nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒02‒28
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Agglomeration and Technological Specialization By Basheer Kalash
  2. Geography, Growth and Inequalities: Market Failures and Public Policy Implications By Benjamin Montmartin
  3. The Agglomeration of Urban Amenities: Evidence from Milan Restaurants By Marco Leonardi; Enrico Moretti
  4. Residential mobility and unemployment in the UK By Langella, Monica; Manning, Alan
  5. Localization Economies and Firm Productivity: Evidence from Football Teams in Sao Paulo, Brazil By Brad R. Humphreys; Amir B. Ferreira Neto
  6. Digitalisation in Italy: evidence from a new regional index By Andrea Benecchi; Carlo Bottoni; Emanuela Ciapanna; Annalisa Frigo; Aldo Milan; Elisa Scarinzi
  7. Territorial disparities in youth labour market chances in Europe By Ruggero Cefalo; Rosario Scandurra
  8. Costs of Living and Real Incomes in the Russian Regions By Gluschenko, Konstantin
  9. Economic geography of contagion: A study on Covid-19 outbreak in India By Chakraborty, Tanika; Mukherjee, Anirban

  1. By: Basheer Kalash (Université Côte d'Azur; GREDEG CNRS; Sciences Po, OFCE, France)
    Abstract: Notable attention has been given to the relationship between agglomeration and innovation. However, there is a lack of evidence of how agglomeration affects the type of innovation produced. This study aims to causally assess the impact of a change in agglomeration economies, via transportation improvements, on regional technological specialization. It investigates this relationship using the inauguration of the Öresund Bridge between Sweden and Denmark in 2000 as a quasi-experiment for a difference-in-difference approach. It considers the Öresund area, which consists of Copenhagen and the Swedish Skåne, as the treated regions and the other regions in Denmark and Sweden as a control group. The International Patent Classification (IPC) codes of European Patent Office (EPO) applications are employed to define technology classes for 30 NUTS-3 regions in Sweden and Denmark from 1988 to 2011. The results show that the opening of the Öresund bridge led to an increase in Skåne's highly cited patent technology classes, but no significant change in the specialization of Copenhagen. The results suggest that changes in regions' specializations are not only dependent on the quality of patent technology classes but are also region-specific.
    Keywords: Agglomeration, technological specialization, Öresund, transportation infrastructure, innovation
    JEL: O31 O33 R11
    Date: 2022–01
  2. By: Benjamin Montmartin (SKEMA Business School; Université Côte d'Azur; OFCE Sciences.Po; GREDEG CNRS)
    Abstract: We propose a unique market and social planner solution for a generalized new economic geography and growth model that highlights the importance of taking into account the existence of agglomeration externalities in the analysis of market failures and public policies. Our model disentangles the underinvestment in R&D and the suboptimal growth link present in the previous endogenous growth model. Consequently, our framework allows the market economy to reach various steady-state situations. By evaluating the effects of two strategic policies implemented in the European Union, namely, an innovation and a cohesion policy, we highlight that the complementarity or substitutability of these policies to bring the economy closer to its optimum is directly related to the hypothesis made on the link between agglomeration and growth.
    Keywords: Agglomeration, growth, spatial income inequality, innovation and cohesion policies
    JEL: F43 H50 R12
    Date: 2022–01
  3. By: Marco Leonardi; Enrico Moretti
    Abstract: In many cities, restaurants and retail establishments are spatially concentrated. Economists have long recognized the presence of demand externalities that arise from spatial agglomeration as a possible explanation, but empirically identifying this type of spillovers has proven difficult. We test for the presence of agglomeration spillovers in Milan's restaurant sector using the abolition of a unique regulation that until recently restricted where new restaurants could locate. Before 2005, Milan mandated a minimum distance between restaurants that kept the spatial distribution of restaurants artificially uniform. As a consequence, restaurants were evenly distributed across neighborhoods. The regulation was abolished in 2005 by a nationwide reform that allowed new restaurants to locate anywhere in the city. Using administrative data on the universe of restaurants and retail establishments in Milan between 2000 and 2012, we study how the spatial distribution of restaurants changed after the reform. Consistent with the existence of significant agglomeration externalities, we find that after 2005, the geographical concentration of restaurants increased sharply. By 2012, 7 years after the liberalization of restaurant entry, the city's restaurants had agglomerated in some neighborhoods and deserted others. By contrast, not much happened to the spatial concentration of retail establishments or even retail establishments that sell food, which were never covered by the minimum distance regulations and therefore were not directly affected by its reform. We also find that in neighborhoods where the number of restaurants grew the most after the reform, restaurants reacted to the increased competition by becoming more differentiated based on price, quality and type of cuisine.
    JEL: F1 J0 R0
    Date: 2022–01
  4. By: Langella, Monica; Manning, Alan
    Abstract: The UK has suffered from persistent spatial differences in unemployment rates for many decades. A low responsiveness of internal migration to unemployment is often argued to be an important cause of this problem. This paper uses UK census data to investigate how unemployment affects residential mobility using small areas as potential destinations and origins and four decades of data. It finds that both in- and out-migration are affected by local unemployment - but also that there is a very high ‘cost of distance’, so most moves are very local. We complement the study with individual longitudinal data to analyse individual heterogeneities in mobility. We show that elasticities to local unemployment are different across people with different characteristics. For instance, people who are better educated are more sensitive, the same applies to homeowners. Ethnic minorities are on average less sensitive to local unemployment rates and tend to end up in higher unemployment areas when moving.
    Keywords: residential mobility; regional inequality; unemployment; ES/N012259/1
    JEL: J60 R23 Z10
    Date: 2022–04–01
  5. By: Brad R. Humphreys (West Virginia University); Amir B. Ferreira Neto (Florida Gulf Coast University)
    Abstract: Agglomeration economies affect urban economic outcomes. We analyze variation in sports team productivity and localization of teams across divisions and cities in Campeonato Paulista an annual football competition in São Paulo state, Brazil, exploiting plausibly exogenous variation in localization generated by a promotion and relegation system in this league. Results show that both urbanization, proxied by population, and localization affects short and long run team productivity. These results provide new evidence on the importance of localization economies in the urban economy in developing countries and shed light on why sports teams in larger cities enjoy more success than those in smaller cities.
    Keywords: Agglomeration, urbanization, localization, sports league outcomes, Elo rankings
    JEL: R12 Z21
    Date: 2020–07
  6. By: Andrea Benecchi (Bank of Italy); Carlo Bottoni (Bank of Italy); Emanuela Ciapanna (Bank of Italy); Annalisa Frigo (Bank of Italy); Aldo Milan (AGCOM); Elisa Scarinzi (Bank of Italy)
    Abstract: The geographic digital divide has a significant, though largely unexplored, dimension within a country. This paper proposes an index of digital development for the Italian NUTS2 regions (rDESI) based on the European Commission’s Digital Economy and Society Index (DESI). The rDESI monitors the regional digital divide across five dimensions: (i) the infrastructure and the network usage (connectivity), (ii) the population’s digital skills, (iii) the use of internet services by households, (iv) the integration of ICT by firms, and (v) the level of digital services offered by local government. Southern regions tend to lag behind in most of these dimensions, even if infrastructures and the quality of connectivity appears quite homogeneous across the country. In the last part of the paper, we highlight the limitations of the DESI methodology, proposing some improvements.
    Keywords: digitalization, connectivitym DESI, regional divergence
    JEL: C43 C80 L96 R10
    Date: 2021–12
  7. By: Ruggero Cefalo (Universität Wien); Rosario Scandurra (UAB - Universitat Autònoma de Barcelona)
    Abstract: Comparative research on youth employment has mostly focused on differences between countries or regimes of youth transitions. The territorial differentiation below country level has been less explored, notwithstanding the potential impact on youth-life chances and the territorial cohesion of the European Union. This paper aims at deepening into the investigation of regional variations in patterns of youth labour market chances. To do this, we build on a composite indicator measuring regional youth labour market integration (YLMI) as a comprehensive measure of contextual fragilities (or strengths) of regional youth labour markets. We provide both comparative and longitudinal views over 15 years (2004–18). Furthermore, we explore the impact of contextual factors related to economic conditions, labour market and demographic trends on the regional patterns of youth integration in the labour market.
    Keywords: abour market transitions,European Union regions,regional divide,migration,employment,Cohesion Policy
    Date: 2021
  8. By: Gluschenko, Konstantin
    Abstract: Comparisons of well-being indicators in monetary terms across regions of a country do not provide insights into actual differences in well-being. The reason is variability of price levels across regions, especially in large countries like Russia. Thus, the indicators should be adjusted to the regional price levels, which, in turn, poses a problem of estimating such levels. In Russia, official data on price levels (termed cost-of-living indices) are available; however, they are by city/town rather than by region, so being unsuitable for regional studies. This paper describes the methodology of aggregating the city cost-of-living indices to the regional ones and presents the results obtained for 2016–2020. These results serve as a mean for estimation of price-adjusted regional incomes per capita (regional real incomes). As can be expected, taking account of regional costs of living smooths to some extent the pattern of regional inequality. A comparison of the European and Asian parts of Russia suggests that real income per capita in the latter permanently remains lower than in the former.
    Keywords: spatial price index regional price level cross-region income comparison price-adjusted income
    JEL: D31 R10
    Date: 2022–01–30
  9. By: Chakraborty, Tanika (Indian Institute of Management Calcutta); Mukherjee, Anirban (University of Calcutta)
    Abstract: We propose a regional inequality-based mechanism to explain the heterogeneity in the spread of Covid-19 and test it using data from India. We argue that an area characterized by core-periphery economic structure creates regional inequality in which the periphery remains dependent on the core for the supply of jobs, goods and services. Hence, areas arranged in core-periphery structure induce greater degree of mobility which in turn ends up at a higher infection rate than the more homogeneously developed areas at the time of pandemic. Using nightlights data to measure regional inequality in the degree of economic activity, we find evidence in support of our hypothesis. Further, we find that regions with higher nightlight inequality also experience higher spread of Covid-19 only when lockdown measures have been relaxed and movement of goods and services are near normal. Using mobility data, we provide direct evidence in support of our proposed mechanism; that the positive relationship between regional inequality and Covid-19 infection is driven by mobility. Our findings imply that policy responses to contain Covid-19 contagion needs to be heterogeneous across India where the priority areas can be chosen ex-ante based on inequality in economic activity.
    Date: 2022–01–30

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