nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒07‒25
nine papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Improving the quality of regional economic indicators: Regional consumer prices By Kevin Connolly; Mairi Spowage
  2. Privatization's Influence on Agglomeration and Selection Effects: Evidence from China's Manufacturing Industry By Yikai Zhao; Jun Nagayasu
  3. Regional perspectives on socio-technical transitions: Combining research insights from geography of innovation and transition studies By Hansmeier, Hendrik; Koschatzky, Knut; Zenker, Andrea; Stahlecker, Thomas
  4. High-tech left behind? Lessons from the Ruhr cybersecurity ecosystem for approaches to develop "left behind" places By Butzin, Anna; Flögel, Franz
  5. Double-edged Trains: Economic outcomes and regional disparity of high-speed railways By YOO Sunbin; KUMAGAI Junya; KAWASAKI Kohei; HONG Sungwan; ZHANG Bingqi; SHIMAMURA Takuya; MANAGI Shunsuke
  6. Developing experimental estimates of regional skill demand By Stef Garasto; Jyldyz Djumalieva; Karlis Kanders; Rachel Wilcock; Cath Sleeman
  7. Favoritism and Firms: Micro Evidence and Macro Implications By Zareh Asatryan; Thushyanthan Baskaran; Carlo Birkholz; David Gomtsyan
  8. Toxic pollution and labour markets: uncovering Europe's left-behind places By Charlotte Bez; Maria Enrica Virgillito
  9. How infrastructure shapes comparative advantage By Quintana, Luis Baldomero

  1. By: Kevin Connolly; Mairi Spowage
    Abstract: Building on previous work this paper provides updated prices and inflation estimates for the twelve NUTS-1 regions of the UK. One key issue previously noted when moving to regional prices estimates is the reduction in LCFS sample size leading to unstable weights. In this paper, we investigate the data sources to produce regional expenditure estimates, attempting to increase the accuracy of CPIH estimates. The primary focus is on the Regional Household Final Consumption Expenditure measure (HFCE) publication for use as estimates for regional expenditure weights. While we were able to update the UK regional CPIH estimates to 2020 using other data sources we still encounter similar problems to Dawber and Smith (2017), with the small sample size of the price databases being problematic for the calculation of CPIH indices.
    Keywords: cpih and inflation, regional prices
    JEL: C60 O11 R11
    Date: 2021–10
  2. By: Yikai Zhao; Jun Nagayasu
    Abstract: We study the impact of state-owned enterprises'(SOE) privatization on how firm productivity responds to agglomeration and selection effects, and investigate whether and how policymakers can utilize agglomeration and selection to benefit from privatization. As SOEs enjoy privileged treatment because of their government ties, we argue that the agglomeration advantages of SOEs are rooted in their connection with local governments who regulate them, who share local information with surrounding SOEs, such as labor markets, resources, and tacit knowledge. Overall, we attempt to answer the following questions: 1) Will the SOEs f reform negatively (positively) influence enterprises' agglomeration (selection) effects? 2) To what extent is this influence affected by the local government? 3) Is this adverse or favorable impact heterogeneous?
    Date: 2022–07
  3. By: Hansmeier, Hendrik; Koschatzky, Knut; Zenker, Andrea; Stahlecker, Thomas
    Abstract: While societal challenges are global in nature, solving and addressing them usually tends to take place at smaller spatial scales. As place-specific technological, institutional and actor settings have a decisive influence on the direction, scope and speed of transformative dynamics, regions vary greatly in the generation and application of innovations required for socio-technical transitions. With a broader understanding of regional innovation systems (RIS), on the one hand, and spatial considerations in transition studies, on the other, geographic research has recently contributed to a better understanding of innovation-based structural and systemic change. At the same time, the research findings are still insufficiently linked with one another. We argue that recent theorizing on expanded regional innovation systems provides additional explanatory power in the context of sys-temic transitions by considering similar aspects, e.g. the role of experimentation and different modes of innovation, yet incorporating a more spatial perspective. Against this background, we show that innovation policies at the regional level seem to be particularly effective when they sup-port innovation dynamics aimed at sustainability through the inclusion of various actor groups and the attention to both the production and application side. Given the increasing spatial disparities in innovation dynamics, however, further research is needed on the opportunities and barriers of different regional settings for sustainability transitions.
    Date: 2022
  4. By: Butzin, Anna; Flögel, Franz
    Abstract: The attention to "left behind" places triggered a debate about alternative development approaches. Unlike prosperous regions and their prioritisation on high-tech sectors, strategies for left behind places should shift to the foundational economy, community-based social innovation and well-being. While supporting this emphasis, we see a tendency to neglect importance of research and teaching in high-tech areas for developing left behind places. Our case study in the old industrial region Ruhr shows, how unrelated initial funding for cutting-edge research sparked the development of today's cybersecurity ecosystem. The ecosystem contributes to a positive identification within the region and a dynamic start-up landscape.
    Keywords: left behind places,entrepreneurial ecosystem,cybersecurity,hightech sectors,regional development
    JEL: O31 O32 O18
    Date: 2022
  5. By: YOO Sunbin; KUMAGAI Junya; KAWASAKI Kohei; HONG Sungwan; ZHANG Bingqi; SHIMAMURA Takuya; MANAGI Shunsuke
    Abstract: We illuminate the causal relationship between high-speed railway (HSR) expansions and economic development, focusing on HSR in Japan–the Shinkansen–from 1983 to 2020. To address endogeneity concerns about HSR station construction, we employ a market access approach that captures both the direct and indirect impacts of HSR expansion. The results show that a 1% increase in HSR market access increases the land price by 0.176%, income by 0.425%, and income per capita by 0.023% of Japan. However, most of the benefits are focused in Tokyo and other developed areas, while the economic growth due to HSR expansion of cities outside these areas is negative or statistically insignificant. We confirm the robustness of the results through the instrumental variable (IV) approach and a series of robustness checks. Next, we conduct counterfactual analyses using regression results to evaluate future Japanese HSR plans: the Linear Shinkansen, regional expansion, and a policy that would implement both. Simulation results reconfirm that future HSR plans will induce economic growth but, at the same time, aggravate regional disparity; thus, the expected economic outcomes may be double-edged.
    Date: 2022–06
  6. By: Stef Garasto; Jyldyz Djumalieva; Karlis Kanders; Rachel Wilcock; Cath Sleeman
    Abstract: This paper shows how novel data, in the form of online job adverts, can be used to enrich social labour market statistics. We use millions of job adverts to provide granular estimates of the vacancy stock broken down by location, occupation and skill category. To derive these estimates, we build on previous work and deploy methodologies for a) converting the flow of job adverts into a stock and b) adjusting this stock to ensure it is representative of the underlying economy. Our results benefit from the use of duration data at the level of individual vacancies. We also introduce a new iteration of Nesta’s skills taxonomy. This is the first iteration to blend an expert-derived collection of skills with the skills extracted from job adverts. These methodological advances allow us to analyse which skill sets are sought by employers, how these vary across Travel To Work Areas in the UK and how skill demand evolves over time. For example, we find that there is considerable geographical variability in skill demand, with the stock varying more than five-fold across locations. At the same time, most of the demand is concentrated among three categories: "Business, law and finance", "Science, manufacturing and engineering" and "Digital". Together, these account for more than 60 per cent of all skills demanded. The type of intelligence presented in this report could be used to support both local and national decision makers in responding to recent labour market disruptions.
    Keywords: big data, labour demand, machine learning, online job adverts, skills, word embeddings
    JEL: C18 J23 J24
    Date: 2021–03
  7. By: Zareh Asatryan; Thushyanthan Baskaran; Carlo Birkholz; David Gomtsyan
    Abstract: We study the economic implications of regional favoritism, a form of distributive politics that redistributes resources geographically within countries. Using enterprise surveys from low- and middle-income countries, we document that firms located close to leaders’ birthplaces grow substantially in sales and employment after leaders assume office. Firms in favored areas also experience increases in sales per worker, wages, and measured total factor productivity. These effects are short-lived, and operate through rising (public) demand for the non-tradable sector. We calibrate a simple structural model of resource misallocation on our estimates. This exercise implies that favoritism reduces output by 0.5% annually.
    Keywords: regional favoritism, firm performance, enterprise surveys, resource misallocation
    JEL: D22 D72 O43 R11
    Date: 2022
  8. By: Charlotte Bez; Maria Enrica Virgillito
    Abstract: This paper looks at the nexus between toxic industrial pollution and the spillovers from the plant's production activities, leading to regional lock-ins. Geolocalised facility-level data from the European Pollutant Release and Transfer Register (E-PRTR) are used to calculate annual chemical-specific pollution, weighted by its toxicity. We combine the latter with regional data on employment, wages and demographics sourced from Cambridge Econometrics, covering more than 1.200 NUTS-3 regions in 15 countries, over the period 2007-2018. We employ quantile regressions to detect the heterogeneity across regions and understand the specificities of the 10th and 25th percentiles, the so-called left-behind places. Our first contribution consists in giving a novel and comprehensive account of the geography of toxic pollution in Europe, both at facility and regional level, disaggregated by sectors. Second, we regress toxic pollution (intensity effect) and pollutant concentration (composition effect) on labour market dimensions of left-behind places. Our results point to the existence of economic dependence on noxious industrialization in left-behind places. In addition, whenever environmental efficiency-enhancing production technologies are adopted this leads to labour-saving effects in industrial employment, but positive spatial spillovers at the regional level. Through the lens of evolutionary economic geography our results call for a new political economy of left-behind places.
    Keywords: Environmental inequality; Left-behind places; Toxic pollution; Labour markets.
    Date: 2022–07–02
  9. By: Quintana, Luis Baldomero
    Abstract: This paper provides evidence that domestic trade costs are a source of comparative advantage. First, I build an international trade and internal geography model with transportation features and input-output linkages. Then, I simulate how a large road project, Ruta del Sol, impacts the comparative advantage of Colombia. This road improves access to global markets for heterogeneous regions. My results show that the project shifts the comparative advantage of Colombia towards manufacturing. Industry linkages reinforce this effect. Hence, I confirm that a country’s comparative advantage is shaped by domestic trade costs, in addition to classical determinants like endowments, technology, and institutions. Lastly, my results suggest that road infrastructure is key for the structural transformation of developing nations.
    Keywords: Ciudades, Desarrollo urbano, Economía, Infraestructura, Investigación socioeconómica, Movilidad urbana, Sector público, Transporte,
    Date: 2022

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