nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒05‒23
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Economics of Spatial Mobility: Theory and Evidence Using Smartphone Data By Yuhei Miyauchi; Kentaro Nakajima; Stephen J. Redding
  2. Innovation catalysts: how multinationals reshape the global geography of innovation By Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
  3. The Role of Clusters in the Performance of the Mexican Economy By Miriam Juárez-Torres; Jonathan Puigvert; Francisco Zazueta-Borboa
  4. Group-theoretic Study of Economic Agglomerations on a Square Lattice By Kogure, Yosuke; Ikeda, Kiyohiro
  5. City Minimum Wages and Spatial Equilibrium Effects By Jorge Pérez Pérez
  6. Impacts of Increased Chinese Imports on Japan’s Labor Market: Firm and Regional Aspects By HAYAKAWA Kazunobu; ITO Tadashi; URATA Shujiro

  1. By: Yuhei Miyauchi (Boston University); Kentaro Nakajima (Hitotsubashi University); Stephen J. Redding (Princeton University)
    Abstract: Using smartphone geographical positioning systems (GPS) data for Japan, we show that travel within urban areas frequently occurs along trip chains, involving multiple stops as part of a single journey. Motivated by these empirical findings, we develop a tractable theoretical model of travel itineraries, in which agents choose a set and sequence of locations to visit each day. To overcome the resulting high-dimensionality of the choice set, we develop an approach based on importance sampling. We show that trip chains introduce consumption externalities across locations. We show that these consumption externalities are central to explaining the collapse in foot traffic in downtown areas following the shift to remote working during the Covid-19 pandemic.
    Keywords: Spatial Mobility, Cities, Economic Geography
    JEL: O18 R12 R40
    Date: 2022–04
  2. By: Crescenzi, Riccardo; Dyevre, Arnaud; Neffke, Frank
    Abstract: We study whether and when Research and Development (R&D) activities by foreign multinationals facilitate the formation and growth of new innovation clusters. Combining information on nearly four decades’ worth of patents with socio‐economic data for regions that cover virtually the entire globe, we use matched difference‐in‐differences estimation to show that R&D activities by foreign multinationals have a positive causal effect on local innovation rates. This effect is sizeable: over a five‐year period, foreign research activities help a region climb 14 centiles in the global innovation ranks. This effect materializes through a combination of knowledge spillovers to domestic firms and the attraction of new foreign firms to the region. However, not all multinationals generate equal benefits. In spite of their advanced technological capabilities, technology leaders generate fewer spillovers than technologically less advanced multinationals. A closer inspection reveals that technology leaders also engage in fewer technological alliances and exchange fewer workers with local firms abroad than less advanced firms. Moreover, technology leaders tend to set up their foreign R&D activities in regions with lower levels of economic development than less advanced firms, yet with comparable public sector research capacity. These findings suggest that multinationals with high levels of technological sophistication face comparatively unfavorable tradeoffs between the costs and benefits of local spillovers, underscoring the importance of understanding corporate strategy when analyzing innovation clusters.
    Keywords: innovation; regions; foreign direct investment; patenting; cluster emergence; European Union Horizon 2020 Program H2020/2014‐2020) (Grant Agreement n 639633‐MASSIVE‐ERC‐ 2014‐STG; T&F deal
    JEL: O32 O33 R11 R12
    Date: 2022–04–21
  3. By: Miriam Juárez-Torres; Jonathan Puigvert; Francisco Zazueta-Borboa
    Abstract: This paper follows an algorithm that considers different dimensions of linkages across service and manufacturing industries to identify a cluster configuration of the Mexican economy and analyze their role in the economic performance of regions. It identifies 24 clusters and analyzes their geographical distribution, their role in regional growth, the evolution of their employment concentration, and their spillover effects. The main findings suggest that manufacturing-oriented clusters have a strong presence in the Northern states of the country, while services-oriented clusters in the Central ones. Finally, clusters such as plastic products manufacturing; retail and eating services; food and beverage manufacturing; and, automotive show relatively high direct and indirect spillover effects on the economy.
    JEL: L60 L80 O54
    Date: 2022–04
  4. By: Kogure, Yosuke; Ikeda, Kiyohiro
    Abstract: The present paper aims to elucidate the mechanism of economic agglomerations in two-dimensional economic spaces equipped with square road networks, which prosper worldwide (e.g., Chicago and Kyoto). A series of theoretical approaches provided in the present thesis makes it possible to investigate the spatial patterns of economic agglomerations on such spatial platforms systematically. The present paper focuses on square distributions on the square lattice economy, which has not somewhat been given much attention. We apply group-theoretic predictions to the investigation of bifurcation behavior of economic geography models. The present paper provides a systematic analysis procedure that is applicable to a wide range of economic geography models.
    Keywords: bifurcation, economic agglomeration, economic geography, group-theoretic bifurcation theory, invariant pattern, local-global system, replicator dynamics, square lattice.
    JEL: C02 R4
    Date: 2022–04–24
  5. By: Jorge Pérez Pérez
    Abstract: This paper studies the effect of minimum wage changes on spatial equilibriums in local labor markets. Using data for the U.S. and minimum wage variation across state borders, I analyze how commuting, residence, and employment locations change in response to local minimum wage changes. I find that areas where the minimum wage increases receive fewer low-wage commuters. I formulate a spatial equilibrium model and calculate counterfactuals with a higher minimum wage for U.S. cities considering an increase. For small minimum wage increases, most counties would receive higher low-wage commuting and have fewer low-wage residents. As minimum wage increases are larger, there are higher low-wage commuting reductions driven by employment relocation.
    JEL: J31 J38 R23
    Date: 2022–03
  6. By: HAYAKAWA Kazunobu; ITO Tadashi; URATA Shujiro
    Abstract: Using firm/plant-level data from the Census of Manufacture, this study investigates the impact of Chinese import competition, focusing on different effects based on firm characteristics and regional factors. We find that import competition from China harms Japanese firms’ survival ratios, with the negative impacts being especially strong for smaller firms. Subcontractors are also more vulnerable to Chinese import competition. However, subcontractors in metropolitan areas experience lesser negative impact. In terms of the effects on firm employment, import competition from China had a negative impact, but no statistically significant difference exists based on firm size or whether firms are subcontractors. Firms with overseas affiliates in China or multiple domestic plants reduced their employment in Japan. Moreover, plants in Tokyo, Aichi, and Osaka areas have been particularly inflicted an adverse effect.
    Date: 2022–04

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