nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒09‒20
eleven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The impact of the six European Key Enabling Technologies (KETs) on regional knowledge creation By Colin Wessendorf; Alexander Kopka; Dirk Fornahl
  2. Designing Smart Specialization Policy: relatedness, unrelatedness, or what? By Ron Boschma; ;
  3. The Geography of Breakthrough Innovation in the United States over the 20th Century By Christopher Esposito; ;
  4. Unbalanced Growth in the Labourscape: explaining regional employment divergence By Sobyra, Robert; Sigler, Thomas; Charles-Edwards, Elin
  5. Technology, resources and geography in a paradigm shift: the case of Critical & Conflict Materials in ICTs By Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
  6. Spatial and social mobility in England and Wales: a sub-national analysis of differences and trends over time By Buscha, Franz; Gorman, Emma; Sturgis, Patrick
  7. Entrepreneurial Migration By Bryan, Kevin; Guzman, Jorge
  8. Homeowner Subsidies and Suburban Living: Empirical Evidence from a Subsidy Repeal By Alexander Daminger
  9. Housing Yields By Stefano Colonnello; Roberto Marfè; Qizhou Xiong
  10. Estimating the Economic Impact of Large Hydropower Projects: A Dynamic Multi-regional Computable General Equilibrium Analysis By Hongzhen Ni; Jing Zhao; Xiujian Peng; Glyn Wittwer; Genfa Chena
  11. An open source software tool for spatial flow data analysis By Laurent, Thibault; Margaretic, Paula; Thomas-Agnan, Christine

  1. By: Colin Wessendorf; Alexander Kopka; Dirk Fornahl
    Abstract: The European Commission summarized six young General Purpose Technologies (GPTs) under the label of European Key Enabling Technologies (KETs) in 2009. GPTs are broad, pervasive and widely diffused technologies that enable knowledge creation and economic growth. This study analyzes to what extent the KETs’ structural relevance within their regional knowledge bases leads to regional knowledge creation. Additionally, we analyze whether the structural relevance and the regional knowledge presence in KETs interact with regards to regional knowledge creation. The ‘structure’ of a regional knowledge base describes the relation of all knowledge being present within a given region, while ‘structural relevance’ describes a technology’s impact on the structure. Our analysis focuses on the time period from 1986-2015 and includes Germany’s 141 Labor Market Regions (LMRs) as regional spatial units. Our database consists of patent data from which we map the structure of the regional knowledge bases, by constructing technological spaces based on technology co-occurrences on patents. The structural relevance is operationalized with the help of Social Network Analysis (SNA), by measuring the changes that the removal of KETs causes in the structure of technological spaces. Our findings indicate that KETs enable knowledge creation in different ways. They show that the effects of KETs on regional knowledge creation activities are KET-specific. Furthermore, it proves essential to distinguish between ‘knowledge presence’ and ‘structural knowledge relevance’ when addressing the innovation-spawning function of KETs. Thus, for both further research and for policy-making, it is a fundamental requirement to address KET-driven knowledge creation in particular KET-specific ways.
    Keywords: General purpose technologies, GPT, key enabling technologies, KET, regional innovation, regional knowledge base, knowledge space, technological space, technological integration, German regions
    JEL: O31 O33 R11 R58
    Date: 2021–09
  2. By: Ron Boschma; ;
    Abstract: A key objective of Smart Specialization Strategies (S3) is to stimulate related diversification in European regions, rather than unrelated diversification. This chapter will outline the pros and cons of S3 with a prime focus on either related or unrelated diversification. We argue it depends on the specific regional situation which type of S3 to pursue. While there are good reasons to promote related diversification in general, regions may become over-specialized or trapped in a low-complex economy that might warrant a S3 focus on unrelated diversification.
    Keywords: Smart specialization, related diversification, unrelated diversification, regional diversification, complexity
    JEL: O25 O38 R11
    Date: 2021–09
  3. By: Christopher Esposito; ;
    Abstract: Over the 20th century, the geography of breakthrough innovation in the United States – defined as the spatial distribution of the production of patents that are both novel and impactful – underwent three broad changes. At the start of the 20th century, breakthrough innovation was concentrated in populous and knowledge-diverse metropolitan areas. By the 1930s, breakthroughs were created less frequently across the entire country and so their invention had a less distinct geography. The substantial creation of breakthroughs resumed in the 1960s and was once their invention was concentrated in large and knowledge metropolitan areas. However, during the latter part of the century the invention of breakthroughs also frequently involved long-distance collaborations between inventors. In this paper, I document these historical changes to the geography of breakthrough innovation and propose a model to explain why they occurred. The model suggests that the geography of breakthroughs is established by four factors: (1) the prevailing knowledge intensity of breakthrough inventions, (2) the distance- based frictions incurred by technologies used for collaboration, (3) the distance-based frictions incurred by the technologies used for knowledge-sourcing, and (4) the disruptiveness of the regime of technological change. I generate support for the model, and conclude the paper by discussing lessons that the 20th century’s geography of breakthrough innovation provide for anticipating possible futures for the geography of innovation in the 21st century, including in the years beyond COVID-19.
    Date: 2021–09
  4. By: Sobyra, Robert; Sigler, Thomas; Charles-Edwards, Elin
    Abstract: This paper investigates the role of human capital in explaining divergent employment growth within advanced economies. It adds a spatial dimension to William J. Baumol’s theory of ‘unbalanced growth’ by linking it with the concept of ‘job polarization’. We develop a theory of ‘geographical unbalanced growth’ that explains divergent employment trajectories in terms of skill restructuring. The theory is operationalized via a novel shift–share extension, which is applied to Australian data. We find evidence of ongoing regional divergence and for our proposed mechanism. The findings reinforce the importance of active policies to attract high-skilled jobs to non-metropolitan regions.
    Date: 2021–09–15
  5. By: Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
    Abstract: The mining of several critical raw materials – including the so-called ‘conflict minerals’ associated with armed conflict and human rights abuses – and their combination, refining and use in many new advanced electronic products, are providing an important material infrastructure to current technological progress. Relying on text analysis of USPTO patent data between 1976 and 2017, our explorative study provides a methodological and empirical starting point for exploring the technological and geographical linkages between technological paradigms and selected critical and conflict materials (CCMs). Our descriptive analysis finds evidence of a clear association between ICT technologies and CCM intensity over time, and of a striking resource-technology divide in global ICT value chains between value creating and value extracting activities across Global North and Global South and their regions. The paperintends to emphasize the need for a more critical, spatially sensitive approach to studying resource-based technological change to expose the uneven development consequences created, sustained, or mitigated by technological progress.
    Keywords: critical and conflict materials; paradigm shift; technological demand; geography of technology; geography of resource supply
    JEL: O30 Q34 Q55 R11
    Date: 2021–09–01
  6. By: Buscha, Franz; Gorman, Emma; Sturgis, Patrick
    Abstract: Recent studies of social mobility have documented that not only who your parents are, but also where you grow up, substantially influences subsequent life chances. We bring these two concepts together to study social mobility in England and Wales, in three post-war generations, using linked Decennial Census data. Our findings show considerable spatial variation in rates of absolute and relative mobility, as well as how these have changed over time. While upward mobility increased in every region between the mid-1950s and the early 1980s, this shift varied across different regions and tailed off for more recent cohorts. We also explore how domestic migration is related to social mobility, finding that those who moved out of their region of origin had higher rates of upward mobility compared to those who stayed, although this difference narrowed over time.
    Keywords: ES/R00627X/1; ES/V003488/1
    JEL: N0
    Date: 2021–08–30
  7. By: Bryan, Kevin; Guzman, Jorge
    Abstract: We use cross-state business registrations to track the geographic movement of startups with high growth potential. In their first five years, 6.6% percent of these startups move across state borders. Though startup births are concentrated geographically, hubs like Silicon Valley and Boston on net lose startups to entrepreneurial migration. A revealed preference approach nonparametrically identifies the average utility of cities to migrant founders. University towns and startup hubs have low relative utility. This pattern is due neither to vertical sorting nor industrial specialization. The higher-quality startups move to lower-tax, business-friendly cities, while less growth-oriented startups move to low-tax, high-amenity cities.
    Date: 2021–09–08
  8. By: Alexander Daminger
    Abstract: This paper documents effects of a homeownership subsidy’s full repeal on the urban-rural residential location choice. First, I document the distribution of population across space for German labor market regions, using official NUTS-3 level population statistics. These labor market regions usually consist of a city (the urban core) and adjacent counties (the urban hinterlands) connected by commuter flows. Second, using IV-estimations in Difference-in-Differences and Triple-Differences frameworks, I exploit the 2005 repeal of Germany’s lump-sum direct homeownership subsidy “Eigenheimzulage” on changes in this distribution across space. The results indicate that repealing subsidies to homeownership reverses subsidy-induced population flows to the periphery and thus makes regions re-urbanize. Cities’ population gains derive in large parts from families with children and young residents of “building age”, that are no longer able to become homeowners outside the city gates without the subsidy’s support.
    Keywords: homeownership, housing subsidies, residential location choice, suburbanization
    JEL: H24 H30 H71 R23 R28
    Date: 2021–08
  9. By: Stefano Colonnello (Department of Economics, University Of Venice CÃ Foscari; Halle Institute for Economic Research (IWH)); Roberto Marfè (Collegio Carlo Alberto, Turin); Qizhou Xiong (Saïd Business School, University of Oxford)
    Abstract: This paper investigates heterogeneity in residential property yields using rental and sale listings from the largest German internet real estate platform. Equipped with property-level rent-to-price ratios obtained via matching properties for sale and for rent, we show that they strongly co-move with local factors, such as population age structure, industry structure, housing supply rigidities, and the liquidity and size of the housing market. Regional differences are particularly pronounced between globally relevant cities and other areas. However, a large fraction of the variation of rent-to-price ratios can be explained neither by local factors nor by an extensive array of property-specific observable features, pointing to the crucial role of idiosyncratic factors and within-city aggregation economies. We then create a pseudo-panel to examine the time-series dimension of house prices and show that the ability of expectations about discount and rent growth rates impounded in rent-to-price ratios to predict return and rent growth is statistically significant but of limited economic magnitude.
    Keywords: Housing, Rent-to-Price Ratio, Asset Pricing, Agglomeration Economies
    JEL: G12 G51 R31
    Date: 2021
  10. By: Hongzhen Ni; Jing Zhao; Xiujian Peng; Glyn Wittwer; Genfa Chena
    Abstract: This paper uses SinoTERM, a dynamic multi-regional computable general equilibrium model (CGE) of the Chinese economy, to analyze the economic impact of large hydropower development projects. The model features regional labor market dynamics and an electricity subdivision module with substitutability between various types of electricity generation. The results suggest that hydropower development will boost economic growth in the project region. Most sectors in the project region will benefit from the hydropower development while some sectors will suffer a loss in output because of the substantial increase in real wages. Neighboring regions also benefit as a result of increased electricity supply in the operational phase of the proposed hydropower station. The impact of the hydropower development project on the national GDP as a whole is relatively small although positive. However, because of the long lag between the construction and operational phases, the hydropower development project will result in a national welfare loss measured by real household consumption and net foreign liability. Therefore, the project could only be justified if net environmental benefits outweigh this loss.
    Keywords: dynamic CGE model, hydropower development, multiple regions, economic impacts, electricity subdivision module, China
    JEL: C68 O13 R58
    Date: 2021–09
  11. By: Laurent, Thibault; Margaretic, Paula; Thomas-Agnan, Christine
    Abstract: The rapidly increasing dimensionality and throughput of flow data require new tools for analysis and interpretation. This paper provides open source tools for the exploration and analysis of origin-destination spatial flow data. We integrate in a single open source R software tool existing visualization techniques for complex OD flow data, as well as new graphical representations. We discuss implementation of these tools from a practitioner point of view. These tools should help scholars to extract meaningful relations between entities accounting at the same time for the intensity of the movements (or relations) and the geography linking the spatial units
    Date: 2021–09

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