nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒09‒19
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional diversification and intra-regional wage inequality in the Netherlands By Nicola Cortinovis; Dongmiao Zhang; Ron Boschma
  2. Disruptive innovation and spatial inequality By Kemeny, Tom; Petralia, Sergio; Storper, Michael
  3. Agglomeration and welfare in a continuous space By Kensuke Ohtake
  4. Environmental Policies Benefit Economic Development: Implications of Economic Geography By Seth Morgan; Alexander Pfaff; Julien Wolfersberger
  5. Spatial economic dynamics and transport project appraisal By James Lennox
  6. Green & non-green relatedness: challenges and diversification opportunities for regional economies in Argentina By Belmartino, Andrea
  7. Introduction to The Creative Class Revisited: New Analytical Advances By Batabyal, Amitrajeet; Nijkamp, Peter
  8. Quality of sub-national government and regional development in Africa By Iddawela, Yohan; Lee, Neil; Rodríguez-Pose, Andrés
  9. National elections, sub-national growth: the politics of Turkey's provincial economic dynamics under AKP rule By Luca, Davide
  10. Consumption Cities vs. Production Cities: New Considerations and Evidence By Remi Jedwab; Elena Ianchovichina; Federico Haslop
  11. Lockdowns Require Geographic Coordination because of the Propagation of Economic Effects through Supply Chains By INOUE Hiroyasu; MURASE Yohsuke; TODO Yasuyuki
  12. The Impact of the Public Education Expenditures on Regional Development in Turkey: Evidence from Static and Dynamic Panel Data By Köktaş, A. Murat; Apaydın, Şükrü; Pirçekli, Koray

  1. By: Nicola Cortinovis; Dongmiao Zhang; Ron Boschma
    Abstract: The literature has drawn little attention to the relationship between industrial dynamics (i.e. the rise and fall of industries) and intra-regional wage inequality. This explorative study examines the relationship between industry dynamics and wage inequality in NUTS-3 regions in the Netherlands in the period 2010-2019. While the literature has shown that related diversification in more complex industries enhances economic growth in regions but also inequality between regions, our study shows that related diversification in less complex industries tends to reduce wage inequality within a region. This implies it remains a policy challenge to combine smart and inclusive growth in regions. Our study also showed that there is no significant relationship between exit of industries and regional inequality, with one exception: unrelated low-complex exits tend to increase intra-regional wage inequality. Overall, these findings suggest that related diversification in less complex industries tends to bring benefits in terms of inclusive growth, while unrelated exits in less complex industries tend to do the opposite.
    Keywords: intra-regional inequality, regional inequality, relatedness, structural change, inclusive growth
    JEL: O18 O31 O33 R11
    Date: 2022–08
  2. By: Kemeny, Tom; Petralia, Sergio; Storper, Michael
    Abstract: Although technological change is widely credited as driving the last 200 years of economic growth, its role in shaping patterns of inequality remains under-explored. Drawing parallels across two industrial revolutions in the United States, this paper provides new evidence of a relationship between highly disruptive forms of innovation and spatial inequality. Using the universe of patents granted between 1920 and 2010 by the US Patent and Trademark Office (USPTO), we identify disruptive innovations through their rapid growth, complementarity with other innovations and widespread use. We then assign more and less disruptive innovations to subnational regions in the geography of the United States. We document three findings that are new to the literature. First, disruptive innovations exhibit distinctive spatial clustering in phases understood to be those in which industrial revolutions reshape the economy; they are increasingly dispersed in other periods. Second, we discover that the ranks of locations that capture the most disruptive innovation are relatively unstable across industrial revolutions. Third, regression estimates suggest a role for disruptive innovation in regulating overall patterns of spatial output and income inequality.
    Keywords: industrial revolutions; inequality; innovation; regional development; technological change
    JEL: J31 O30 O33 O51
    Date: 2022–07–20
  3. By: Kensuke Ohtake
    Abstract: Two spatial equilibria, agglomeration and dispersion, in a continuous space core-periphery model are examined to discuss which equilibrium is socially preferred. It is shown that when transport cost is lower than a critical value, the agglomeration equilibrium is preferable in the sense of Scitovszky, while when the transport cost is above the critical value, the two equilibria can not be ordered in the sense of Scitovszky.
    Date: 2022–08
  4. By: Seth Morgan; Alexander Pfaff; Julien Wolfersberger (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: For over a century, starting with the work of Alfred Marshall (and including in resource economics), economic geography has emphasized the productivity of dense urban agglomerations. Yet little attention goes to one key policy implication of economic geography's core mechanisms: Environmental policies can aid economic development, per se—not hurting the economy to help the environment but advancing both objectives. We review mechanisms from economic geography which imply that environmental policies can deliver such win-wins: influences upon agglomeration of long-standing natural conditions, like usable bays, which long were perceived as fixed yet now are being shifted by global environmental quality; agglomeration's effects on other influential conditions, like urban environmental quality; and the effects of rural nvironmental quality on the flows to cities of people and environmental quality. Finally, we consider a geographic policy typology in asking why society leaves money on the table by failing to promote environmental policies despite the potential win-wins that we highlight.
    Keywords: economic geography,development,environment,natural resources
    Date: 2022–10
  5. By: James Lennox
    Abstract: Transport infrastructure is costly to build and very long-lived. Major projects are expected to enhance accessibility, which over time, is likely to a ect the distribution of population and employment. In a Dynamic Spatial Equilibrium (DSE) model, the timing and location of a project's direct costs and benefits can be explicitly represented. Effects of both construction and operational phases are captured in a forward-looking spatial general equilibrium with costly adjustment. Not only are dynamic responses of direct interest to policymakers, but they have crucial implications for welfare analysis. In this paper, we present a flexible DSE model incorporating dynamics of internal migration and occupation choice, and intra- period spatial linkages via commuting and trade flows. We calibrate the framework to Australian data and illustrate its application by modelling a hypothetical fast express rail service in South-East Queensland. In analysing the results, we highlight the roles of general equilibrium effects within and between periods. These are important both to overall welfare benefits and to their distribution. Transport cost changes are exogenous inputs to our simulation. However, we also discuss the potential to link a DSE model to a four-step strategic transport model to enable fully dynamic Land Use-Transport Interactions (LUTI) simulations.
    Keywords: dynamic spatial equilibrium, project appraisal
    JEL: R12 R23 R42
    Date: 2022–08
  6. By: Belmartino, Andrea
    Abstract: This paper analyzes the role of relatedness in the development of new green specializations for the Argentinean provinces between 2008-2019. The development of products with environmental benefits (called green products) is considered one step towards a sustainable transition. These products present a growing demand that may provide an opportunity in terms of green development. The empirical strategy draws on the evolutionary economic geography through indices that capture knowledge bases in the region. The aim is to analyze the role of green and non-green relatedness in the development of new green specializations and to identify potential diversification opportunities. Empirical results show that the green economy has an uneven spatial distribution across the country, that remains stable over time. Furthermore, the development of a new green specialization is positively related to the productive knowledge bases present in the region (proxied by relatedness density). Both, green and non-green relatedness are relevant to develop new specializations in green products. Potential diversification opportunities are also in favor of wealthier regions. Finally, the results reveal a path dependence process on the development of new specialization in green products.
    Keywords: Diversificación de la Producción; Economía Regional; Economía Verde; Argentina; 2008-2019;
    Date: 2022–07
  7. By: Batabyal, Amitrajeet; Nijkamp, Peter
    Abstract: In this introductory chapter, we contextualize and briefly describe the intellectual contributions of the different chapters in this book. Following this chapter, which comprises Part I of the book, there are eleven chapters and each of these chapters addresses a particular research question or a set of questions about the creative class. Part II of this book consists of two chapters and this part focuses on alternate conceptual approaches to the creative class. Part III also contains two chapters and this part concentrates on analytics. Part IV consists of five chapters and this part sheds light on a variety of regional perspectives on the creative class. Finally, the two chapters that make up part V takes a retrospective and a prospective look at research on the creative class. In the concluding section of the present chapter, we offer some reflections on the cornerstones of creative class theory as advocated by Richard Florida two decades ago.
    Keywords: Creative Class, Definition, Measurement, Modeling, Research
    JEL: R11 R12 R50
    Date: 2022–06–03
  8. By: Iddawela, Yohan; Lee, Neil; Rodríguez-Pose, Andrés
    Abstract: Despite widespread interest in government quality and economic development, the role of sub-national government has been largely overlooked. This represents an omission in Africa, given ongoing processes of devolution in much of the continent. In this article, we consider the impact of sub-national government institutions on economic development in 339 regions across 22 African countries. We create a novel index of sub-national government quality based on large-scale survey data and assess its impact on regional economies using satellite data on night light luminosity. To address causality concerns, we instrument sub-national government quality with data from pre-colonial societies. Our results show a positive and significant relationship between sub-national government quality and regional economic development, even when controlling for the quality of national-level institutions. Better sub-national governments are a powerful but often overlooked determinant of development in Africa.
    Keywords: institutions; quality of government; regions; Africa; decentralisation
    JEL: N0 R14 J01
    Date: 2021–08–03
  9. By: Luca, Davide
    Abstract: Despite a large body of work on the impacts of institutions on subnational growth and development, economic geographers have, in the last decades, frequently overlooked the role of politics and, in particular, that of national political economies. Drawing on the political science literature, the article argues that studying national political dynamics is still key to understand the cumulative process of uneven regional development. Using data from Turkey over the period 2004-2016, the article shows how national electoral politics and government actions have significantly affected provincial growth patterns. The impact is substantive and increases in election years. Results also suggest that the central government may have influenced sub-national growth trajectories in different ways, including boosting the construction sector and expanding public employment.
    Keywords: distributive politics; electoral politics; politics of development; regional economic growth; Turkey
    JEL: D72 H73 O18 R11
    Date: 2022–07–01
  10. By: Remi Jedwab (George Washington University); Elena Ianchovichina (The World Bank); Federico Haslop (George Washington University)
    Abstract: Cities dramatically vary in their sectoral composition across the world, possibly lending credence to the theory that some cities are production cities with high employment shares of urban tradables while others are consumption cities with high employment shares of urban non-tradables. A model of structural change highlights three paths leading to the rise of consumption cities: resource rents from exporting fuels and mining products, agricultural exports, and premature deindustrialization. These findings appear to be corroborated using both country- and city-level data. Compared to cities in industrialized countries, cities of similar sizes in resource-rich and deindustrializing countries have lower shares of employment in manufacturing, tradable services and the formal sector, and higher shares of employment in non-tradables and the informal sector. Results on the construction of "vanitous" tall buildings provide additional evidence on the relationship between resource exports and consumption cities. Finally, the evidence suggests that having mostly consumption cities might have economic implications for a country.
    Keywords: Structural Change; Urbanization; Consumption Cities; Macro-Development Economics; Industrialization; Natural Resources; Deindustrialization; Construction
    JEL: O11 E24 E26 O13 O14 O18 R1 R12
    Date: 2022–05
  11. By: INOUE Hiroyasu; MURASE Yohsuke; TODO Yasuyuki
    Abstract: To prevent the spread of COVID-19, many governments have imposed regional or national lockdowns, resulting in economic stagnation across broad areas because the shock of the lockdown propagated to other regions through supply chains. Using supply-chain data of 1.6 million firms in Japan, this study examines how the economic effect of lockdowns in multiple regions interact with each other, particularly focusing on possible differences between synchronous and asynchronous lockdowns. Our major findings are twofold. First, when multiple regions coordinate the timing of their lockdowns, particularly when they impose and lift lockdowns synchronously, their economic losses are smaller than when they do so asynchronously without any coordination. Second, the benefit of synchronous lockdowns in multiple regions is larger when they are connected through a larger number of supply-chain links. Our results suggest a need for policy coordination across regions and countries when lockdowns are imposed.
    Date: 2022–08
  12. By: Köktaş, A. Murat; Apaydın, Şükrü; Pirçekli, Koray
    Abstract: This study aims to analyze the impact of public education expenditures on regional economic development in Turkey. For this purpose, we test the hypothesis that there is a strong relationship between education expenditures and economic growth/development using static and dynamic panel data (system GMM) methods. In the analysis, we use annual data on central government education expenditures and regional GDP per capita data for the period 2004– 2019 for 81 provinces at NUTS-III level. The findings of the study revealed a positive relationship between central government education expenditures and regional development. In other words, regional development accelerates if education expenditures increase. However, the magnitude of the effect is not as strong as is expressed in the hypothesis: a ten percent increase in education spending only increases economic development by 1.1 percent.
    Keywords: Public education expenditures, Regional development, Static panel data, Dynamic panel data.
    JEL: E62 O1 R1 R13 R58
    Date: 2022

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