nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒09‒05
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Related Variety and Regional Development By Harald Bathelt; Michael Storper
  2. Reversing Fortunes of German Regions, 1926–2019: Boon and Bane of Early Industrialization? By Berbée, Paul; Braun, Sebastian Till; Franke, Richard
  3. Agglomeration, Innovation, and Spatial Reallocation: The Aggregate Effects of R&D Tax Credits By Alexandre Sollaci
  4. Revitalising the Silk Road: Evidence from Railway Infrastructure Investments in Northwest China By Yu, Lamont Bo; Tran, Trang My; Lee, Wang-Sheng
  5. Blending Theory and Data: A Space Odyssey By Dave Donaldson
  6. A resource-based analysis of strategic alliances between knowledge intermediaries in regional innovation and entrepreneurial ecosystems By Bäumle, Philipp; Bizer, Kilian
  7. Supply Chain Dynamics and Resilience of the Economy during a Crisis By KAWAKUBO Takafumi; SUZUKI Takafumi

  1. By: Harald Bathelt; Michael Storper
    Abstract: Evolutionary approaches have contributed substantially to the growing knowledge body about regional development processes and their underlying mechanisms. They have advanced our understanding particularly by going beyond case study methods, using empirical, mostly regression- based statistical analyses. One key concept that underlies evolutionary economic geography (EEG) is that of “related variety†. In EEG studies, regional industry structure is represented through its level of related variety, which in turn is found to be positively associated with favorable types of regional economic development. In this paper, we raise questions regarding the internal logic of the concept, its spatial expressions, measurement specifics, empirical regularities and biases, and the short- and long- term effects of related variety on regional development. Based on this examination, we make suggestions for future research.
    Keywords: Economic geographies of places; evolutionary economic geography (EEG); regional development; regional specialization; related variety
    JEL: L23 R11
    Date: 2022–08
  2. By: Berbée, Paul (ZEW); Braun, Sebastian Till (University of Bayreuth); Franke, Richard (University of Bayreuth)
    Abstract: This paper shows that 19th-century industrialization is an important determinant of the significant changes in Germany’s economic geography observed in recent decades. Using novel data on economic activity in 163 labor market regions in West Germany, we establish that nearly half of them experienced a reversal of fortune between 1926 and 2019, i.e., they moved from the lower to the upper median of the income distribution or vice versa. Economic decline is concentrated in North Germany, economic ascent in the South. Exploiting plausibly exogenous variation in access to coal, we show that early industrialization turned from an advantage for economic development to a burden after World War II. The dominant position of heavy industry, supported by the local political-administrative system, limited regional adaptability when the old industries fell into crisis. Today, the early industrialized regions suffer from low innovation and deindustrialization. The (time-varying) effect of industrialization explains most of the decline in regional inequality observed in the 1960s and 1970s and about half of the current north-south gap in economic development.
    Keywords: industrialization, economic development, regional inequality
    JEL: N91 N92 O14 R12
    Date: 2022–07
  3. By: Alexandre Sollaci
    Abstract: I investigate the aggregate effects of R&D tax credits in the US. Because it subsidizes R&D activity and because credit rates vary between states, this policy has both spatial and dynamic effects on the economy. To address this issue, I construct an endogenous growth model with spatial heterogeneity and agglomeration spillovers in innovation. Aggregate outcomes in this model are thus affected by the spatial distribution of the population in the economy, which is itself endogenous and reacts to policy. I use this framework to identify a set of local R&D subsidies that maximize aggregate welfare.
    Keywords: agglomeration; innovation; R&D tax credits
    Date: 2022–07–01
  4. By: Yu, Lamont Bo (University of Macau); Tran, Trang My (Monash University); Lee, Wang-Sheng (Monash University)
    Abstract: China’s Belt and Road Initiative was introduced in 2013 to revitalise the Silk Road and promote economic development and integration. This paper investigates the economic effects of the opening of the only high-speed rail (HSR) line in northwest China which connects China’s northwestern provinces along this Silk Road land route. We use a recently developed machine-learning extended nightlight data series from 2000 to 2019 and employ the ridge augmented synthetic control method (Ben-Michael et al., 2021) to assess the effects of the HSR line connection on economic activity along this Silk Road land route. We further propose an algorithm that helps automate the donor pool selection process while ensuring optimal pre-treatment fitness. Our results show that there are winners and losers from the opening of the Lanzhou–Urumqi HSR line. While there is some indication of the role that HSR can help play in making progress towards breaking through the Hu Huanyong Line, a geographical demarcation in China that is of vast economic significance, not all counties benefited from the opening of the HSR line.
    Keywords: high-speed railway, augmented synthetic control, Hu Huanyong Line
    JEL: O22 R11 R58
    Date: 2022–07
  5. By: Dave Donaldson
    Abstract: This article describes methods used in the field of spatial economics that combine insights from economic theory and evidence from data in order to answer counter- factual questions. I outline a general framework that emphasizes three elements: a specific question to be answered, a set of empirical relationships that can be identified from exogeneity assumptions, and a theoretical model that is used to extrapolate from such empirical relationships to the answer that is required. I then illustrate the application of these elements via a series of twelve examples drawn from the fields of international, regional, and urban economics. These applications are chosen to illustrate the various techniques that researchers use to minimize the theoretical assumptions that are needed to traverse the distance between identified empirical patterns and the questions that need to be answered.
    JEL: B4 C1 F0 O0 R0
    Date: 2022–07
  6. By: Bäumle, Philipp; Bizer, Kilian
    Abstract: Notwithstanding a recent upsurge in interest in knowledge intermediaries and their roles in innovation and entrepreneurial ecosystems, we know little about the interplay between the activities of academia driven intermediaries and their publicly financed counterparts. Building upon a combination of principles derived from the resource based theory and the entrepreneurial ecosystems literature, this paper investigates the potentials of cooperation between different knowledge intermediaries. Therefore, we analyze the alignment of financial, knowledge, market and network resources in politically funded regional alliances between university internal and university external intermediaries by the means of a qualitative approach. We find that while knowledge intermediaries can benefit from access to additional ecosystem specific resources, the urge to improve the own position within the ecosystem hampers the will for cooperation and can lead to non performing resource alignments. This paper contributes to current scholarly discussions by suggesting and testing a theoretical foundation for analyzing the cooperative behavior of knowledge intermediaries in innovation and entrepreneurial ecosystems.
    Keywords: resource-based view,strategic alliances,knowledge intermediaries,innovation and entrepreneurial ecosystems,qualitative case study
    JEL: I29 O31 O39
    Date: 2022
  7. By: KAWAKUBO Takafumi; SUZUKI Takafumi
    Abstract: Recently, supply chain disruptions are prevalent worldwide. When there are disruptions, firms restructure their supply chains to minimize negative impacts. The ability to restructure is the key for firms to be resilient against shocks. However, there is little evidence on how firms react to supply chain disruptions. We exploit large-scale firm-level transaction data and focus on the Great East Japan Earthquake in 2011. It was a massive but local shock in that only firms in the disaster area received direct negative impacts. First, we found a sudden shift of supplier choice diverting away from the disaster area. Second, although firms overall increased the number of suppliers, they geographically concentrated the supply chains outside the disaster area. This finding is robust across different measures of geographic concentration. Finally, we showed that firm productivity is a determinant of the ability to find alternative suppliers. These results suggest that supply chain disruptions would concentrate the spatial distribution of economic activities and that the effect would be driven by productive firms.
    Date: 2022–08

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