nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒08‒16
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Advancing the Treatment of Human Agency in the Analysis of Regional Economic Development: Illustrated with Three Norwegian Cases By Grillitsch, Markus; Asheim, Bjørn; Isaksen, Arne; Nielsen, Hjalti
  2. The laws of attraction: Economic drivers of inter-regional migration, housing costs and the role of policies By Orsetta Causa; Michael Abendschein; Maria Chiara Cavalleri
  3. Where cities fail to triumph: the impact of urban location and local collaboration on innovation in Norway By Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
  4. Location choices of Chinese greenfield investments across EU regions: The role of industry and country-of-origin agglomerations By Yifei Wang; Andrea Ascani; Carolina Castaldi
  5. Dynamic Spatial General Equilibrium By Benny Kleinman; Ernest Liu; Stephen J. Redding
  6. Gimme shelter. Public housing programs and industrialization. The INA-casa plan, Italy. By Alberto Dalmazzo; Guido de Blasio; Samuele Poy
  7. Applying Evolutionary Economic Geography beyond case studies in the Global North: Regional diversification in Vietnam By Moritz Breul; Fabio Pruß;
  8. The Geography of Job Tasks By Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
  9. What explains the urban wage premium? Sorting, non-portable or portable agglomeration effects? By Frings, Hanna; Kamb, Rebecca
  10. Regional policies and sectoral outputs in the Italian regions. A multi-input multi-output counterfactual approach. By Gianluigi Coppola; Sergio Destefanis; Giorgia Marinuzzi; Walter Tortorella

  1. By: Grillitsch, Markus (CIRCLE, Lund University); Asheim, Bjørn (University of Stavanger); Isaksen, Arne (Universit of Agder); Nielsen, Hjalti (Lund University)
    Abstract: Human agency has become a core topic in economic geography complementing traditional, structural approaches to explain regional development. This paper contributes firstly with a discussion of the theoretical and conceptual relationships between the agency of individuals, organizations, and systems. Secondly, it proposes a novel analytical framework for studying how human agency, combined with external changes affects regional economic development, and how regional structural preconditions and external changes explain the activation of change agency. Thirdly, the relevance of the framework is examined through comparative studies of about 20 years of industrial development in three Norwegian regions. This illuminates the importance of human agency in regional transformation processes, how regional preconditions influence but not determine the activation of change agency, as well as why and how regional policy plays a role in the emergence of change agency. Yet, future research needs to investigate the context conditions, which promote or hinder the activation of change agency, to trace changes in economic activities over time and link it to causal mechanisms, and to pay attention to the unintended consequences of change agency in the longer-term.
    Keywords: human agency; regional development; structural transformation
    JEL: L60 O10 O30 R11 R58
    Date: 2021–08–09
  2. By: Orsetta Causa; Michael Abendschein; Maria Chiara Cavalleri
    Abstract: This paper sheds light on inter-regional migration, housing and the role of policies, drawing on a new comparative cross-country approach. The results show that OECD countries exhibit stark variation in both levels and trends in inter-regional migration, which is found to be highly responsive to local housing and economic conditions. In turn, a large number of policies in the area of housing, labour markets, social protection and product markets influence the responsiveness of inter-regional migration to local economic conditions. For instance, more flexible housing supply makes inter-regional migration more responsive to local economic conditions while higher regulatory barriers to business start-ups and entry in professions significantly reduce the responsiveness of inter-regional mobility to local economic conditions. The capacity of workers to move regions in response to local economic shocks is one key dimension of labour market dynamism which could, at the current juncture, contribute to the recovery from the COVID-19 crisis. In this context, the paper proposes articulating structural with place-based policies to help prospective movers as well as stayers.
    Keywords: housing markets, Internal migration, labour markets, place-based policies, regional disparities, regional economic conditions, regional house prices, regional mobility, social protection, structural policies
    JEL: R23 R12 R50 R58 J61 H20
    Date: 2021–08–13
  3. By: Fitjar, Rune Dahl; Rodríguez-Pose, Andrés
    Abstract: The role of cities in fostering innovation has for long been taken for granted. Agglomeration and the knowledge spillovers generated in dense urban environments have been considered fundamental drivers of innovation. This view has, however, become challenged by research questioning the returns to physical agglomeration and local networking, placing instead more emphasis on the importance of interregional and international collaboration, and on innovation in peripheral regions. This paper delves into the debate on the role of cities for innovation by examining the interplay between urban location and local collaboration in Norway. It uses data from the Community Innovation Survey for 2006–2010 to map out the geographical dimension of R&D collaboration in Norwegian firms with a view to assessing whether different types of R&D collaboration in urban and rural locations affect firms’ propensity to innovate. The results show that local collaboration is associated with increased process and organisational innovation, while it does not produce higher levels of product or marketing innovation. Conversely, international collaboration is connected with higher probabilities of product, new-to-market and marketing innovations. Furthermore, location in urban or rural areas makes no difference for most innovation outcomes in Norway when other characteristics are controlled for. Location in cities also does not shape the returns to local R&D collaboration. Hence, the role of cities for innovation in Norway, whether in themselves or as sites for dense local interaction, is less relevant than the urban innovation literature would predict.
    Keywords: innovation; firms; networking; collaboration; cities; Norway; 209761
    JEL: L25 O31 O33
    Date: 2020–01–01
  4. By: Yifei Wang (Utrecht University); Andrea Ascani (Gran Sasso Science Institute); Carolina Castaldi (Utrecht University)
    Abstract: We model the impact of public housing supply on local development by using a spatial equilibrium model with a “share-altering†technological shift from agriculture to manufacturing. The model shows that a larger local availability of houses triggers greater population growth and, consequently, industrialization. It also suggests that these effects are stronger in places that exhibited, prior to the public housing plan, relatively higher population density. These implications are broadly confirmed by an empirical evaluation of the INA-Casa plan, a program implemented by the Italian government in the aftermath of WWII.
    Keywords: industry agglomeration, country-of-origin, agglomeration, multinational enterprises, foreign direct investment, China
    JEL: F23 L20 R30
    Date: 2021–07
  5. By: Benny Kleinman; Ernest Liu; Stephen J. Redding
    Abstract: We develop a dynamic spatial general equilibrium model with forward-looking investment and migration decisions. We characterize analytically the transition path of the spatial distribution of economic activity in response to shocks. We apply our framework to the reallocation of US economic activity from the Rust Belt to the Sun Belt from 1965-2015. We find slow convergence to steady-state, with US states closer to steady-state at the end of our sample period than at its beginning. We find substantial heterogeneity in the effects of local shocks, which depend on capital and labor dynamics, and the spatial and sectoral incidence of these shocks.
    JEL: F14 F15 R12
    Date: 2021–07
  6. By: Alberto Dalmazzo (University of Siena); Guido de Blasio (Bank of Italy); Samuele Poy (University of Piemonte Orientale)
    Abstract: We model the impact of public housing supply on local development by using a spatial equilibrium model with a “share-altering†technological shift from agriculture to manufacturing. The model shows that a larger local availability of houses triggers greater population growth and, consequently, industrialization. It also suggests that these effects are stronger in places that exhibited, prior to the public housing plan, relatively higher population density. These implications are broadly confirmed by an empirical evaluation of the INA-Casa plan, a program implemented by the Italian government in the aftermath of WWII.
    Keywords: housing policy, urbanization, industrialization
    JEL: O14 R11
    Date: 2021–06
  7. By: Moritz Breul; Fabio Pruß;
    Abstract: Hitherto, the path-dependent understanding of regional diversification in Evolutionary Economic Geography (EEG) has drawn largely on insights into industrialized countries. However, in the past few decades several regions in the Global South have undergone rapid structural transformations despite starting out with unfavourable regional asset bases. This raises the question as to whether the strong emphasis on endogenous capabilities in EEG also provides a sound theoretical framework for explaining these tremendous diversification dynamics. This paper therefore aims to re-evaluate the wider validity of the path-dependent conceptualization of regional diversification in the context of a lower-middle income economy. To this end, we analyse the diversification of Vietnamese regions between 2006 and 2015. In order to take into account context-specific conditions that characterize Vietnam’s economy, we add the role of foreign-owned firms and state-owned enterprises to the conceptualization of regional diversification processes. While the role of relatedness holds true for Vietnam, the presence of foreign- owned firms allowed Vietnamese regions to break away from path dependency and diversify to unrelated industries. The findings highlight that only by adapting the analysis to context-specific conditions are we able to understand how regional diversification takes place across different settings.
    Keywords: Regional diversification, relatedness, Evolutionary Economic Geography, path creation, Vietnam
    Date: 2021–07
  8. By: Enghin Atalay; Sebastian Sotelo; Daniel Tannenbaum
    Abstract: The returns to skills and the nature of work differ systematically across labor markets of different sizes. Prior research has pointed to worker interactions, technological innovation, and specialization as key sources of urban productivity gains, but has been limited by the available data in its ability to fully characterize work across geographies. We study the sources of geographic inequality and present new facts about the geography of work using online job ads. We show that the (i) intensity of interactive and analytic tasks, (ii) technological requirements, and (iii) task specialization all increase with city size. The gradient for tasks and technologies exists both across and within occupations. It is also steeper for jobs requiring a college degree and for workers employed in non-tradable industries. We document that our new measures help account for a substantial portion of the urban wage premium, both in aggregate and across occupation groups.
    JEL: J20 J24 R12 R23
    Date: 2021–08–09
  9. By: Frings, Hanna; Kamb, Rebecca
    Abstract: Using administrative data for West Germany, we study the relative importance of different determinants of the urban wage premium. More explicitly, we distinguish worker sorting, as well as portable and non-portable agglomeration effects. Our results indicate that worker sorting explains about two thirds of the urban-rural wage gap. We show that the estimated fraction of the urban wage premium attributed to worker sorting differs considerably depending on the selectivity of the sample used for identification and provide guidance how this selectivity can be reduced. Agglomeration effects explain about one third of the urban wage premium, with portable and non-portable agglomeration effects being of similar importance.
    Keywords: Urban wage premium,sorting,agglomeration
    JEL: R23 J31 J60
    Date: 2021
  10. By: Gianluigi Coppola (University of Salerno); Sergio Destefanis (University of Salerno); Giorgia Marinuzzi (IFEL); Walter Tortorella (IFEL)
    Abstract: We assess the impact of various types of regional policies on the economies of the 20 Italian administrative regions for the 1994-2016 period. Differently from previous works, we assess the impact of various policy funds in four sectors (agriculture, industry, construction, services) through a multi-input multioutput transformation function, and we estimate the policies’ average partial effects through a control function approach incorporating the funds’ allocation rules. Our evidence implies that European Structural Funds had a significant impact on various sectoral components of regional GDP per capita, with the ERDF taking the strongest role. Furthermore, the effectiveness of European Structural Funds is weaker for services, and stronger for industry and (to a lesser extent) agriculture. Nationally funded regional policies do not have any aggregate impact but affect the sectoral composition of GDP.
    Keywords: European Structural Funds, control function approach, sectoral development, multi-output multiinput transformation functions
    JEL: C43 D24
    Date: 2021–05

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