nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒02‒07
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Agglomeration Economies and the Urban Wage Premium in Australia By Jordy Meekes
  2. Using geolocation data in spatial-econometric construction of multiregion input-output tables: a Bayesian approach By Andrzej Torój
  3. Entries and Regional Growth: The Role of Relatedness By Tijl Hendrich; Jennifer Olsen; Judith Bayer
  4. Spatio-temporal dynamics of European innovation: An exploratory approach via multivariate functional data cluster analysis By Rhoden, Imke; Weller, Daniel; Voit, Ann-Katrin
  5. The importance of global value chains and regional capabilities for the economic complexity of EU-regions By Colozza, Federico; Boschma, Ron; Morrison, Andrea; Pietrobelli, Carlo
  6. A Tale of Two Cities: Communication, Innovation, and Divergence By Stefano Magrini; Alessandro Spiganti
  7. Green Technological Diversification and Local Recombinant Capabilities: The Role of Technological Novelty and Academic Inventors. By Orsatti, Gianluca; Quatraro,Francesco; Scandura, Alessandra
  8. Identifying technological trajectories in the mining sector using patent citation networks By Alessandri, Enrico
  9. Global Innovation and Knowledge Diffusion By Nelson Lind; Natalia Ramondo

  1. By: Jordy Meekes (Melbourne Institute: Applied Economic & Social Research, the University of Melbourne)
    Abstract: Understanding the benefits of dense agglomerations is important for decisions on where to live. This paper is the first to quantify the economic impact of urban density on individual wages, referred to as the urban wage premium, in Australia. By combining Household Income and Labour Dynamics in Australia Survey microdata on 13,112 employed individuals and regional-level population data, population density effects on individual hourly wages are studied over the period 2001 to 2019. A unique feature of this paper is to apply a flow-based clustering algorithm that uses commuting flows to define spatial structures, which are compared with the Australian Statistical Geography Standard spatial structures. The Ordinary Least Squares estimate of the urban wage premium peaks at 2.7 per cent. Controlling for individual fixed effects, the estimate peaks at 1.6 per cent. This evidence suggests that wages increase by 1.6 to 2.7 per cent if local density doubles.
    Keywords: Urban wage premium, Agglomeration, Population density, Wages, Australia, HILDA Survey
    JEL: R11 R12 R23 J31
    Date: 2021–09
  2. By: Andrzej Torój
    Abstract: Interregional input-output tables for Poland at NUTS-3 level are built by using the Bayesian approach to spatial econometric analysis. I apply the multi-equation Durbin specification proposed by Torój (2021) to derive the sample density and Statistics Finland (2006) regional I–O tables to derive the prior hyperparameters. This prior aims to introduce additional information in the presence of noisy spatial data, but also to avoid the areas where the spatial decay profiles representing the supply geography become insensitive to the parameter values of the selected functional form. To measure the distance, the real-world driving distance between the most populated cities of the regions from Google Maps is used. Posterior distrubutions indicate that the agricultural commodities and advanced services are supplied to the most distant locations, whereas the simple services – to the least distant ones; the result for the former group of sectors is characterized with the highest uncertainty. The illustrative simulation indicates that 82.2% of the indirect effects occur in the home region, with a posterior-based confidence interval from 71.5% to 92.4%. The results do not change qualitatively when I use the driving time (averaged over 42 equidistant moments in a 7-day week) as the alternative measure of distance, but the hybrid time- and distance-based model is strongly preferred in the Bayes factor comparison, since for all sectors except industry (NACE sections B-E), the time-based metric turned out to be dominant. When commuting is taken into account in the induced effect calculation (measured with mobile geolocation data), 4.9% of the induced effects are relocated from the home region (central point in a big agglomeration) to the other regions, especially the surrounding ''ring''.
    Keywords: input-output, interregional input-output tables, spatial econometrics, Bayesian estimation, regional economic impact assessment
    JEL: C31 C67 R12 R15
    Date: 2022–01
  3. By: Tijl Hendrich (CPB Netherlands Bureau for Economic Policy Analysis); Jennifer Olsen (CPB Netherlands Bureau for Economic Policy Analysis); Judith Bayer
    Abstract: If new businesses and establishments are more closely related to economic activities taking place in a region, is this associated with higher regional growth a few years later? In this paper, we investigate the relationship between this 'relatedness' of newcomers and growth in employment and labor productivity in Dutch regions. While we find a positive correlation with regional employment growth, its economic magnitude is small. It is known that new companies can stimulate growth through creative destruction: they push existing less productive companies out of the market or force them to produce more efficiently. New companies can also create knowledge spillovers by introducing new ideas or techniques that disseminate on a local scale. The current research examines these two aspects in conjunction. We consider two industries to be related when their employees possess similar skills. It will then be easier for employees to switch jobs and transfer knowledge between these two sectors.
    JEL: L26 M13 O18 R11
    Date: 2022–01
  4. By: Rhoden, Imke; Weller, Daniel; Voit, Ann-Katrin
    Abstract: We apply a functional data approach for mixture model-based multivariate innovation clustering to identify different regional innovation portfolios in Europe. Innovation concentration is considered as pattern of specialization among innovation types. We examine patent registration data and combine them with other innovation and economic data across 225 regions, 13 years and 8 patent classes. This allows us to identify innovation clusters that are supported by several innovation- and economy-related variables. We are able to form several regional clusters according to their specific innovation types. The regional innovation cluster solutions for IPC classes for 'fixed constructions' and 'mechanical engineering' are very comparable, and relatively less comparable for 'chemistry and metallurgy'. The clusters for innovations in 'physics' and 'chemistry and metallurgy' are similar; innovations in 'electricity' and 'physics' show similar temporal dynamics. For all other innovation types, the regional clustering is different and innovation concentrations in the respective regions are unique within clusters. By taking regional profiles, strengths and developments into account, options for improved efficiency of location-based regional innovation policy in order to promote tailored and efficient innovation-promoting programs can be derived.
    Keywords: Functional Data Analysis (FDA),innovation concentration,spatio-temporal cluster modeling,multivariate cluster analysis,European innovation,cluster algorithm
    JEL: O33 R12 C38
    Date: 2021
  5. By: Colozza, Federico (University of Roma Tre); Boschma, Ron (Department of Human Geography and Planning, Utrecht University, and UiS Business School, University of Stavanger); Morrison, Andrea (Department of Political and Social Sciences, University of Pavia, Department of Human Geography and Planning, Utrecht University, and ICRIOS, Bocconi University); Pietrobelli, Carlo (UNU-MERIT, Maastricht University, and University of Roma Tre)
    Abstract: This paper combines various literatures on Global Value Chains (GVC), Economic Complexity and Evolutionary Economic Geography. The objective is to assess the role of regional capabilities and GVC participation in fostering economic complexity in 236 NUTS2-regions in Europe. Our results suggest there is no such thing as a common path of economic upgrading across EU regions. Regions with high economic complexity tend to keep their advantageous positions, as they are capable of benefitting from both regional capabilities (as proxied by a high relatedness between local activities) and external linkages in terms of GVC participation. Conversely, low-complex regions do not benefit from GVC participation, unless their regional capabilities (in terms of relatedness density) are also stronger.
    Keywords: Economic Complexity, Evolutionary Economic Geography, Global Value Chains, Relatedness, Economic Upgrading, EU regions
    JEL: B52 F23 O19 O33 R10
    Date: 2021–12–17
  6. By: Stefano Magrini (Department of Economics, University Of Venice CÃ Foscari); Alessandro Spiganti (Department of Economics, University Of Venice CÃ Foscari)
    Abstract: We present a two-area endogenous growth model where abstract knowledge flows at no cost across space but tacit knowledge arises from the interaction among researchers and is hampered by distance. Digital communication reduces this "cost of distance" and reinforces productive specialization, leading to an increase in the system-wide growth rate but at the cost of more inequality within and across areas. These results are consistent with evidences on the rise in the concentration of innovative activities, income inequality, and skills and income divergence across US urban areas.
    Keywords: Agglomeration, specialization, digital communication, inequality, patents
    JEL: J24 O31 O41 R12
  7. By: Orsatti, Gianluca; Quatraro,Francesco; Scandura, Alessandra (University of Turin)
    Abstract: This paper studies the entry of regions in new green technological specializations, specifically investigating the role of local recombinant capabilities and the involvement of academic inventors in patenting activities, as well as the interplay between the two. We test our hypotheses on a dataset of Italian NUTS 3 regions over the period 1998-2009. The results show that both recombinant capabilities and the presence of academic inventors are positively associated to new entries in green technological specializations, and that their interaction provides a compensatory mechanism in regions lacking adequate novel combinatorial capabilities. The findings of this work are relevant for policy makers involved in the elaboration of successful regional specialization strategies in green technological domains.
    Date: 2021–10
  8. By: Alessandri, Enrico (Bocconi University, Milan, and University of Urbino Carlo Bo, Urbino)
    Abstract: This paper uses patent citation networks to study technological change in the mining industry between 1970 and 2015. The analysis is undertaken at both the aggregate level by jointly considering all mining-related technological fields, and at the micro-level of patents in nine sub-fields, representing specific technological "sub-trajectories". Consistent with previous literature focused on other technological domains, we find that innovation patterns in the mining sector are "technology bounded", i.e. largely shaped by patenting activities carried out in a very limited range of mining technological fields, even though we detect a shift from exploration to environmental mining technologies (emergence of a new technological paradigm). In addition, we examine two aspects of technical change that have been largely disregarded in extant research: the geographical patterns of inventive activities and the role of key applicants in such patterns. We show that core mining patents and leading inventors involved originate almost exclusively from the US, so that trajectories appear to be heavily "geographically bounded", revealing that developing resource-abundant countries lag behind the technological frontier in mining. Moreover, only a few applicant firms are responsible for most inventive activities reflecting a highly concentrated oligopolistic structure, hence characterising trajectories as "applicant bounded". Similar results are observed at the level of sub-trajectories, although with some relevant exceptions, hence suggesting that a substantial heterogeneity exists within the industry and across mining-related technologies.
    Keywords: Technological trajectories, Technological sub-trajectories, Mining technologies, Geography of innovation, Patents, International technological frontier
    JEL: O31 L72 F23 R11
    Date: 2021–12–08
  9. By: Nelson Lind; Natalia Ramondo
    Abstract: We develop a Ricardian model of trade in which countries innovate ideas that diffuse across the globe. In this model, the forces of innovation and diffusion combine to shape trade substitution patterns. Innovation makes a country technologically distinct, reducing their substitutability with other countries, while diffusion between countries generates technological similarity and increases head-to-head competition. In the special case of an innovation-only model where countries do not share ideas, productivities are independent across space, and the demand system is CES. As a consequence, departures from CES expenditure reveal diffusion patterns. Our theoretical results provide a mapping between the dynamics of observable trade flows and the dynamics of innovation and knowledge diffusion.
    JEL: F1 O3
    Date: 2022–01

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