nep-geo New Economics Papers
on Economic Geography
Issue of 2022‒11‒07
six papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Urban Agglomeration and Firm Innovation: Evidence from Developing Asia By Chen,Liming; Hasan,Rana; Jiang,Yi
  2. Road Capacity, Domestic Trade and Regional Outcomes By Cosar,Kerem,Demir,Banu,Ghose,Devaki,Young,Nathaniel Virgil C
  3. Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data By Grover,Arti Goswami; Maloney,William F.
  4. Heterogeneous Agglomeration Economies in the Developing Countries : The Roles of FirmCharacteristics, Sector Tradability, and Urban Mobility By Burger,Martijn; Ianchovichina,Elena; Akbar,Prottoy Aman
  5. Agglomeration Economies in Developing Countries : A Meta-Analysis By Grover,Arti Goswami; Lall,Somik V.; Timmis,Jonathan David
  6. Firm Productivity and Locational Choice : Evidence from Mozambique By Iimi,Atsushi

  1. By: Chen,Liming; Hasan,Rana; Jiang,Yi
    Abstract: This paper examines the relationship between urban agglomeration and firm innovation using a recently developed dataset that consistently measures city boundaries across Asia together with geo-referenced firm-level data. It finds that the spatial distribution of innovation by firms is highly concentrated within countries. Further, firms in larger cities have substantially higher propensities to introduce product and process innovations and undertake R&D activities, a result that holds for subgroups of countries and even when the largest cities are excluded from the analysis. Finally, the presence of high quality universities and highly ranked engineering departments in cities is positively associated with firm innovation, lending support to the idea that the accumulation of human capital locally is a key channel through which urban agglomeration affects innovation.
    Keywords: Innovation,Urban Governance and Management,Municipal Management and Reform,Common Carriers Industry,Food & Beverage Industry,General Manufacturing,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,Construction Industry,Business Cycles and Stabilization Policies,Plastics & Rubber Industry,Skills Development and Labor Force Training,Railways Transport
    Date: 2021–11–24
  2. By: Cosar,Kerem,Demir,Banu,Ghose,Devaki,Young,Nathaniel Virgil C
    Abstract: What is the impact on intranational trade and regional economic outcomes when the quality and lane capacity of an existing paved road network is expanded significantly? This paper investigates this question for the case of Turkey, which undertook a large-scale public investment in roads during the 2000s. Using spatially disaggregated data on road upgrades and domestic transactions, the paper estimates a large positive impact of reduced travel times on trade as well as local manufacturing employment and wages. A quantitative exercise using a workhorse model of spatial equilibrium implies heterogeneous effects across locations, with aggregate real income gains reaching 2–3 percent in the long run. Reductions in travel times increased the local employment-to-population ratio but had no effect on local population. The model is extended by endogenizing the labor supply decision to capture this finding. The model-implied elasticity of employment rates to travel time reductions captures about one-third of the empirical elasticity.
    Keywords: International Trade and Trade Rules,Transport Services,Labor Markets,Roads&Highways,Inter-Urban Roads and Passenger Transport,Roads and Highways Performance
    Date: 2021–09–13
  3. By: Grover,Arti Goswami; Maloney,William F.
    Abstract: Recent literature suggests that the positive impact of population density on wages, thecanonical measure of agglomeration effects, is multiples higher in developing countries than in advanced economies.This poses an urban productivity puzzle because on-the-ground observations do not suggest that cities indeveloping countries function especially well or are conducive to enhanced productivity. This paper usesmanufacturing censuses from four countries at differing levels of income that allow separating plant output quantityfrom prices. It shows that higher wage elasticities with respect to density are due to higher marginal costs, andagglomeration elasticities of efficiency, physical total factor productivity, are in fact far lower in developingcountries. Further, congestion costs decrease with country income. Both are consistent with often low rates ofstructural transformation that make cities in developing countries so-called “sterile agglomerations,” which arepopulous but not efficient.
    Date: 2022–03–21
  4. By: Burger,Martijn; Ianchovichina,Elena; Akbar,Prottoy Aman
    Abstract: Using geo-coded, firm-level data on more than 51,000 establishments in 649 metropolitan areas in98 developing economies, from the World Bank’s Enterprise Surveys and a new global database on city-level mobility andcongestion, this paper estimates the “pure” firm productivity gains of urban density, net of negativeexternalities associated with limited mobility, crime, and pollution. The results suggest that the average size ofagglomeration economies in the developing world is comparable to the one observed in advanced countries, butthe magnitude of the benefits of density on firm productivity substantially varies across firms. Returns tourban density are higher for firms operating in the tradables sector, exporters, foreign-owned firms, largerfirms, and more experienced firms. Agglomeration economies are lost through both limited uncongested mobility andcongestion, but the latter has a stronger negative effect on agglomeration economies and reduces relatively more theagglomeration benefits of firms in the non-tradables sector than those producing tradables.
    Keywords: Labor Markets,Common Carriers Industry,Food & Beverage Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics & Rubber Industry,Textiles, Apparel & Leather Industry,Pulp & Paper Industry,Intelligent Transport Systems,Transport Services,Crime and Society
    Date: 2022–03–07
  5. By: Grover,Arti Goswami; Lall,Somik V.; Timmis,Jonathan David
    Abstract: Recent empirical work suggests that there are large agglomeration gains from working and living in developing country cities. These estimates find that doubling city size is associated with an increase in productivity by 19 percent in China, 12 percent in India, and 17 percent in Africa. These agglomeration benefits are considerably higher relative to developed country cities, which are in the range of 4 to 6 percent. However, many developing country cities are costly, crowded, and disconnected, and face slow structural transformation. To understand the true productivity advantages of cities in developing countries, this paper systematically evaluates more than 1,200 elasticity estimates from 70 studies in 33 countries. Using a frontier methodology for conducting meta-analysis, it finds that the elasticity estimates in developing countries are at most 1 percentage point higher than in advanced economies, but not significantly so. The paper provides novel estimates of the elasticity of pollution, homicide, and congestion, using a large sample of developing and developed country cities. No evidence is found for productivity gains in light of the high and increasing costs of working in developing country cities.
    Keywords: Crime and Society,Food&Beverage Industry,General Manufacturing,Business Cycles and Stabilization Policies,Textiles, Apparel&Leather Industry,Pulp&Paper Industry,Common Carriers Industry,Construction Industry,Plastics&Rubber Industry,Labor Markets
    Date: 2021–07–19
  6. By: Iimi,Atsushi
    Abstract: Transport infrastructure is an important driving force for economic growth. Africa has been lagging behind in the global manufacturing market. Among others, infrastructure is often an important constraint. The paper reexamines the impacts of transport infrastructure on firm productivity in Mozambique. A conventional cost function is estimated with two rounds of firm data collected in 2007 and 2018. It is found that improved transport connectivity, particularly access to a port, has a positive impact on firm production. Firm inventory is also an important determinant of firm productivity. Over the long term, agglomeration economies are also found to be significant and associated with port accessibility. These findings are consistent with the fact that the Government of Mozambique heavily invested in the primary road network during the first half of the 2010s. The improved transport network is considered to have contributed to the country’s robust economic growth in the industrial and service sectors until the mid-2010s.
    Keywords: Transport Services,Food&Beverage Industry,Common Carriers Industry,Construction Industry,Business Cycles and Stabilization Policies,General Manufacturing,Plastics&Rubber Industry,Pulp&Paper Industry,Textiles, Apparel&Leather Industry,Energy Policies&Economics,Energy and Mining,Energy and Environment,Energy Demand
    Date: 2021–07–02

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