nep-geo New Economics Papers
on Economic Geography
Issue of 2021‒10‒11
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Market Size and Spatial Growth - Evidence from Germany’s Post-War Population Expulsions By Michael Peters
  2. The Impact of Extractive Industries on Regional Diversification: Evidence from Vietnam By Moritz Breul; Thi Xuan Thu Nguyen;
  3. Residential segregation, daytime segregation and spatial frictions : an analysis from mobile phone data By L. GALIANA; B. SAKAROVITCH; F. SÉMÉCURBE; Z. SMOREDA
  4. The Causal Effects of Place on Health and Longevity By Tatyana Deryugina; David Molitor
  5. Local institutions and pandemics: City autonomy and the Black Death By Han Wang; Andres Rodriguez-Pose;
  6. Regional Income Dynamics in Bangladesh: The Road to a Balanced Development is in the Middle By Syed Basher; Francesca Di Iorio; Stefano Fachin
  7. Local Economic Growth and Infant Mortality By Andreas Kammerlander; Günther G. Schulze
  8. Implementing Smart Specialisation Strategies By KELCHTERMANS Stijn; KARDAS Marcin; KLINCEWICZ Krzysztof
  9. Die regionalen Arbeitsmarkteffekte der Covid-19-Pandemie: Nicht nur eine Frage der Wirtschaftsstruktur (The COVID-19 pandemics regional labour market effects: more than just a sectoral shock) By Hamann, Silke; Kropp, Per; Niebuhr, Annekatrin; Roth, Duncan; Sieglen, Georg

  1. By: Michael Peters
    Abstract: Virtually all theories of economic growth predict a positive relationship between population size and productivity. In this paper I study a particular historical episode to provide direct evidence for the empirical relevance of such scale effects. In the aftermath of the Second World War about 8m ethnic Germans were expelled from their domiciles in Eastern Europe and transferred to West Germany. This inflow increased the German population by almost 20%. Using variation across counties I show that the settlement of refugees had a large and persistent effect on the size of the local population, manufacturing employment and income per capita. I show that these findings are quantitatively consistent with an idea-based model of spatial growth if population mobility is subject to frictions and productivity spillovers occur locally. The model implies that the refugee settlement increased aggregate income per capita by about 12% after 25 years and that the historical settlement rule triggered persistent industrialization of rural areas.
    JEL: O11 O4 R11
    Date: 2021–10
  2. By: Moritz Breul; Thi Xuan Thu Nguyen;
    Abstract: Economic diversification is perceived as imperative to reduce resource-dependent economies’ vulnerability to a broader resource curse. Despite its importance, we know surprisingly little about the relationship between natural resource-dependence and economic diversification. The few insights that exist, remain on a country-level. But, since the importance of natural resource extraction differs across regions in the same country, it would be odd to assume that the effects of extractive industries on the diversification performance would be felt evenly countrywide. Also, extractive regions in the same country can manage to develop new non-extractive industries with varying success. Understanding this relationship on a regional level is important in order to identify conditions under which diversification of extractive regions is likely to materialize. This paper therefore aims to bring the study of the relationship between extractive industries and diversification to a regional level. To this end, we analyze how the regional importance of extractive industries has affected the entrance of non-extractive industries to Vietnamese provinces between 2006 and 2010. Furthermore, the study investigates to what extent region-specific conditions – that is the regional industrial profile and institutions - moderate the effect of the regional presence of extractive industries on regional diversification. Our findings reveal that extractive industries tend to constrain non-extractive industry entries on a regional level. However, the results also show that adequate regional institutions can moderate this negative effect on the regional diversification performance. Thereby the study underlines the need and value of studying the relationship between extractive industries and diversification also on a regional level.
    Keywords: Regional diversification, extractive industries, resource curse, relatedness, regional institutions, Vietnam
    Date: 2021–09
  3. By: L. GALIANA (Insee); B. SAKAROVITCH (Insee); F. SÉMÉCURBE (Insee); Z. SMOREDA (Orange Labs, SENSE)
    Abstract: We bring together mobile phone and geocoded tax data on the three biggest French cities to shed a new light on segregation that accounts for population flows. Mobility being a key factor to reduce spatial segregation, we build a gravity model on an unprecedent scale to estimate the heterogeneity in travel costs. Residential segregation represents the acme of segregation. Low-income people spread more than high-income people during the day. Distance plays a key role to limit population flows. Low-income people live in neighbourhoods where the spatial frictions are strongest.
    Keywords: Segregation, big data, phone data, gravity model, urban economics
    JEL: R23 R41 C55
    Date: 2020
  4. By: Tatyana Deryugina; David Molitor
    Abstract: Life expectancy varies substantially across local regions within a country, raising conjectures that place of residence affects health. However, population sorting and other confounders make it difficult to disentangle the effects of place on health from other geographic differences in life expectancy. Recent studies have overcome such challenges to demonstrate that place of residence substantially influences health and mortality. Whether policies that encourage people to move to places that are better for their health or that improve areas that are detrimental to health are desirable depends on the mechanisms behind place effects, yet these mechanisms remain poorly understood.
    JEL: H75 I1 R1
    Date: 2021–10
  5. By: Han Wang; Andres Rodriguez-Pose;
    Abstract: Local institutions have long been regarded as key drivers of economic development. However, little is known about the role of institutions in preparing places to cope with public health crises and pandemics. This paper sheds light on how the nature of a local institution, city autonomy, influenced variations in the incidence of the Black Death —possibly the worst pandemic ever recorded— across cities in Western Europe between 1347 and 1352. We examine urban autonomy not only because it represented a major political shift in medieval times, but because, more importantly, it also represents a key prototype of modern political institutions. By exploiting data on the spatial variation of Black Death’s mortality rates and duration using OLS and 2SLS methods, we uncover that city autonomy reduced mortality rates by, on average, almost 10 percent. Autonomous cities were in a better position to adopt swift and efficient measures against the pandemic than those governed by remote kings and emperors. This relationship has been confirmed by a series of placebo tests and robustness checks. In contrast, there is no evidence to suggest that city autonomy was a factor in reducing the duration of the pandemic in European cities.
    Keywords: Local institutions, pandemics, city autonomy, Black Death, Europe
    JEL: N43 N93 O17
    Date: 2021–09
  6. By: Syed Basher; Francesca Di Iorio (University of Naples Federico II); Stefano Fachin ("Sapienza" University of Rome)
    Abstract: Bangladesh's remarkable achievements in economic and social progress put itself in a position that would have been unthinkable until a few decades ago. But did the improvement in development outcomes accrue equally to all areas in the country? We tackle this question by analyzing district-level income per capita constructed from the 2000 and 2016 rounds of the Household Income and Expenditure Survey. Estimating models based on the standard neoclassical theory of economic convergence built to take into account the impact of natural disasters, we find essentially no evidence of convergence. This implies the persistence of income diff erentials among Bangladesh's 64 districts. To check for the possibility of multiple steady states, we estimated models with a three-club structure based on the year 2000 income percentiles. The results now support the hypothesis of convergence within the group of middle-income districts, with a speed of 1.6% per annum (half-life 43 years), close to Barro's "2% iron law". A remarkable finding is the positive and significant effect of education on this club's steady state income level. Overall, these results are consistent with the notion of a rising middle class in Bangladesh in recent years. We also explore latent club structures using automatic algorithms, but we do not find any further evidence of convergence. The key policy implication of our study is that, to ensure a balanced regional development, it would be, at a minimum, necessary to enact policies extending the convergence process to the club of the poorer districts as well.
    Keywords: Bangladesh, Convergence, Regional income disparity, Middle class.
    JEL: O47 R11
    Date: 2020–11
  7. By: Andreas Kammerlander; Günther G. Schulze
    Abstract: We show, for the first time, a causal effect of local economic growth on infant mortality. We use geo-referenced data for non-migrating mothers from 46 developing countries and 128 DHS survey rounds and combine it with nighttime luminosity data at a granular level. Using mother fixed effects we show that an increase in local economic activity significantly reduces the probability that the same mother loses a further child before its first birthday.
    Keywords: local economic growth, child mortality, nighttime lights
    JEL: I15 O18
    Date: 2021
  8. By: KELCHTERMANS Stijn; KARDAS Marcin; KLINCEWICZ Krzysztof
    Abstract: The report analyses the progress of Member States in the implementation of national and regional smart specialisation strategies (RIS3) in 2017 through an assessment of policy developments, progress in implementation of the different strategies, monitoring mechanisms and observed impacts. Using publicly available data as well as an expert survey, the analysis shows that in most countries RIS3 processes have been conducted at both national and regional levels. The use of thematic priorities for research and innovation, engaging stakeholders and opening up to bottom-up initiatives often implied a radical change to previous policymaking practices. An analysis of RIS3 indicators suggests that a proper ‘priority taxonomy’ is lacking, raising doubts whether countries and regions are truly selective in setting priorities, whether they align the priority setting process between the national and regional level and whether the resulting set of priorities is really a factor of differentiation for countries and regions. The impact of RIS3 as a policy paradigm appears more pronounced among the moderate and modest innovators. The report concludes by highlighting the need for more granular indicators to analyse RIS3 priorities as well as their implementation and impact.
    Keywords: smart specialisation strategies, RIS3
    Date: 2021–09
  9. By: Hamann, Silke (Institute for Employment Research (IAB), Nuremberg, Germany); Kropp, Per (Institute for Employment Research (IAB), Nuremberg, Germany); Niebuhr, Annekatrin (Institute for Employment Research (IAB), Nuremberg, Germany); Roth, Duncan (Institute for Employment Research (IAB), Nuremberg, Germany); Sieglen, Georg (Institute for Employment Research (IAB), Nuremberg, Germany)
    Abstract: "The impact of the COVID-19 pandemic on the labour market has been substantial, but also heterogeneous. This report assesses whether differences in the size of the labour market impact mainly reflect that economic sectors have been differently affected by the pandemic or whether other factors, including regional characteristics, matter once the sectoral structure is accounted for." (Author's abstract, IAB-Doku) ((en))
    Keywords: Bundesrepublik Deutschland ; Pandemie ; Auswirkungen ; Beschäftigungseffekte ; Betriebsgröße ; Arbeitslosigkeitsentwicklung ; regionale Faktoren ; regionaler Arbeitsmarkt ; regionaler Vergleich ; qualifikationsspezifische Faktoren ; sektorale Verteilung ; Arbeitslosenquote ; Arbeitslosigkeit ; Arbeitsmarktregion ; Wirtschaftsstruktur ; Zu- und Abgänge ; 2019-2020
    Date: 2021–08–12

This nep-geo issue is ©2021 by Andreas Koch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.