and poor approximation to how actual economies work.
    Keywords: Agglomeration, Externalities, Aggregation, Region, Nation
    JEL: R12 R38 R30 R5 E13
    Date: 2020–06–23
  2. By: TAKAYAMA Yuki, (Kanazawa University); IKEDA Kiyohiro, (Tohoku University); THISSE Jacques-François, (Université catholique de Louvain, CORE, Belgium)
    Abstract: This paper explores the conditions for the emergence of a system of cities in a general equilibrium setting that accounts for the cost of shipping commodities between cities and the commuting cost borne by consumers within cities. Potential cities are equally distributed over a circular space. We find that the multiplicity of stable spatial equilibria is the rule and not the exception. Using the concept of stability areas to study the transition from one stable equilibrium to the next, we show that decreasing commuting or transportation costs generate equilibrium paths that feature either a megalopolis or hierarchical system of cities.
    Keywords: economic geographpy, cities, racetrack economy, multiplicity of stable equilibria, commuting costs, transportation costs
    JEL: F12 R12
    Date: 2020–01–23
  3. By: Monastiriotis, Vassilis; Martelli, Angelo
    Abstract: The crisis in Greece led to one of the largest economic shocks in European history. Drawing on micro-data from the Greek Labour Force Survey, we utilise standard micro-econometric methods and non-linear decomposition techniques to measure the size of the shock exerted on the Greek regional and national labour markets and the compositional and price adjustments in response to this. We find elements of economic dynamism, with some sizeable price adjustments in the economy of the Greek capital, Athens; but overall our results show that compositional adjustments (in labour quality/characteristics) have been partial and limited, becoming stronger only in the more recent recovery. Our results suggest a significant metropolitan advantage with regard to economic resilience, coming predominantly from a more efficient functioning of the labour market in metropolitan areas vis-a-vis other regions. Our use of the decomposition techniques for the analysis of macro-level developments in the labour market offers a novel perspective to the application of the decomposition methodology.
    Keywords: Unemployment risk; Non-linear decomposition; Greek crisis; Shock; Adjustment; forthcoming
    JEL: R14 J01 N0
    Date: 2020–08–20
  4. By: Leonardo E. Torre Cepeda; Joana C. Chapa Cantú; Eva Edith González González
    Abstract: Based on the World Input-Output Matrix 2016 estimated by Timmer et al. (2016), the Hypothetical Extraction Method is applied in a multi-country context to estimate Mexico's gross output and value added linked to the economic activity of the United States; and then the gross output and value added of the United States linked to Mexico's economic activity. Next, it is shown based on the Ghosh Regional Model how the value added of Mexico linked to the economic activity in the United States is allocated among its sectors and regions. The results capture the strong economic linkage between both economies at the aggregate level, as well as its sectoral concentration. The results also indicate that the Northern and Central regions of Mexico are those with the strongest link to the United States; followed by the Southern region, where the largest share of the oil industry is located.
    Keywords: Hypothetical Extraction, Ghosh Input-Output Model, World Input-Output Matrix, Mexico, United States, Economic Integration
    JEL: R11 R12 R15
    Date: 2020–06
  5. By: Benjamin Davies (Motu Economic and Public Policy Research); David C. Maré (Motu Economic and Public Policy Research)
    Abstract: We describe an unsupervised method for delineating functional labour market areas (LMAs) in national commuting networks. Our method uses the Louvain algorithm, which we extend to support top-down hierarchical LMA classification and estimable classification stabilities. We demonstrate our method using historical Census commuting data from New Zealand.
    Keywords: community detection; commuting; functional boundaries; labour market areas; networks
    JEL: J61 R12 R23
    Date: 2020–09
  6. By: Holger Graf (Friedrich Schiller University Jena, Faculty of Economics and Business Administration); Matthias Menter (Friedrich Schiller University Jena, Faculty of Economics and Business Administration)
    Abstract: The positive effect of public research on industrial innovations is beyond controversy: public research institutions produce knowledge that is subsequently transferred into product and process innovations by private businesses. Besides this rather passive role in commercializing inventions, public research institutions may also proactively exploit new knowledge through public sector entrepreneurship activities. Especially entrepreneurial universities are perceived as a conduit of knowledge spillovers, as they serve as central actors of innovation networks and stimulate network activities. Whereas the linkages between network embeddedness and innovation activities have been largely explored, the impact on patent quality in terms of radicalness, originality and generality remains rather unclear. Considering Germany’s diverse public research infrastructure (universities, polytechnics, and non-university research institutes), our findings reveal that the type of institution and the corresponding scientific orientation (basic vs. applied research) matter for the quality of inventions. Centrality of respective institutions within innovation networks thereby reinforces the radicalness of inventions. However, we do not find support for the general assumption that an entrepreneurial orientation of public sector entities augments the quality of inventions. We conclude the paper with policy recommendations as well as with future avenues of research.
    Keywords: patent quality, radical innovation, entrepreneurial university, network embeddedness, centrality
    JEL: O31 O32 O34
    Date: 2020–07–19
  7. By: Brown, Ross; Mawson, Suzanne; Lee, Neil
    Abstract: This paper examines the role of accelerator programmes in promoting transnational entrepreneurship. Designed to assist the growth of start-ups by providing seed finance and structured entrepreneurship support, these programmes are now a prominent feature in many entrepreneurial ecosystems around the world. Drawing on in-depth qualitative evidence focused on one particular programme, the paper shows accelerators play an important intermediary or ‘brokerage mechanism’ providing start-ups with enhanced relational connections and networks. Transnational entrepreneurs attracted to these programmes are highly focused on exploiting these networks whilst maintaining multiple levels of embeddedness in various contexts to maximize the opportunities afforded by accelerators. While many governments are attempting to replicate accelerators programmes within the public sector, the paper concludes that such attempts may prove problematic within weaker entrepreneurial ecosystems.
    Keywords: Transnational Entrepreneurs; Public Policy; Accelerators; Entrepreneurial Ecosystems; Networks
    JEL: R14 J01 F3 G3
    Date: 2019–05–04

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