nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒08‒23
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Propagation and Amplification of Local Productivity Spillovers By Xavier Giroud; Simone Lenzu; Quinn Maingi; Holger Mueller
  2. Place-based policies - How to do them and why By Südekum, Jens
  3. Does foreign investment hurt job creation at home? The geography of outward FDI and employment in the USA By Crescenzi, Riccardo; Ganau, Roberto; Storper, Michael
  4. Geographical indications and local development: the strength of territorial embeddedness By Crescenzi, Riccardo; De Filippis, Fabrizio; Giua, Mara; Vaquero Pineiro, Cristina
  5. Strategic coupling and regional resilience in times of uncertainty: the industrial chain chief model in Zhejiang, China By Huiwen Gong; Robert Hassink; Cassandra Wang
  6. A Unified Theory of Cities By Jacques-François Thisse; Matthew Turner; Philip Ushchev
  7. Foreign Direct Investment and Labor Productivity in Regional Manufacturing Industry By Erick Rangel González; Luis Fernando López Ornelas
  8. Exploration and Exploitation in US Technological Change By Carvalho, Vasco M.; Draca, Mirko; Kuhlen, Nikolas
  9. Una tipología de las Áreas Económicas Locales de Argentina en base a perfiles sectoriales de coaglomeración territorial (2011-2018) By Niembro, Andrés; Calá, Carla Daniela; Belmartino, Andrea
  10. Regional Governance: Begriffe, Wirkungszusammenhänge und Evaluationsansätze By Pollermann, Kim

  1. By: Xavier Giroud; Simone Lenzu; Quinn Maingi; Holger Mueller
    Abstract: This paper shows that local productivity spillovers propagate throughout the economy through the plant-level networks of multi-region firms. Using confidential Census plant-level data, we show that large manufacturing plant openings not only raise the productivity of local plants but also of distant plants hundreds of miles away, which belong to multi-region firms that are exposed to the local productivity spillover through one of their plants. To quantify the significance of plant-level networks for the propagation and amplification of local productivity shocks, we develop and estimate a quantitative spatial model in which plants of multi-region firms are linked through shared knowledge. Our model features heterogeneous regions, which interact through goods trade and labor markets, as well as within-location, across-plant heterogeneity in productivity, wages, and employment. Counterfactual exercises show that while knowledge sharing through plant-level networks amplifies the aggregate effects of local productivity shocks, it widens economic disparities between individual workers and regions in the economy.
    JEL: C51 C68 E23 E24 L23 O4 R12 R13 R3
    Date: 2021–07
  2. By: Südekum, Jens
    Abstract: Place-based policies had a bad reputation for decades, if they received any attention at all. This has recently changed, for two reasons. First, many countries have experienced political backlashes from rising spatial economic disparities. Populist movements received the highest support in economically backward regions, which had been hit by severe local shocks. By trying to foster spatial economic cohesion, regional policies have become an attempt to insure against those political trends and to save liberal democracies altogether. Second, recent theoretical and empirical research has challenged the leading paradigm of spatial equilibrium analysis, according to which place-based policies are an inefficient interference into the market-based resource allocation. In this paper, I review those arguments and how their balance has changed over time. I argue that the demand for place-based policies is likely to increase in the future, as new digital technologies might reinforce urban-rural divides. But even if the general case for place-based policies now seems to be more widely accepted, the question remains what exactly should be done and which type of programs generate the highest return. Digging through the vast evaluation literature, I try to derive some robust lessons how to conduct place-based policies in practise.
    Date: 2021
  3. By: Crescenzi, Riccardo; Ganau, Roberto; Storper, Michael
    Abstract: Rising political skepticism on the benefits of global economic integration has increased public scrutiny of the foreign activities of domestic firms in virtually all advanced economies. Decisions to invest in new activities abroad are seen by some commentators as potentially detrimental to domestic employment. We contribute to this debate by scrutinizing the relationship between outward ‘greenfield’ Foreign Direct Investments (FDI) and local employment levels. The analysis, at the scale of USA Economic Areas, finds a generally positive link between outward investment and local employment, but with an important range of differences across regions and sectors. Less developed regions benefit the most from the positive returns of outward FDI, and, particularly, from outward FDI if it is undertaken by firms in high-tech manufacturing and services industries. But there is a downside, in the form of increasing intra-regional inequalities between high-skilled and low-skilled workers in these areas.
    Keywords: internationalization; outward FDI; employment; economic areas; USA; The research leading to these results has received funding from the European Research Council under the European Union Horizon 2020 Programme H2020/2014-2020 (Grant Agreement n 639633-MASSIVE-ERC-2014-STG); OUP deal
    JEL: R14 J01
    Date: 2021–04–30
  4. By: Crescenzi, Riccardo; De Filippis, Fabrizio; Giua, Mara; Vaquero Pineiro, Cristina
    Abstract: Can Geographical Indications (GIs) promote local economic development in rural areas? This paper explores the impact of GIs that identify and endorse agri-food products which are strictly embedded within the territory from which they originate. Examining Italian wine protected by GIs through an innovative dataset and by means of propensity score matching and difference-in-differences models make it possible to compare the local economic development trajectories of rural municipalities afforded GIs with the correspondent dynamics of a counterfactual group of similar municipalities without GI status since 1951. Rural municipalities with GIs experience population growth and economic reorganization towards non-farming sectors, which frequently involve higher value-added activities.
    Keywords: geographical Indications;; rural development; EU policies; local development; propensity score matching; difference in differences; 639633-MASSIVE-ERC-2014-STG); H2020 project BATModel; Taylor & Francis deal
    JEL: O18 Q18 R10
    Date: 2021–07–29
  5. By: Huiwen Gong; Robert Hassink; Cassandra Wang
    Abstract: The question of how regions can remain competitive and resilient in times of uncertainty is a central concern for economic geographers. To date, two key concepts— strategic coupling and regional economic resilience—have been used separately to study regional economic dynamics in times of uncertainty. Through a careful examination of the industrial chain chief model in Zhejiang Province, this paper argues that both concepts are essential and should be combined in a coherent manner to better explore the topic of interest. Moreover, it is pointed out that the existing conceptualization of the two concepts suffers from some limitations and a reconceptualization of the two key concepts is needed if economic geographers are to make policy recommendations to local policy-makers.
    Keywords: Regional resilience; strategic coupling; Zhejiang, China; value chains; policy
    Date: 2021
  6. By: Jacques-François Thisse; Matthew Turner; Philip Ushchev
    Abstract: How do people arrange themselves when they are free to choose work and residence locations, when commuting is costly, and when increasing returns may affect production? We consider this problem when the location set is discrete and households have heterogenous preferences over workplace-residence pairs. We provide a general characterization of equilibrium throughout the parameter space. The introduction of preference heterogeneity into an otherwise conventional urban model fundamentally changes equilibrium behavior. Multiple equilibria are pervasive although stable equilibria need not exist. Stronger increasing returns to scale need not concentrate economic activity and lower commuting costs need not disperse it. The qualitative behavior of the model as returns to scale increase accords with changes in the patterns of urbanization observed in the Western world between the pre-industrial period and the present.
    JEL: R0
    Date: 2021–07
  7. By: Erick Rangel González; Luis Fernando López Ornelas
    Abstract: Foreign Direct Investment (FDI) is often identified as a driver of economic growth, although there is no consensus on this topic in the international empirical evidence regarding its effect on labor productivity. This document analyzes the effects of Foreign Direct Investment on labor productivity in the manufacturing sector in Mexico during the 2007-2015 period by using panel data and federative entities as unit of analysis. The estimates are calculated by the generalized method of moments, which allows to consider for possible endogeneity problems. The results indicate a positive and statistically significant effect of FDI as a proportion of manufacturing GDP on the growth rate of labor productivity when the latter is estimated with the Manufacturing Labor Productivity Index published by INEGI. Similar results are found if growth in labor productivity is estimated by using manufacturing GDP per worker, although the latter have less statistical power in some specifications.
    JEL: J01 J24 Q29 R11
    Date: 2021–08
  8. By: Carvalho, Vasco M. (University of Cambridge); Draca, Mirko (University of Warwick and CAGE Research Centre); Kuhlen, Nikolas (University of Cambridge and The Alan Turing Institute)
    Abstract: How do firms and inventors move through ‘knowledge space’ as they develop their innovations? We propose a method for tracking patterns of ‘exploration and exploitation’ in patenting behaviour in the US for the period since 1920. Our exploration measure is constructed from the text of patents find involves the use of ‘Bayesian Surprise’ to measure how different current patent-based innovations are from existing portfolios. Our results indicate that there are distinct ‘life-cycle’ patterns to firm and inventor exploration. Furthermore, exploration activity is more geographically concentrated than general patenting, but this concentration is centred outside the main hubs of patenting.
    Date: 2021
  9. By: Niembro, Andrés; Calá, Carla Daniela; Belmartino, Andrea
    Abstract: El estudio de la especialización productiva regional es clave para diseñar políticas de desarrollo territorial. Sin embargo, las medidas usualmente utilizadas no tienen en cuenta la interdependencia entre actividades y presentan otros problemas relacionados con el nivel de desagregación sectorial empleado. Para superar estas limitaciones, proponemos una nueva forma de definir la especialización regional a partir de técnicas de análisis multivariado, que son aplicadas a datos del total de empleo asalariado registrado en el sector privado de Argentina. Primero, conformamos un conjunto de perfiles sectoriales de coaglomeración territorial y, a partir de ellos, definimos una tipología empírica de Áreas Económicas Locales en función de sus patrones productivos. Los resultados muestran que la metodología propuesta ayuda a capturar interdependencias entre actividades, distinguir dentro de una categoría especializaciones cualitativamente diferentes y dar cuenta tanto del tipo de especialización como del grado de diversidad productiva regional.
    Keywords: Especialización de la Producción; Diversificación de la Producción; Economías de Aglomeración; Análisis Multivariado;
    Date: 2021–04–07
  10. By: Pollermann, Kim
    Abstract: Das Ziel dieser Arbeit ist es, den bisherigen Stand des Wissens zu Regional Governance darzustellen und neu zu systematisieren. Dazu werden die praktischen Möglichkeiten der empirischen Forschung aber auch Restriktionen für Wirkungsanalysen verdeutlicht. Es gibt keine allgemein anerkannte Definition von Governance. Um die Begriffsverwendungen zu schärfen, erfolgt eine Übersicht zu Kritiken am Governance-Begriff. Dies umfasst sowohl auf methodisch-konzeptionelle Probleme als auch 'blinde Flecken' im Governance-Diskurs. Vor diesem Hintergrund erfolgt eine eigene Definition von Regional Governance: Als Governance werden Strukturen und Prozesse zur absichtsvollen Regelung kollektiver gesellschaftlicher Sachverhalte beschrieben, in denen typischerweise Akteur*innen aus Staat, Wirtschaft und Zivilgesellschaft zusammenwirken. Im raumwissenschaftlichen Diskurs hat sich der Begriff Regional Governance fest etabliert. Die Beleuchtung der Wirkungszusammenhänge von Regional Governance zeigt, dass einem umfassenden Wirkungsmodell von Governance ein Art Meta-Theorie zugrunde gelegt werden müsste, was aber an der Überkomplexität scheitert. Es zeigt sich eine doppelte Komplexität: es gilt sowohl die Wirkungszusammenhänge der Governance-Arrangements selbst als auch der Regionalentwicklung insgesamt zu betrachten. Zudem sind charakteristische Phasen von Governance-Prozessen zu beachten. Als eine weitere Strukturierungshilfe der Wirkungszusammenhänge werden Erfolgsfaktoren dargelegt. Als Synthese der bisher praktizierten Ansätze und den in dieser Arbeit gewonnenen Erkenntnissen erfolgen Vorschläge für Kategorisierungen und Indikatoren zur Analyse von Regional Governance. Dazu werden bisher in der Praxis angewandte Untersuchungsdesigns und das dabei genutzte Methodenspektrum erläutert, wobei der Akteurs Zentrierte Institutionalismus eine prominente Rolle spielt. Abschließend werden offene Fragen der Regional-Governance-Forschung thematisiert.
    Keywords: Governance,Regional Governance,Regionalentwicklung,regional development
    JEL: O35 R58
    Date: 2021

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