nep-geo New Economics Papers
on Economic Geography
Issue of 2020‒12‒14
fourteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Measure Twice, Cut Once. Entrepreneurial Ecosystem Metrics By Jip Leendertse; Mirella T. Schrijvers; Erik Stam; ;
  2. Regional Income Disparities, Distributional Convergence, and Spatial Effects: Evidence from Indonesia By Gunawan, Anang; Mendez, Carlos; Santos-Marquez, Felipe
  3. Demographic change and regional labour markets By Böhm, Michael; Gregory, Terry; Qendrai, Pamela; Siegel, Christian
  4. Regional and Sectorial Impacts of the Covid-19 Crisis: Evidence from Electronic Payments By Susana Peralta; Joao Pereira dos Santos; Bruno Carvalho
  5. Local Sectoral Specialization in a Warming World By Bruno Conte; Klaus Desmet; Dávid Krisztián Nagy; Esteban Rossi-Hansberg
  6. Skilled Scalable Services: The New Urban Bias in Economic Growth By Fabian Eckert; Sharat Ganapati; Conor Walsh
  7. Special economic zones in Southern Africa: white elephants or latent drivers of growth and employment?: The case of Zambia and South Africa By Mwanda Phiri; Shimukunku Manchishi
  8. The Curse of Geography? Railways and Growth in Spain 1877-1930 By Guillermo Esteban-Oliver
  9. Local economies amidst the COVID-19 crisis in Italy: a tale of diverging trajectories By CERQUA, AUGUSTO; LETTA, MARCO
  10. Human Capital, Good Government and Economic Development: Evidence from Italian Provinces. By Amendola, Adalgiso; Barra, Cristian; Zotti, Roberto
  11. "Does Regional Growth Affect Public Attitudes Towards the European Union?" By Enrique López-Bazo
  12. Neighborhood Sorting Obscures Neighborhood Effects in the Opportunity Atlas By Dionissi Aliprantis; Hal Martin
  13. A Role for Regional Science in Analyzing Water Issues By Christa D. Court; Elham Erfanian
  14. Creating Growth by Connecting Place-Based Development Strategies By Age Mariussen; Fatime Barbara Hegyi

  1. By: Jip Leendertse; Mirella T. Schrijvers; Erik Stam; ;
    Abstract: In spite of the popularity of the entrepreneurial ecosystem approach in science and policy, there is a scarcity of credible, accurate and comparable metrics of entrepreneurial ecosystems. This is a severe shortcoming for both scientific progress and successful policy. In this paper, we bridge this metrics gap. We use the entrepreneurial ecosystem approach to quantify and qualify regional economies. Entrepreneurial ecosystems consist of the actors and factors that enable entrepreneurship. We operationalize the elements and outputs of entrepreneurial ecosystems for 273 European regions. The ecosystem elements show strong and positive correlations between them, confirming the systemic nature of entrepreneurial economies, and the need for a complex systems perspective. Our analyses show that physical infrastructure, finance, formal institutions, and talent take a central position in the interdependence web, providing a first indication of these elements as fundamental conditions of entrepreneurial ecosystems. The measures of the elements are used to calculate an index to approximate the quality of entrepreneurial ecosystems. This index is robust and performs well in regressions to predict entrepreneurial output, which we measure with novel data on productive entrepreneurship. The entrepreneurial ecosystem approach and the metrics we present provide a lens for public policy to better diagnose, understand and improve entrepreneurial economies.
    Keywords: entrepreneurial ecosystem; regional dynamics; entrepreneurship; economic development; economic policy; entrepreneurship policy
    JEL: D2 E02 L26 M13 O43 P00 R1 R58
    Date: 2020–11
  2. By: Gunawan, Anang; Mendez, Carlos; Santos-Marquez, Felipe
    Abstract: Using a novel dataset constructed for this study, the spatio temporal dynamics of income per capita across 34 provinces and 514 districts in Indonesia over the 2010-2017 period are analyzed. First, an exploratory spatial analysis suggests that spatial autocorrelation is only significant at the district level, and it appears to be robust from 2013 to 2017. Consequently, at this level, a spatial filtering model is used for decomposing income into a spatially independent component and a spatial residual. Next, through the lens of a distributional convergence framework, it was found that the spatially independent component shows less intra-mobility than the original income variable. When analyzing beta and sigma convergence, strong converging patterns are found for filtered variables and the speed is higher for the filtered data. Thus, it is argued that neighbor effects have played a significant role in slowing the pace of income convergence at the district level. In terms of provinces, beta convergence is reported and the distributional convergence framework suggests the formation of at least three clubs with high intra-distribution mobility for the upper end of the distribution. The article is concluded by relating these findings to some plausible policy interventions.
    Keywords: Convergence, Getis filter, Nonparametric distribution, Indonesia
    JEL: R10 R11 R15
    Date: 2019–11–24
  3. By: Böhm, Michael; Gregory, Terry; Qendrai, Pamela; Siegel, Christian
    Abstract: Like many other countries, Germany has experienced rapid population and workforce ageing, yet with substantial variation across regions. In this paper we first use this spatial variation between 1975 and 2014 to estimate quasi- causal supply effects of ageing on regional labour market outcomes, drawing on the identification strategy of Böhm and Siegel (2020). We find in our panel of German labour market regions that workforce mean age has considerable negative effects on the wage returns to age. We also obtain suggestive evidence that relative employment rates of older workers decline when mean age rises. A decomposition of the heterogeneous regional trends using our estimates shows that ageing of rural regions is mainly driven by supply (reflecting local population dynamics) whereas urban ageing is driven by demand (reflecting responses to economic conditions). We discuss the differential implications of these drivers for regional policy.
    Keywords: ageing,demographic change,regional differences,wage returns to age
    JEL: J11 J31 R23
    Date: 2020
  4. By: Susana Peralta; Joao Pereira dos Santos; Bruno Carvalho
    Abstract: This paper uses novel and comprehensive data on electronic payments and cash withdrawals in Portugal to study the impact of the first wave of Covid-19 until August 2020. We employ a difference-in-differences event study with monthly data, by municipality and sector, between 2018 and 2020. We identify a massive causal impact of the lockdown on overall purchases. The year-on-year growth rate decreased by 16, 37, and 28 percentage points, respectively, between March and May. The impact is less severe subsequently, but in August it is still below pre-pandemic levels. We show that the crisis is concentrated on more central and more urban municipalities. The sign and magnitude of the impact varies considerably across sectors. We identify two effects that explain the crisis in different regions: the weight of each sector on the local economy, or composition effect, and the relative contraction rates of sectors in main cities vis-a-vis the overall country, or behavioral effect. We show that the two effects concur in the result that the crisis is stronger in main cities.
    Keywords: Covid-19; urban areas; sectorial impacts; Portugal; transaction data
    JEL: D12 E21 R10
    Date: 2020–12
  5. By: Bruno Conte; Klaus Desmet; Dávid Krisztián Nagy; Esteban Rossi-Hansberg
    Abstract: This paper quantitatively assesses the world's changing economic geography and sectoral specialization due to global warming. It proposes a two-sector dynamic spatial growth model that incorporates the relation between economic activity, carbon emissions, and temperature. The model is taken to the data at the 1º by 1º resolution for the entire world. Over a 200-year horizon, rising temperatures consistent with emissions under Representative Concentration Pathway 8.5 push people and economic activity northwards to Siberia, Canada, and Scandinavia. Compared to a world without climate change, clusters of agricultural specialization shift from Central Africa, Brazil, and India's Ganges Valley, to Central Asia, parts of China and northern Canada. Equatorial latitudes that lose agriculture specialize more in nonagriculture but, due to their persistently low productivity, lose population. By the year 2200, predicted losses in real GDP and utility are 6% and 15%, respectively. Higher trade costs make adaptation through changes in sectoral specialization more costly, leading to less geographic concentration in agriculture and larger climate-induced migration.
    Keywords: climate change; quantitative economic geography; spatial growth
    JEL: O4 Q54 R13
    Date: 2020–12
  6. By: Fabian Eckert; Sharat Ganapati; Conor Walsh
    Abstract: Since 1980, economic growth in the U.S. has been fastest in its largest cities. We show that a group of skill- and information-intensive service industries are responsible for all of this new urban bias in recent growth. We then propose a simple explanation centered around the interaction of three factors: the disproportionate reliance of these services on information and communication technology (ICT), the precipitous price decline for ICT capital since 1980, and the preexisting comparative advantage of cities in skilled services. Quantitatively, our mechanism accounts for most of the urban biased growth of the U.S. economy in recent decades.
    Keywords: urban growth, high-skill services, technological change
    JEL: J31 O33 R11 R12
    Date: 2020
  7. By: Mwanda Phiri; Shimukunku Manchishi
    Abstract: The successful use of special economic zones as economic tools for export-led industrial development in East Asia propelled a wave of similar initiatives across Africa. In Southern Africa, Zambia and South Africa instituted special economic zones in their respective legal and institutional frameworks in the 2000s as mechanisms for catalysing industrialization and employment creation by means of domestic and foreign investments.
    Keywords: Special Economic Zones, Agglomeration, Industrialization, job creation
    Date: 2020
  8. By: Guillermo Esteban-Oliver (Department of Geography and Sociology, University of Lleida, Spain)
    Abstract: In this study, we explore the relationship between rail accessibility and municipal population growth in Spain from 1877 to 1930. To carry out this analysis we introduce a novel database, which combines census data with the geo-location of access points (stations and stops). Then, and in order to establish causality, we use a Least Cost Path (LCP) instrument. Our results suggest that municipalities with direct access (less than 1-hour walking distance to the nearest station or stop) experienced more rapid growth. The findings are robust to several checks and point to the transformative power of transport infrastructure, especially developing economies with an unforgiving geography.
    Keywords: Railways, population, growth
    JEL: N7 N9 R00
    Date: 2020–11
    Abstract: Impact evaluations of the microeconomic effects of the COVID-19 upheavals are essential but nonetheless highly challenging. Data scarcity and identification issues due to the ubiquitous nature of the exogenous shock account for the current dearth of counterfactual studies. To fill this gap, we combine up-to-date quarterly local labor markets (LLMs) data, collected from the Business Register kept by the Italian Chamber of Commerce, with the machine learning control method for counterfactual building. This allows us to shed light on the pandemic impact on the local economic dynamics of one of the hardest-hit countries, Italy. We document that the shock has already caused a moderate drop in employment and firm exit and an abrupt decrease in firm entry at the country level. More importantly, these effects have been dramatically uneven across the Italian territory and spatially uncorrelated with the epidemiological pattern of the first wave. We then use the estimated individual treatment effects to investigate the main predictors of such unbalanced patterns, finding that the heterogeneity of impacts is primarily associated with interactions among the exposure of economic activities to high social aggregation risks and pre-existing labor market fragilities. These results call for immediate place- and sector-based policy responses.
    Keywords: impact evaluation; counterfactual approach; machine learning; local labor markets; firms; COVID-19; Italy
    JEL: C53 D22 E24 R12
    Date: 2020–11–26
  10. By: Amendola, Adalgiso; Barra, Cristian; Zotti, Roberto (University of Turin)
    Abstract: Whether the increase in a region's economic activity could be attributable to the presence of a university is an important issue in economic geography. This paper uses the age of universities (some dating back to the 11th and 12th century) along with grants from private foundations and student's fees as instruments for human capital production, to estimate the impact of universities' degree production on the economic development in context of Italy. We furthermore test whether institutions, in terms of voice and accountability, government effectiveness, regulatory quality, rule of law, and corruption, may play an important moderating role in the human capital production-local economic development relationship. The findings firstly reveal the beneficial e ect of the university system on local economic development through the gain in human capital. Secondly, we argue that the development of high quality legal and administrative institutions is an important channel linking universities to greater economic activity.
    Date: 2020–10
  11. By: Enrique López-Bazo (AQR-IREA Research Group, University of Barcelona. Av. Diagonal 690, 08034 Barcelona, Spain.)
    Abstract: This study analyses the impact of growth (in absolute and relative terms) of the European regions on the attitudes towards the European Union (EU) of their citizens. It does so in a period of socio-economic turbulence caused by the financial and sovereign debt crises, the accession to the Union of countries of Central and Eastern Europe, and the spread of anti-European rhetoric. In a first stage, regional indicators of support for and trust in the EU are calculated from the microdata of several Eurobarometer surveys. They confirm interesting changes in the regional distribution of citizens’ attitudes during the period analysed, which vary between the two indicators. In a second stage, these indicators are merged with data on regional growth to assess the impact of the latter on citizens’ perception of the EU. The results suggest that support for and trust in the EU are more widespread in regions with a dynamic economy. This positive impact of growth remains significant and sizeable after controlling for several economic characteristics of the region. However, the impact of regional growth on attitudes towards the EU is not the same in all regions. The effect of support and trust is more intense in regions with per capita income above the EU average.
    Keywords: Perception of the EU, Regional growth, Economic convergence, EU regions. JEL classification: 018, R11, R58.
    Date: 2020–12
  12. By: Dionissi Aliprantis; Hal Martin
    Abstract: The Opportunity Atlas (OA) is an innovative data set that ranks neighborhoods according to children’s adult outcomes in several domains, including income. Conceptually, outcomes offer new evidence about neighborhood effects when measured in isolation from neighborhood sorting. This paper shows that neighborhood sorting contributes to OA estimates. We document cases in which small sample sizes and changes over time can explain disagreements between OA rankings and those based on contemporaneous variables. Our results suggest caution for interpretations of the OA data set at a granular level, particularly for predictions about the outcomes of black children in high-income neighborhoods.
    Keywords: neighborhood sorting; neighborhood effect; Opportunity Atlas
    JEL: R23 C81 J15 I38
    Date: 2020–12–01
  13. By: Christa D. Court (Food and Resource Economics Department, University of Florida); Elham Erfanian (Regional Research Institute, West Virginia University)
    Abstract: The World Economic Forum has consistently ranked water crises as one of the top five most impactful issues facing humanity, alongside but not completely separate from issues such as climate change and natural disasters (World Economic Forum, 2019). A growing population and changing climate will only further stress the constrained water system. Acute and ongoing societal disruptions, caused by significant declines in the available quality and quantity of fresh water around the globe, underscore the importance of water to human life and a functional society. The papers in this special issue highlight the role that regional scientists can and should play in informed decision-making related to water at the local, regional, and national scale.
    Keywords: Water, Regional Science, Integrated Analysis, Open Science
    JEL: Y2 Q25 R1
    Date: 2019–08–13
  14. By: Age Mariussen (University of Vaasa); Fatime Barbara Hegyi (Joint Research Centre)
    Abstract: In the past years, the European Commission launched three thematic Smart Specialisation platforms to support interregional collaborations and to support European Union regions committed to co-invest jointly in strategic growth areas. The bottom up component in this process has resulted in a wide variety of industry-scientific partnerships at regional and transnational levels. These networks include regions, which are very different in terms of innovation ecosystems, but nevertheless connected through shared thematic focus enabling transnational processes of innovation. This paper explains how interregional partnerships build on the efforts and results achieved in national and regional research and innovation strategies for Smart Specialisation and how, as a result of this, new European innovation ecosystems are emerging. With reference to existing literature and experiences so far, the paper outlines a conceptual framework of how transnational cooperation may strengthen regional place-based development strategies and improve regional innovation capabilities. Key analytical concepts are proximity, knowledge complexity, entrepreneurial discovery processes, stakeholder analysis and cluster emergence.
    Keywords: proximity, knowledge complexity, entrepreneurial discovery processes, stakeholder analysis, cluster emergence, smart specialisation, industrial modernisation, place-based strategies
    Date: 2020–11

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