nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒08‒22
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The economic returns of decentralization: government quality and the role of space By Rodríguez-Pose, Andrés; Muštra, Vinko
  2. Technology, resources and geography in a paradigm shift: the case of critical and conflict materials in ICTs By Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
  3. The geography of acquisitions and greenfield investments: firm heterogeneity and regional institutional conditions By Amendolagine, Vito; Crescenzi, Riccardo; Rabellotti, Roberta
  4. Regional structural change and the effects of job loss By Arntz, Melanie; Ivanov, Boris; Pohlan, Laura
  5. Spatially Uneven Pace of Deindustrialization Within a Country By Kozo Kiyota
  6. The Impact of High-Speed Rail on Labor Spatial Misallocation– Based on Spatial Difference-in-Differences Analysis By Linnan Yan; Menger Tu, Andre Luis Squarize Chagas, Lufeng Tai
  7. Modeling clusters from the ground up: a web data approach By Stich, Christoph; Tranos, Emmanouil; Nathan, Max
  8. Meta-organizing Clusters as Agents of Transformative Change through 'Responsible Actorhood' By Héloïse Berkowitz; Martine Gadille
  9. The performance of Italian Industrial Districts in and out of the 2008-2012 crisis By Valter Di Giacinto; Andrea Sechi; Alessandro Tosoni
  10. Potential spatial impacts of the war in Ukraine: A case study from Italy By OECD
  11. Combining Survey and Geospatial Data Can Significantly Improve Gender-Disaggregated Estimates of Labor Market Outcomes By Merfeld, Joshua D.; Newhouse, David; Weber, Michael; Lahiri, Partha
  12. Nonparametric prediction with spatial data By Gupta, Abhimanyu; Hidalgo, Javier
  13. The CEPII Gravity Database By Maddalena Conte; Pierre Cotterlaz; Thierry Mayer

  1. By: Rodríguez-Pose, Andrés; Muštra, Vinko
    Abstract: Research on the impact of decentralization has generally overlooked the fact that the economic returns of transferring powers and resources to subnational tiers of government greatly depend on the quality of the devolved government. Scholarly literature has also neglected that these returns may be similarly affected by the autonomy of neighbouring areas and their government quality. In this paper we use panel data fixed effects analyses and spatial Durbin econometric (SDM) models to assess the extent to which the economic returns of political and fiscal decentralization in the European Union (EU) between 2000 and 2015 are mediated by local government quality and that of neighbouring regions. The results suggest that the economic benefits of regional autonomy are greater in regions with a better government quality, while regions with a low quality of government grow less, regardless of their level of decentralization. The gains of decentralization mainly accrue through indirect effects, as regions grow more if surrounded by other, more decentralized regions than through their own level of decentralization. In all cases, local government quality is a powerful driver of growth, irrespective of whether a region is considered individually or in relationship to its neighbours.
    Keywords: decentralization; quality of government; growth; spatial dependency; regions; EU
    JEL: H72 H77 R11 R58
    Date: 2022–07–20
  2. By: Diemer, Andreas; Iammarino, Simona; Perkins, Richard; Gros, Axel
    Abstract: Critical and conflict materials (CCMs) are providing an important material infrastructure for recent technological shifts. Relying on text analysis of US Patent and Trademark Office (USPTO) data, this exploratory study examines the technological and geographical linkages between technological paradigms and selected CCMs. Our descriptive analysis finds evidence of a clear association between information and communication technologies (ICTs) and CCM intensity over time, and of a striking resource–technology divide between value-creating and -extracting activities across the Global North and the Global South and their regions. The paper emphasizes the need for a more critical, spatially sensitive approach to studying resource-based technological change to expose its uneven development consequences.
    Keywords: critical and conflict materials; paradigm shift; technological demand; geography of technology; geography of resource supply; STICERD; LSE; 2019-2020; Undergraduate Research Fellowship from the Department of Geography & Environment; LSE; FORTE; 2016-07099; T&F deal
    JEL: O30 Q34 Q55 R11
    Date: 2022–04–15
  3. By: Amendolagine, Vito; Crescenzi, Riccardo; Rabellotti, Roberta
    Abstract: This paper investigates how institutional conditions at national and regional levels shape the decisions of Multinational Enterprises (MNEs) to invest abroad by means of either acquisitions or greenfield investments. The empirical analysis covers all Foreign Direct Investment (FDI) projects in the European Union by the largest MNEs in the world to study alternative choices by the same firm and account for firm-level characteristics in investment decisions. The empirical results show that - other things being equal - MNEs prefer acquisitions to control activities in regions with stronger investment eco-systems, while they choose greenfield investments in regions with weaker systemic conditions. Moreover, the regional quality of government makes a fundamental difference to the nature of the investment projects attracted by regions: those with high quality of government can attract greenfield investments undertaken by the most productive MNEs. By improving their quality of government, local and regional policy makers can attract higher quality FDI to their constituencies, potentially breaking the vicious circle between low productivity areas and low productivity FDI.
    Keywords: greenfield FDI; cross-border acquisitions; firm terogeneity; regions; Europe; insitutions; European Union Horizon 2020 Programme H2020/2014-2020 (Grant Agreement n 639633-MASSIVE-ERC-2014-STG).
    JEL: R12 R58 F23
    Date: 2022–07
  4. By: Arntz, Melanie; Ivanov, Boris; Pohlan, Laura
    Abstract: Routine-intensive occupations have been declining in many countries, but how does this affect individual workers' careers if this decline is particularly severe in their local labor market? This paper uses administrative data from Germany and a matched difference-in-differences approach to show that the individual costs of job loss strongly depend on the task-bias of regional structural change. Workers displaced from routine manual occupations have substantially higher and more persistent employment and wage losses in regions where such occupations decline the most. Regional and occupational mobility partly serve as an adjustment mechanism, but come at high cost as these switches also involve losses in firm wage premia. Non-displaced workers, by contrast, remain largely unaffected by structural change.
    Keywords: routine-biased structural change,local labor markets,displacement,mass-layoffs,plant closures,matching,difference-in-differences,event study
    JEL: J24 J63 J64 J65 O33 R11
    Date: 2022
  5. By: Kozo Kiyota (Keio Economic Observatory, Keio University)
    Abstract: The declining share of manufacturing value-added, often referred to as "deindustrialization," is fast becoming a major concern for policymakers and academic researchers, especially in high-income countries. When compared with country-level analysis, however, regional-level analyses of deindustrialization within a country are limited. This paper empirically examines how and why the patterns of deindustrialization are uneven across regions within a country. The analysis builds upon the neoclassical trade model and uses regional-level data in Japan where both detailed output and input data are available at the regional and industry levels for both manufacturing and nonmanufacturing industries over the last four decades. One of the major findings is that the large variation in deindustrialization within a country is attributable to differences in productivity and price changes across regions. In contrast, the effect of the slowdown in capital accumulation, partly from the expansion of foreign direct investment or offshoring, commonly appears not in specific regions but across regions. The effect of spatial interdependence is also not only statistically significant but also nonnegligible in terms of its magnitude.
    Keywords: Deindustrialization;Region;Neoclassical trade model;Productivity;spatial interdependence
    JEL: F11 F14 R12
    Date: 2022–07–22
  6. By: Linnan Yan; Menger Tu, Andre Luis Squarize Chagas, Lufeng Tai
    Abstract: Existing studies neglected to assess the resource allocation effect of high-speed railway (HSR). This paper examines the impact of HSR on labor spatial misallocation in China by applying a modifified spatial difference-in-differences approach, which identify local treatment effect, spillover effect on treated and untreated regions. The study fifinds: (1) Opening HSR alleviates not only the local labor misallocation but also the misallocation in surrounding areas to a greater extent, including cities with HSR (treatment group) and without HSR (control group), which contributes to the overall productivity increase. The spillover effect of HSR is larger than the direct effect. (2) The largest spillover effect occurs in adjacent areas near 350 km apart, while the spillover effect disappears beyond 500 km. (3) The direction and magnitude of HSR effect depend on the urban scale. For large-scale cities, the impact of opening HSR is greater versus small-scale ones.
    Keywords: high-speed railway; spatial difference-in-differences; labor spatial
    JEL: C23 R15 R40
    Date: 2022–08–04
  7. By: Stich, Christoph; Tranos, Emmanouil; Nathan, Max
    Abstract: This paper proposes a new methodological framework to identify economic clusters over space and time. We employ a unique open source dataset of geolocated and archived business webpages and interrogate them using Natural Language Processing to build bottom-up classifications of economic activities. We validate our method on an iconic UK tech cluster – Shoreditch, East London. We benchmark our results against existing case studies and administrative data, replicating the main features of the cluster and providing fresh insights. As well as overcoming limitations in conventional industrial classification, our method addresses some of the spatial and temporal limitations of the clustering literature.
    Keywords: cities; clusters; machine learning; technology industry; onsumer Data Research Centre (CDRC) and Engineering and Physical Sciences Research Council (ESRC
    JEL: J1 N0
    Date: 2022–06–17
  8. By: Héloïse Berkowitz (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, AMU - Aix Marseille Université); Martine Gadille (LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, AMU - Aix Marseille Université)
    Abstract: How to organize clusters as local agents of transformative change, i.e. players that actively contribute to systemic sustainability transitions anchored in territories? We take a meta-organizational approach to the design of clusters for sustainability. We argue that achieving meta-organizational 'responsible actorhood' is a crucial condition for clusters to act as local agents of transformative change. Responsible actorhood allows to address the issues of lack of answerability, path dependency towards growth and labor resistance. Responsible actorhood involves 1) developing mechanisms to ensure 'metaorganizational accountability', 2) nurturing 'transformative mediated reflexivity' about technological ruptures and ecological performance in a public-centric approach and 3) enabling 'negotiated professional restructuring' to establish new knowledge processes at work. We contribute to the literature on clusters and STI policy, and to the metaorganization literature. Our work also has policy and practical implications for the design and steering of eco-industrial clusters.
    Keywords: meta-organization,sustainable innovation,actorhood,accountability,reflexivity,professionality,eco-industrial clusters
    Date: 2022–12–07
  9. By: Valter Di Giacinto (Bank of Italy); Andrea Sechi (Bank of Italy); Alessandro Tosoni (Bank of Italy)
    Abstract: By exploiting firm level balance sheet data from the Cerved database and employment data from the INPS database, we provide a detailed description of the productivity performance of Italian industrial districts firms over the 2003-2017 period. The main structural features of industrial districts are first compared with those of the other types of local labour market areas. The performance of district firms is subsequently analysed both overall and separately for the firms belonging to the core district industry and the remaining companies. We find evidence of a positive and sizeable district productivity premium, increasing over the period of analysis. However, in order to consolidate their performance, industrial districts had to undergo significant structural changes. Medium-sized and large firms have grown in importance, also through a process of capital deepening that involved both tangible and intangible fixed assets. At the same time, structural adaptation involved the acquisition of a more significant role by firms not operating in the main district industry.
    Keywords: industrial districts, agglomeration economies, structural adaptation
    JEL: L25 L60 R11
    Date: 2022–06
  10. By: OECD
    Abstract: The impacts of the war in Ukraine will be felt severely within OECD economies, especially in border regions on the front-line of the humanitarian refugee crisis. The economic impacts, in particular those driven by rising energy prices, will also be spatially differentiated, affecting some regions more than others. Italy is no exception, with gas-intensive industries concentrated in northern regions, and wheat-based food and farming prevailing in southern regions and islands. While, overall, Russia accounted for a minor share of Italian exports, some regions and industries are more vulnerable than others to falls in bilateral trade, including destinations popular with high per-capita expenditure Russian tourists.
    Keywords: commodities, employment, spatial analysis, tourism, trade
    JEL: F16 F51 J43 O13 R11 R12
    Date: 2022–07–06
  11. By: Merfeld, Joshua D. (KDI School of Public Policy and Management); Newhouse, David (World Bank); Weber, Michael (University of Chicago); Lahiri, Partha (University of Maryland)
    Abstract: Better understanding the geography of women's labor market outcomes within countries is important to inform targeted efforts to increase women's economic empowerment. This paper assesses the extent to which a method that combines simulated survey data from urban areas in Mexico with broadly available geospatial indicators from Google Earth Engine and OpenStreetMap can significantly improve estimates of labor force participation and unemployment rates. Incorporating geospatial information substantially increases the accuracy of male and female labor force participation and unemployment rates at the state level, reducing mean absolute deviation by 50 to 62 percent for labor force participation and 25 to 52 percent for unemployment. Small area estimation using a nested error conditional random effect model also greatly improves municipal estimates of labor force participation, as the mean absolute error falls by approximately half, while the mean squared error falls by almost 75 percent when holding coverage rates constant. In contrast, the results for municipal unemployment rate estimates are not reliable because values of unemployment rates are low and therefore poorly suited for linear models. The municipal results hold in repeated simulations of alternative samples. Models utilizing Basic Geo-Statistical Area (AGEB)–level auxiliary information generate more accurate predictions than area-level models specified using the same auxiliary data. Overall, integrating survey data and publicly available geospatial indicators is feasible and can greatly improve state-level estimates of male and female labor force participation and unemployment rates, as well as municipal estimates of male and female labor force participation.
    Keywords: small area estimation, data integration, geospatial data, labor force participation, unemployment, Mexico
    JEL: J21 C13
    Date: 2022–06
  12. By: Gupta, Abhimanyu; Hidalgo, Javier
    Abstract: We describe a (nonparametric) prediction algorithm for spatial data, based on a canonical factorization of the spectral density function. We provide theoretical results showing that the predictor has desirable asymptotic properties. Finite sample performance is assessed in a Monte Carlo study that also compares our algorithm to a rival nonparametric method based on the infinite AR representation of the dynamics of the data. Finally, we apply our methodology to predict house prices in Los Angeles.
    Keywords: STICERD; ES/R006032/1
    JEL: J1
    Date: 2022–05–23
  13. By: Maddalena Conte; Pierre Cotterlaz; Thierry Mayer
    Abstract: The Gravity database gathers a set of variables useful to researchers or practitioners estimating gravity equations. Each observation corresponds to a combination of an exporting country, an importing country and a year (i.e. "origindestination-year"). The data covers all existing countries, from 1948 to 2020, and includes a wide range of potential determinants of trade flows: geographic distances, indicators of cultural proximity, trade facilitation measures, etc.
    Keywords: Gravity Models;Bilateral Trade;Distance
    JEL: F1
    Date: 2022–07

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