nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒04‒12
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Role of Location on Complexity of Firms’ Innovation Outcome By Tavassoli, Sam; Karlsson, Charlie
  2. Quantifying the effects of Special Economic Zones using spatial econometric models By Template-Type: ReDIF-Paper 1.0; Zhaoying Lu
  3. Cities and Tasks By Koster, Hans R.A.; Ozgen, Ceren
  4. Addressing spatial dependence in technical efficiency estimation: A Spatial DEA frontier approach By Julian Ramajo; Miguel A. Marquez; Geoffrey J. D. Hewings
  5. Interregional Competition for Mobile Creative Capital With and Without Physical Capital Mobility By Batabyal, Amitrajeet; Nijkamp, Peter
  6. Urban Growth and Aggregate Growth in China By Ning Ma; Yanrui Wu; Jianxin Wu
  7. Entrepreneurship in Cities By Tavassoli, Sam; Obchonka, Martin; Audretsch, David B.
  8. The Application of Machine Learning Algorithms for Spatial Analysis: Predicting of Real Estate Prices in Warsaw By Dawid Siwicki
  9. Quantitative economic geography meets history: Questions, answers and challenges By David Krisztián Nagy
  10. Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation By John M. Barrios; Yael Hochberg; Daniele Macciocchi

  1. By: Tavassoli, Sam (RMIT University); Karlsson, Charlie (Jönköping International Business School)
    Abstract: In this paper we analyze how the location of firms influences their innovation outcomes, particularly the complexity of the outcomes. Using three waves of the Community Innovation Survey in Sweden for a balanced panel of firms from 2006 to 2012, we identified a range of innovation outcome categories, i.e. simple and complex (low-, medium-, highly-complex) innovation outcomes. The backbone of such categorization is based on how firms introduce a combination of Schumpeterian types of innovations (i.e. process, product, marketing, and organizational). Then we consider three regional characteristics that may affect the innovation outcomes of firms, i.e. (i) qualified labor market thickness, (ii) knowledge-intensive services thickness, and (iii) knowledge spillovers extent. We find that regional characteristics do not affect firms’ innovation outcomes in terms of their degree of complexity ubiquitously. They are only positively associated with those firms that introduce the most complex innovation outcomes. For firms with less complex innovation outcomes, regional factors seem not to play a pivotal role. For these innovators, internal resources as well as formal collaboration with external partners have a significant role.
    Keywords: innovation outcome; location; agglomeration economies; knowledge spillovers; Community Innovation Survey
    JEL: D22 L20 O31 O32
    Date: 2021–03–30
  2. By: Template-Type: ReDIF-Paper 1.0; Zhaoying Lu (Graduate School of Economics, Osaka University)
    Abstract: This paper evaluates the effects of a place-based program in China?Special Economic Zone (SEZ) program. It adds to the existing literature by introducing spatial proximity to understand the effects of SEZs on the local economy. Using a panel data set over the period from 2004 to 2007, the empirical results find that SEZs have positive spillover effects on regional productivity, most of which are from the neighborhood. Meanwhile, there exists a positive interdependence between local firms onregional productivity. The magnitude of spillover effects of SEZs is robust to changes in sample data, weight matrices selection, and alternative explanatory variables.
    Keywords: Special Economic Zone, Place-based Policy, Spatial Analysis,Productivity, Spillovers
    JEL: C21 C23 R10 O21
  3. By: Koster, Hans R.A. (Vrije Universiteit Amsterdam); Ozgen, Ceren (University of Birmingham)
    Abstract: This paper explores the relationship between routine-biased technological change and agglomeration economies. Using administrative data from the Netherlands, we first show that in dense areas, jobs are less routine-task intensive (i.e. less repetitive and automatable), meaning that jobs cover a larger spectrum of tasks. We then explore how the routine intensity of jobs affects the urban wage premium. We find that the urban wage premium is higher for workers performing non-routine tasks, particularly analytic tasks, while it is absent for workers in routine task intensive jobs. These findings also hold within skill groups and suggest that routinisation increases spatial wage and skill inequality within urban areas. We further provide suggestive evidence that a better matching of skills to jobs and increased learning opportunities in cities can explain these findings.
    Keywords: routinisation, tasks, agglomeration economies, employment density, skills mismatch
    JEL: R30 R33
    Date: 2021–03
  4. By: Julian Ramajo; Miguel A. Marquez; Geoffrey J. D. Hewings
    Abstract: This paper introduces a new specification for the nonparametric production-frontier based on Data Envelopment Analysis (DEA) when dealing with decision-making units whose economic performances are correlated with those of the neighbors (spatial dependence). To illustrate the bias reduction that the SpDEA provides with respect to standard DEA methods, an analysis of the regional production frontiers for the NUTS-2 European regions during the period 2000-2014 was carried out. The estimated SpDEA scores show a bimodal distribution do not detected by the standard DEA estimates. The results confirm the crucial role of space, offering important new insights on both the causes of regional disparities in labour productivity and the observed polarization of the European distribution of per capita income.
    Date: 2021–03
  5. By: Batabyal, Amitrajeet; Nijkamp, Peter
    Abstract: A lacuna in the extant literature and our desire to contribute to the theoretical literature on how tax/subsidy policies can be used by regions to attract the creative class together provide the motivation for this paper. The paper’s basic contribution is that it is the first to theoretically analyze competition between two regions (1 and 2) for mobile creative capital, the key attribute possessed by the creative class. Both regions produce a final good using creative and physical capital. In the first case, physical capital is immobile and only region 2 uses tax policy to attract the mobile creative capital. We compute the equilibrium returns to creative and physical capital, we specify a key condition for creative capital in the aggregate economy, and we show which of three tax policies gives region 2 the highest income. In the second case, creative and physical capital are mobile and both regions pursue tax policies to attract mobile creative capital. Once again, we compute the equilibrium returns to creative and physical capital and then describe the optimal taxes for the two regions given that they wish to maximize regional income.
    Keywords: Competition, Creative Capital, Physical Capital, Regional Income, Tax
    JEL: H20 R11 R50
    Date: 2020–12–29
  6. By: Ning Ma (Hainan College of Economics and Business); Yanrui Wu (Business School, the University of Western Australia; Research Centre in Business, Economics and Resources, Ho Chi Minh City Open University; Faculty of Finance, Banking and Business Administration, Quy Nhon University); Jianxin Wu (Jinan University)
    Abstract: Using a spatial equilibrium model and data of 286 Chinese cities at the prefecture and above- prefecture level from 2002 to 2013, this study estimates the contribution of each of the selected Chinese cities to national GDP growth. The results in this study reveal several interesting patterns. First, what an individual city contributes to aggregate growth is not represented clearly by the city’s GDP based on standard accounting calculation. Despite some of the strongest growth occurring in cities such as Beijing, Tianjin, Shanghai and Chongqing, these cities were only responsible for a small fraction of China’s growth over the period covered. In fact, the analysis shows that it is growth in the cities in the west that has made the greatest contribution to the overall growth of China. Furthermore, the analysis of the results shows that the dispersion of the real wage across Chinese cities increased. This increased wage dispersion lowered aggregate Chinese GDP by 25.41 percent. This represents a loss, which is an effect of the tightening of regulatory constraints to housing supply in high productivity cities like Beijing, Tianjin, Harbin, Shanghai, Wuhan, Changsha, Chongqing, Chengdu, and Xian. Finally, a counterfactual scenario whereby these cities under regulatory constraints are reduced to the same level as the national mean level suggests that Chinese GDP would increase by 20.62 percent.
    Keywords: Spatial Equilibrium; Urban Growth; Welfare; China
    JEL: C6 O18 O53 R11 R31
    Date: 2021
  7. By: Tavassoli, Sam (RMIT University); Obchonka, Martin (Australian Center for Entrepreneurship Research); Audretsch, David B. (Indiana University)
    Abstract: Impactful, growth-oriented entrepreneurship is a major research and policy focus. Building on arguments put forward by Jane Jacobs more than 50 years ago, we propose that local knowledge spillovers in a city are enhanced by human agency in that city (e.g. local psychological openness). This effect is critically amplified by the catalyst function of a favorable structural city environment that not only connects these agentic people (via urban density), but also facilitates the production and flow of new knowledge for these connected agentic people (via a diverse industry mix). This three-way interaction effect was confirmed in our empirical investigation of quality entrepreneurship across the MSAs (cities) in the US, using a large-scale dataset of the psychological profiles of millions of people. Local openness shows a robust positive effect on the level of quality entrepreneurship. This effect is further strengthened by a favorable structural city environment (i.e. high density and diversity) by up to 35%. Reviving Jacobs’ people focus, the results indicate that the best performing cities in terms of knowledge spillovers and economic performance are those that are not only home to, and attract, agentic people, but also empower these people by means of a physical and industrial city landscape that enables them to act in more innovative and entrepreneurial ways, as envisioned by Jacobs. We discuss the policy implications of our findings and an agenda for future research.
    Keywords: Entrepreneurship; Cities; Jacobs externalities; Knowledge Spillovers; Diversity; Density; Personality traits; Openness; Geographical psychology
    JEL: D83 D91 L26 O18
    Date: 2021–03–30
  8. By: Dawid Siwicki (Faculty of Economic Sciences, University of Warsaw)
    Abstract: The principal aim of this paper is to investigate the potential of machine learning algorithms in context of predicting housing prices. The most important issue in modelling spatial data is to consider spatial heterogeneity that can bias obtained results when is not taken into consideration. The purpose of this research is to compare prediction power of such methods: linear regression, artificial neural network, random forest, extreme gradient boosting and spatial error model. The evaluation was conducted using train, validation, test and k-Fold Cross-Validation methods. We also examined the ability of the above models to identify spatial dependencies, by calculating Moran’s I for residuals obtained on in-sample and out-of-sample data.
    Keywords: spatial analysis, machine learning, housing market, random forest, gradient boosting
    JEL: C31 C45 C52 C53 C55 R31
    Date: 2021
  9. By: David Krisztián Nagy
    Abstract: A rapidly growing literature uses quantitative general equilibrium models of economic geography to study the economic impact of historical events such as the railroad revolution, industrial take-off, structural transformation and wars. I identify three key challenges facing this literature: the tractability of model structure, the availability of historical data, and issues related to identification. I review the literature by discussing how it has been addressing each of these challenges. While doing so, I point out the rich set of questions that this literature can address, as well as the methodological innovations it has conducted to answer these questions.
    Date: 2021–03
  10. By: John M. Barrios; Yael Hochberg; Daniele Macciocchi
    Abstract: How do geographic and historical-cultural factors shape new business formation? Using novel data on new business registrations, we document that 75% of the variation in new business formation is explained by time-invariant county-level factors and examine the extent to which such variation is driven by historical, cultural, and geographic factors. Current-day new business formation is positively related to historical attributes that presage individualist culture: frontier experience and historical birthplace diversity, as well as the county’s topographical features. The relation holds when we exploit plausibly exogenous variation in frontier experience driven by shocks to the settlement process that arise from historical immigration flows. Our study points to the fundamental role of geographic and historical-cultural features, especially rugged individualism, in explaining contemporary new business formation in the U.S.
    JEL: L26 N3 N9 O1 O43
    Date: 2021–03

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