nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒04‒19
seventeen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The impact of place-based policies on income distribution By Giuseppe Albanese; Guglielmo Barone; Guido DeBlasio
  2. On the Economic and Health Impact of the COVID-19 Shock on Italian Regions: A Value Chain Approach By Tommaso Ferraresi; Leonardo Ghezzi; Fabio Vanni; Alessandro Caiani; Mattia Guerini; Francesco Lamperti; Severin Reissl; Giorgio Fagiolo; Mauro Napoletano; Andrea Roventini
  3. The income-inequality relationship within U.S. metropolitan areas 1980-2016 By Seifert, Friederike
  4. Migrants and boomtowns: micro evidence from the U.S. shale boom By Isha Rajbhandari; Alessandra Faggian; Mark Partridge
  5. Institutions and the uneven geography of the first wave of the COVID-19 pandemic By Andrés Rodríguez-Pose; Chiara Burlina
  6. Moving (within and across) spatial labour markets in times of COVID-19: evidence from Facebook mobility data on Italian labour market areas By Andrea Ascani; Alessandra Faggian; Sandro Montresor; Alessandro Palma
  7. Creativity over Time and Space - A Historical Analysis of European Cities By Michel Serafinelli; Guido Tabellini
  8. Modeling inter-regional patient mobility: Does distance go far enough? By Irlacher, Michael; Pennerstorfer, Dieter; Renner, Anna-Theresa; Unger, Florian
  9. Technological novelty and key enabling technologies: Evidence from European regions By Sandro Montresor; Gianluca Orsatti; Francesco Quatraro
  10. Populism Amidst Prosperity: How ‘smart’ are Smart Specialisation strategies? By Marco Di Cotaldo; Vassilis Monastiriotis; Andres Rodriguez-Pose
  11. Development Level of Hosting Areas and the Impact of Refugees on Natives’ Labor Market Outcomes By Dogu Tan Araci; Murat Demirci; Murat Guray Kirdar
  12. Populism Amidst Prosperity:The urban-rural polarisation of political disenchantment: An investigation of social and political attitudes in 30 European countries By Michael Kenny; Davide Luca
  13. Exploring Regional Innovation Policies and Regional Industrial Transformation from a Co-Evolutionary Perspective: The Case of Małopolska, Poland By Marta Gancarczyk; Marta Najda-Janoszka; Jacek Gancarczyk; Robert Hassink
  14. The role of relatedness and strategic linkages between domestic and MNE sectors in regional branching and resilience By Mattie Landman; Sanna Ojanper\"a; Stephen Kinsella; Neave O'Clery
  15. Analyzing social disadvantage in rural peripheries in Czechia and Eastern Germany: Conceptual model and study design By Keim-Klärner, Sylvia; Bernard, Josef; Bischof, Susann; van Dülmen, Christoph; Klärner, Andreas; Steinführer, Annett
  16. Spatial concentration and firm-level productivity in Kazakhstan By Zarina Adilkhanova
  17. Assessing Smart Specialisation: Monitoring and Evaluation Systems By Fatime Barbara Hegyi; Francesco Prota

  1. By: Giuseppe Albanese (Banca d'Italia); Guglielmo Barone (Università di Bologna); Guido DeBlasio (Banca d'Italia)
    Abstract: This paper assesses the causal impact of a prominent place-based policy - the EU cohesion policy - on income distribution in the receiving areas by studying a severe contraction of financing, which took place in the Italian region of Molise starting from 2008. We focus on the Gini Index at the municipality level and leverage a spatial difference-in-discontinuity empirical design. We show that local income distribution becomes more equal in the municipalities exposed to the shrinkage of EU funds, relative to untreated units located on the other side of the geographical border that identifies the generosity of aid regimes. The decrease in the Gini coefficient is due to the move of top earners to the center of the distribution. The reduction in the Gini index is confirmed even if we resort to a region-level analysis, in which the causal effect of the end of the policy is assessed by means of the synthetic control method.
    Keywords: place-based policy, income distribution
    JEL: R58 D31
    Date: 2021–03
  2. By: Tommaso Ferraresi (Istituto Regionale per la Programmazione Economica della Toscana (IRPET)); Leonardo Ghezzi (Istituto Regionale per la Programmazione Economica della Toscana (IRPET)); Fabio Vanni (Sciences Po, OFCE); Alessandro Caiani (IUSS Pavia); Mattia Guerini (Université Côte d'Azur, CNRS, GREDEG, France; Sant'Anna School of Advanced Studies; Sciences Po., OFCE); Francesco Lamperti (Institute of Economics and EMbeDS, Scuola Superiore Sant'Anna; RFF-CMCC European Institute on Economics and the Environment); Severin Reissl (IUSS Pavia); Giorgio Fagiolo (Institute of Economics and EMbeDS, Scuola Superiore Sant'Anna); Mauro Napoletano (OFCE Sciences-Po; SKEMA Business School); Andrea Roventini (Institute of Economics and EMbeDS, Scuola Superiore Sant'Anna; Sciences Po, OFCE)
    Abstract: In this work, we evaluate the exposure of Italian regions to the risk associated with the spread of COVID-19 through a two-step value chain approach. First, we estimate the degree of participation of Italian regions in a plurality of value chains linked to consumption, investment and exports. We distinguish between value chains aimed at satisfying essential needs and supply chains activated by needs characterized by a lower level of necessity in line with the restriction measures implemented by the Italian government. Second, we investigate the different levels of contagion risk associated with each value chain and the possibility of reducing it through remote working. An exercise on policy measures implemented by the Italian government during Fall 2020 completes the paper. We find that regions are affected differently by lockdown policies because of their high heterogeneity in the degree of embeddedness within different value chains and because their sectoral contributions to each of them. As a result, Italian regions are associated with very diverse potentials for mitigating contagion risk via remote working practices. Finally, we find evidence that economic and contagion risks positively correlate in non essential value chains, while they are negatively associated in the production of medium-necessity and essential goods and services. In turn, strong lockdowns induce substantially different trade-offs across regions, depending on how regions participate to value chains.
    Keywords: COVID-19 lockdown, value chains, input-output models, contagion risk, remote working
    JEL: R15 R10
    Date: 2021–04
  3. By: Seifert, Friederike
    Abstract: Economic growth might both increase and decrease income inequality, depending on the circumstances. The nature of this relationship matters at the city level as well. This paper examines the income-inequality relationship within U.S. metropolitan areas using cross-section and panel regression techniques over the 1980-2016 period. It finds that this relationship changes over time. A higher per capita income level was associated with a lower within-MSA inequality level in earlier years, but this association vanished later. For the 1980-2000 panel, per capita income increases are accordingly associated with decreases in inequality. In contrast, an increase in per capita income is associated with an increase in inequality in the 2006-2016 panel. The obtained results hint at polarization resulting from technological change substituting middle-skill routine tasks, but further research is still required to solve this puzzle.
    Keywords: Inequality,Income,Metropolitan Areas,United States
    JEL: D31 O18 R11
    Date: 2021
  4. By: Isha Rajbhandari (University of Puget Sound); Alessandra Faggian (Gran Sasso Science Institute); Mark Partridge (Ohio State University)
    Abstract: This paper analyzes the relationship between oil and gas development and in-migration of workers into boomtowns, taking into account their human capital. Using zero-inflated negative binomial estimation methodology, we find that shale development has differing scale and demand shock impacts on U.S. interregional migration flows. The results demonstrate the heterogeneity of migration responses to shale developments with a disproportionately higher positive effect for medium-high human capital workers with technical degrees or trainings common in the energy industry. Furthermore, labor demand shocks from oil and gas development have a modest association with migration flows, which is contrary to the assumption that natural resource boom is a considerable attraction for migrants. This study highlights the types of human capital gained by oil and gas development areas characterized as being rural and sparsely populated, which can have important implications for the long-run growth and economic resilience of the boomtowns.
    Keywords: migration, shale gas boom, human capital
    JEL: J23 J24 Q33 R11 R23
    Date: 2020–12
  5. By: Andrés Rodríguez-Pose (London School of Economics); Chiara Burlina (Gran Sasso Science Institute)
    Abstract: This paper examines the uneven geography of COVID-19-related excess mortality during the first wave of the pandemic in Europe, before assessing the factors behind the geographical differences in impact. The analysis of 206 regions across 23 European countries reveals a distinct COVID-19 geography. Excess deaths were concentrated in a limited number of regions — expected deaths exceeded 20% in just 16 regions — with more than 40% of the regions considered experiencing no excess mortality during the first six months of 2020. Highly connected regions, in colder and dryer climates, with high air pollution levels, and relatively poorly endowed health systems witnessed the highest incidence of excess mortality. Institutional factors also played an important role. The first wave hit regions with a combination of weak and declining formal institutional quality and fragile informal institutions hardest. Low and declining national government effectiveness, together with a limited capacity to reach out across societal divides, and a frequent tendency to meet with friends and family were powerful drivers of regional excess mortality
    Keywords: COVID-19, pandemic, institutions, regions, Europe
    JEL: H75 O43 R58
    Date: 2020–11
  6. By: Andrea Ascani (Gran Sasso Science Institute); Alessandra Faggian (Gran Sasso Science Institute); Sandro Montresor (Gran Sasso Science Institute); Alessandro Palma (Gran Sasso Science Institute)
    Abstract: This article aims at investigating the interplay between the local spread of COVID-19 and the patterns of individual mobility. Conceptually, we connect the debate on the resilience to the perturbation caused by COVID-19 with the literature on spatial labour markets. By looking at very granular flows of Facebook users moving within and across Italian labour market areas (LMAs), we analyse whether their heterogeneous internal mobility has had a significant impact on excess mortality, thus testing whether, and under which circumstances, LMAs have actually behaved as self-containing local systems or have rather exported/imported people (and possibly) infections to/from other labour markets. We further extend the analysis by exploring how individual mobility plays different roles depending on the typology of LMAs considered. Specifically, we focus on LMAs hosting industrial districts, which are characterised by a thicker local labour market and denser business and social interactions, as well as LMAs with a high presence of “essential sectors†, i.e. activities not affected by the COVID-19 containment measures taken by the Italian government at the onset of the crisis.
    Keywords: labour market, mobility, COVID-19, resilience, Facebook
    JEL: R10 R12 R23 J61 I18
    Date: 2021–01
  7. By: Michel Serafinelli; Guido Tabellini
    Abstract: Creativity is often highly concentrated in time and space, and across different domains. What explains the formation and decay of clusters of creativity? We match data on notable individuals born in Europe between the XIth and the XIXth century with historical city data. The production and attraction of creative talent is associated with city institutions that protected economic and political freedoms and promoted local autonomy. Instead, indicators of local economic conditions such as city size and real wages, do not predict creative clusters. We also show that famous creatives are spatially concentrated and clustered across disciplines, that their spatial mobility has remained stable over the centuries, and that creative clusters are persistent but less than population.
    Keywords: innovation, agglomeration, political institutions, immigration, gravity, human capital
    JEL: R10 O10 J61 J24
    Date: 2021
  8. By: Irlacher, Michael; Pennerstorfer, Dieter; Renner, Anna-Theresa; Unger, Florian
    Abstract: This paper estimates a theory-guided gravity equation of regional patient ows. In our model, a patient's choice to consult a physician in a particular region depends on a measure of spatial accessibility that accounts for the exact locations of both patients and physicians. Introducing this concept in a spatial economics model, we derive an augmented gravity-type equation and show that our measure of accessibility performs better in explaining patient ows than bilateral distance. We conduct a rich set of counterfactual simulations, illustrating that the effects of physicians' market exits on patient mobility crucially depend on their exact locations.
    Keywords: gravity model,patient mobility,spatial accessibility,two-step floating catchmentareas (2SFCA)
    JEL: R10 R12 R23 I11 I18
    Date: 2021
  9. By: Sandro Montresor (Gran Sasso Science Institute); Gianluca Orsatti (Università di Torino); Francesco Quatraro (Università di Torino)
    Abstract: This paper investigates whether the local endowment of Key Enabling Technologies (KETs) drives the regions’ capacity to create technological novelty. Looking at regional innovations as re-combinations of preexisting knowledge, we propose two indicators of regional technological novelty (absolute and local), based on patents that originally draw on still unexplored prior-art knowledge connections. We argue that KETs have inherent re-combinatorial properties of the regional knowledge base and that their local endowment drives technological novelty. We test for this argument by focusing on a sample of 1,255 NUTS3 EU regions over the period 2000-2014 in an original instrumental variable setting. With some nuances, results confirm our main hypotheses. KETs do drive significantly the introduction of local technological novelty, but this mainly occurs for an absolute kind of novelty. The development, use or eventually external acquisition of KETs is thus an important policy priority for regions willing to compete at the technological frontier.
    Keywords: technological novelty, knowledge combination, key enabling technologies (KETs)
    JEL: R11 R58 O31 O33
    Date: 2020–09
  10. By: Marco Di Cotaldo; Vassilis Monastiriotis; Andres Rodriguez-Pose
    Abstract: The introduction of Smart Specialisation (S3) as a fundamental pillar of the 2014 reform of the European Union (EU) Cohesion Policy has represented a significant strategic shift in European development intervention. S3 strategies are aimed at mobilising the economic potential of each country and region of the EU, by allowing a more place-based and bottom-up approach to development. However, despite the salience that S3 has acquired in a short period of time, there has been no Europeanwide evaluation of the extent to which S3 strategies truly reflect the economic characteristics and potential of the territories where they are being implemented. This paper examines the characteristics of S3 strategies across Europe – by focusing on their development axes, economic/scientific domains, and policy priorities – to assess whether this is the case. The results show that S3 strategies display a proliferation of objectives, a problem which particularly affects those areas with weaker government quality. Moreover, strategies are generally loosely connected with the intrinsic conditions of each region and mostly mimic what neighbouring areas are doing. The lack of more concise and focused S3 strategies is likely to undermine the effectiveness of what is, otherwise, a very interesting and worthwhile policy experiment.
    Keywords: Smart Specialisation, EU Policy, regions, Europe
    Date: 2020–11
  11. By: Dogu Tan Araci (Prosus); Murat Demirci (Department of Economics, Koç University); Murat Guray Kirdar (Department of Economics, Bogazici University)
    Abstract: We examine how the impact of refugees on natives’ labor market outcomes varies by the development level of hosting areas, which has important implications for the optimal allocation of refugees across regions and countries. For this purpose, in the context of the largest refugee group in the world in a single country, Syrian refugees in Turkey, we exploit the significant variation in the development level across regions of Turkey, several of which host a substantial number of refugees. We find that the impact of refugees on natives’ labor market outcomes becomes significantly less adverse as regional development level rises. For instance, the negative effects of the refugee shock on employment and labor force participation of women observed at the mean level of development vanish at high levels of development. Moreover, while the impact of the refugees on employment of men is negative for the least developed regions, it is positive for highly developed regions. Our findings imply that developed regions and countries are in a better position in terms of protecting their local population from the adverse effects of refugees in the labor market.
    Keywords: refugees, optimal refugee allocation, labor market impact, development level, employment and wages of men and women.
    JEL: J61 O15 F22 R23 R58
    Date: 2021–04
  12. By: Michael Kenny; Davide Luca
    Abstract: Despite the prevalent focus upon increasing political divisions between urban and rural Europe, relatively little research has explored whether there is a systemic urban-rural divide in the political and socioeconomic attitudes of citizens across the entire continent. This paper aims to fill this gap. Drawing on individual-level data from the European Social Survey, it explores potential linkages between place of residence and individual attitudes. Our results show that there are strong, and statistically significant, differences between the populations in these different settings. On average, rural dwellers show stronger levels of dissatisfaction with democracy and lower trust in the political system. Yet, while we uncover stark differences in attitudes towards migration and globalisation, we do not find significant variation on some social and economic issues traditionally at the core of left-right cleavages. And our analysis suggests that this spatial divide does not operate in a binary fashion. It is more of a continuum, running on a gradient from inner cities to metropolitan suburbs, towns, and the countryside. The differences are explained by both composition and contextual effects, and underscore the importance of moving beyond ‘standard’ trade-offs between so-called ‘people-based’ versus ‘place-based’ policy approaches to territorial inequality.
    Keywords: urban-rural divide; regional inequality; geography of discontent; Europe
    Date: 2020–11
  13. By: Marta Gancarczyk; Marta Najda-Janoszka; Jacek Gancarczyk; Robert Hassink
    Abstract: The Małopolska region in southern Poland has a long tradition of mature and heavy industries, but more recently also new, unrelated industries have been emerging in this region, such as knowledge intensive business services. At the same time, innovation policies have been decentralizing over the last 20 years in Poland and in the Małopolska region, therefore, the effects of regional innovation policies on regional industrial transformation (RIT) have grown. Against this background, the paper aims to explain the role of regional innovation policies in regional industrial transformation from a co-evolutionary perspective. For this purpose, it extends the common co-evolutionary theoretical framework with interaction mechanisms, i.e. the processes underlying policy-industry mutual influences, and thus explaining their co-evolution. Interaction mechanisms allow us to better understand the major directions in industrial development and in policy approach, namely, the exploitation of extant capabilities and the exploration of new economic areas. The role of innovation policy in the Małopolska RIT can be described as predominantly assisting and adjusting to industrial change with some level of proactive promotion of new industrial opportunities. Overall, we observe reciprocal relationships with regional industry rather than unidirectional influence of this policy. We find this dynamic interaction a positive phenomenon that enabled the evolution of policy to balance the exploitative and explorative approaches to industrial development.
    Keywords: regional innovation policies, regional industrial transformation, co-evolution, Małopolska, Poland
    Date: 2021
  14. By: Mattie Landman; Sanna Ojanper\"a; Stephen Kinsella; Neave O'Clery
    Abstract: Despite the key role of multinational enterprises (MNEs) in both international markets and domestic economies, there is no consensus on whether or how they positively impact their host economy. In particular, do MNEs foster the creation of new domestic firms through knowledge spillovers? In this study, we look at the impact of the presence of related MNE industries on the entry and exit of domestic export industries in Irish regions before, during, and after the 2008 financial crisis. Specifically, we are interested in whether the presence of MNEs in a region results in knowledge spillovers and the creation of new domestic export activities in related sectors. To quantify how related an industry is to a region's current export basket we deploy an existing cohesion variable, closeness, that measures the relatedness of a new industry to existing industries within a region. We also introduce a new variable, strategic closeness, which captures not only the relatedness of industries within a region but their own connectivity or embeddedness. We use a dataset containing all government-supported export firms in Ireland between 2006-2018. We find that the presence of related MNE industries is associated with the entry of new domestic activity, suggesting that Irish regions benefited from domestic-MNE linkages. However this relationship was temporarily lost after the financial crisis and only recently re-established, with domestic entry dependent on the presence of highly embedded MNE sectors. Furthermore, we find that related MNEs help protect domestic industries against exit after the crisis and thereby play a role in enhancing regional resilience.
    Date: 2021–04
  15. By: Keim-Klärner, Sylvia; Bernard, Josef; Bischof, Susann; van Dülmen, Christoph; Klärner, Andreas; Steinführer, Annett
    Abstract: The aim of this Working Paper is to introduce a conceptual model and study design for researching social disadvantage in rural peripheries, focusing on the interplay of social disadvantage and spatial disadvantage. The paper presents the theoretical concepts, understandings, and definitions, as well as the research design we draw on in the international research project 'Social disadvantage in rural peripheries in Czechia and eastern Germany: opportunity structures and individual agency in a comparative perspective.' The project investigates the multifaceted relationships between social disadvantage, local and regional opportunity structures, and individual agency in rural peripheries in Czechia and eastern Germany from a comparative perspective. It focuses on two sets of research questions. The first set concerns the quantitative patterns of social disadvantage and spatial disadvantage in rural areas. The second set asks about the impact of opportunity structures as part of the residential context on particularly disadvantaged groups in four case study regions. The project applies theories of peripheralization and rural restructuring, and considers social networks and individual agency. Area-level secondary data and accessibility analyses and qualitative case studies, including ego-centered network analyses and GPS mapping of time-space activity patterns, are used.
    Keywords: Social disadvantage,peripheralization,rural areas,rural peripheries,rural restructuring,opportunity structure,social networks,agency
    Date: 2021
  16. By: Zarina Adilkhanova (NAC Analytica, Nazarbayev University)
    Abstract: This paper studies the effect of spatial agglomeration on firms' total factor productivity in Kazakhstan using panel data from 2009 to 2017. We employ a two-stage estimation strategy and control for endogeneity biases by making use of the GMM approach. The results suggest that productivity increases with clustering: a 10% increase in the number of employees of the neighboring firms inside the same industry increases firm-level productivity by 1.36%, while a 10% increase in the employment in other industries enhance firm performance by 1.95%. The productivity gains are higher at the 2-digit regional level rather than at the 9-digit sub-regional level of geographical aggregation, implying that the denser geography increases firms' performance more than in the observed geography.
    Keywords: Agglomeration economies; Total Factor Productivity; Spatial Concentration; Clusters
    JEL: C23 R10 R11 R12 R15
    Date: 2020–12
  17. By: Fatime Barbara Hegyi (European Commission - JRC); Francesco Prota (University of Bari "Aldo Moro")
    Abstract: Besides providing a literature review on monitoring and evaluation of Smart Specialisation, this publication offers an overview of a research project run by the Smart Specialisation platform to gain insight on the Smart Specialisation policy experience across the EU in its 7th year of implementation. In particular, this project has analysed whether the principles of Smart Specialisation as regards to monitoring and evaluation hold true in practice from the experiences gained during the 2014-2020 programming period. Thus, our analysis aims to evaluate the efficiency and effectiveness of monitoring and evaluation systems of national and regional authorities implementing Smart Specialisation strategies. In addition, based on the literature review and on the evidence gathered by the project, this publication draws some policy lessons with reflections for the 2021-2027 European Union Cohesion policy as regards to monitoring and evaluation. The importance of assessing the experience of the 2014-2020 programming period and the approach adopted by national and regional authorities in charge of Smart Specialisation derives from the consideration that Smart Specialisation has been the largest place-based policy experiment attempting to boost economic growth through prioritisation of research and innovation domains and through diversification. Smart Specialisation has been defined as an ex-ante conditionality for using European Development Funds (ERDF) under Thematic Objective 1 (research and innovation). Over 120 Smart Specialisation strategies have been implemented during the 2014-2020 programming period, having had guided the investment of over EUR 40 billion from ERDF (over EUR 65 billion including national co-financing). Various sources of primary information have been used to perform this analysis: a survey addressed to S3 implementing authorities, analysis of implementation measures and case study reports. Out of the 120 existing Smart Specialisation strategies, the survey has been filled out by 79 national or regional implementing authorities from nineteen countries while the case studies cover thirteen regional and 4 national strategies and their implementation practices. Four main themes have been explored besides this publication: impact of smart specialisation on the governance of research and innovation policy systems (Guzzo and Gianelle), entrepreneurial discovery process (Perianez-Forte and Wilson, 2021) and policy implementations (Gianelle et al., 2021). From the evidence on monitoring and evaluation, we could deduct that Smart Specialisation represent a cultural change for most regions, whether developed and already well acquainted with regional innovation policy practices or less developed with lower innovation performance. S till, the practice of policy monitoring and evaluation continues to lag behind, which in turn limit learnings and an updated strategy that is based on S3 policy outcomes and impact. It is necessary to identify a dedicated team responsible for S3 monitoring and evaluation within the public administration (equipped with adequate human and financial resources), in order to have an evaluation of the S3 results and the effectiveness of the policy intervention logic. In order to support evaluation activities, it is important to collect data relating to the behaviour of innovation actors, even those not represented in regional calls. While in view of the next programming period, it is necessary to make use of analytical and informative tools (big data, web semantics, etc.) able to provide different kind of data and faster return.
    Keywords: mart specialisation, monitoring, evaluation, assessment, research and innovation, policy implementation, policy evaluation
    Date: 2021–03

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