nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒01‒09
thirteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. The Deep Historical Roots of Industrial Culture and Regional Entrepreneurship - A case study of two regions By Michael Fritsch; Maria Greve; Michael Wyrwich
  2. Where to go? High-skilled individuals' regional preferences By Jeworrek, Sabrina; Brachert, Matthias
  3. The spatial determinants of innovation diffusion: evidence from global shipping networks By César Ducruet; Hidekazu Itoh
  4. Measuring spatial dispersion: an experimental test on the M-index By S. Usai; F. Guy; A. Tidu
  5. The diffusion of digital skills across EU regions:structural drivers and polarization dynamics By Serenella Caravella; Valeria Cirillo; Francesco Crespi; Dario Guarascio; Mirko Menghini
  6. Agglomeration and emigration: The economic impact of railways in post-Famine Ireland By Fernihough, Alan; Lyons, Ronan C.
  7. The Rise & Fall of Urban Concentration in Britain: Zipf, Gibrat and Gini across two centuries By Ronan Lyons; Elisa Maria Tirindelli
  8. Industrial Clusters in the Long Run: Evidence from Million-Rouble Plants in China By Stephan Heblich; Marlon Seror; Hao Xu; Yanos Zylberberg
  9. Endogenous labour supply and negative economic shocks in a large scale spatial CGE model of the European Union By Martin Christensen; Damiaan Persyn
  10. Urban pollution: A global perspective By Rainald Borck; Philipp Schrauth
  11. Are semi-urban spillovers the answer to left-behind places in rural Europe? The case of the Portuguese municipalities By Luisa Alamá-Sabater; Miguel Ángel Márquez; Emili Tortosa-Ausina; Júlia Cravo
  12. Handbook of Territorial and Local Development Strategies By PERTOLDI Martina; FIORETTI Carlotta; GUZZO Fabrizio; TESTORI Giulia; DE BRUIJN Martijn; FERRY Martin; KAH Stefan; SERVILLO Loris Antonio; WINDISCH Sissy
  13. Urban Poverty Mapping with Open Spatial Data: Evidence from Dar es Salaam By Peter Fisker; Kenneth Mdadila

  1. By: Michael Fritsch (Friedrich Schiller University Jena, Germany); Maria Greve (Utrecht University, The Netherlands, and Friedrich Schiller University Jena, Germany); Michael Wyrwich (University of Groningen, The Netherlands, and Friedrich Schiller University Jena, Germany)
    Abstract: We describe and compare the development trajectories of two German regions, South Saxony and Mecklenburg, with a special focus on entrepreneurship and innovation. South Saxony has a long history of self-employment and knowledge generation that results in a persistent culture of innovative entrepreneurship. In Mecklenburg, such a culture did never emerge. Differences between the entrepreneurial ecosystems in the two regions especially pertain to the level of knowledge production and its link to new business formation in innovative and knowledge-intensive industries.
    Keywords: Entrepreneurship, entrepreneurial ecosystems, economic history, culture, regional development
    JEL: L26 M13 O1 O3 R11
    Date: 2022–12–20
  2. By: Jeworrek, Sabrina; Brachert, Matthias
    Abstract: We conduct a discrete choice experiment to investigate how the location of a firm in a rural or urban region affects job attractiveness and contributes to the spatial sorting of university students and graduates. We characterize the attractiveness of a location based on several dimensions (social life, public infrastructure, connectivity) and combine this information with an urban or rural attribution. We also vary job design as well as contractual characteristics of the job. We find that job offers from companies in rural areas are generally considered less attractive. This is true regardless of the attractiveness of the region. The negative perception is particularly pronounced among persons with urban origin and singles. These persons rate job offers from rural regions significantly worse. In contrast, high-skilled individuals who originate from rural areas as well as individuals with partners and kids have no specific preference for jobs in urban or rural areas.
    Keywords: discrete choice experiment,job characteristics,locational preferences,rural-urban divide
    JEL: J61 R12 R23 R58
    Date: 2022
  3. By: César Ducruet; Hidekazu Itoh
    Abstract: Based on untapped shipping and urban data, this article compares the diffusion of steam and container shipping at the port city level and at the global scale between 1880 and 2008. A temporal and multi-layered network is constructed, including the pre-existing technologies of sailing and breakbulk. The goal is to check the differences a) between innovations and their predecessors and b) between innovations, from an urban network perspective. Main results show that despite certain differences, such as historical context, voyage length, speed of diffusion, and geographical spread, the two innovations share a large quantity of similarities. They both fostered port concentration, were boosted by city size and port connectivity, bypassed upstream port sites, and diverged gradually from older technologies. This research thus contributes to the literature on cities, networks, innovation, and maritime transport.
    Keywords: containerization; maritime transport; port cities; regional disparity; spatial networks; steam shipping; technological change
    JEL: L91 N70 O18 R40
    Date: 2022
  4. By: S. Usai; F. Guy; A. Tidu
    Abstract: In this paper, we assess the viability of a geographic approximation aimed to reduce the computational intensity necessary to measure spatial agglomeration with Marcon & Puech's (2017) M index. Indeed, despite representing a potentially very accurate way of measuring spatial distribution, M has not been sufficiently exploited so far because its computation needs crossing every point (i.e. firms, plants) with each other within the area under analysis - such a figure rapidly grows to unmanageable levels when the area is larger than a neighborhood or when every industry is taken into account. Consequently, practical applications of M have been exclusively experimental and circumscribed to very limited areas or to a handful of sectors. In our opinion, this is much regrettable since M provides many advantages compared to conventional measures of spatial distribution and also to other distance measures. In order to verify whether a slight geographic approximation is tolerable – which would be consistent with Marcon & Puech's (2017, p. 30) assumption that "cumulative functions are insensitive to errors at smaller scales than the distance they consider" - we compute both actual M (with no approximation whatsoever) and approximate M for every industry in Sardinia. Our aim is to compare the results obtained when plants are located exactly where they are with those obtained when plants' positions are approximated to the centroid of the municipality where they are located. We rely on a comprehensive dataset that allows us to identify the location, the specific industry and the number of employees for every single plant, and not only for firms as a whole. Our dataset's scope is not restricted to manufacturing, as it is often the case, but covers every area of activity, ranging from construction to transports and from retailers to other service industries. Moreover, we did not considered distance between approximated positions as the crow flies, but we relied on actual street distance and travel time between them - in the frequent case of orographically dishomogenous territories, it might be the case that such a measurement more accurately reflects the actual distance between establishment, than theoretical flying distance between actual locations. If our approximation in the location of plants is positively outweighed by the great accuracy of M in operationalizing detailed geographic and economic information, then such an index could really be exploited for assessing agglomeration and dispersion patterns across space and along time, especially when much information is available, as it is ever more often the case.
    Keywords: spatial methods;sardinia;economic geography;distance-based measures;agglomeration
    Date: 2022
  5. By: Serenella Caravella; Valeria Cirillo; Francesco Crespi; Dario Guarascio; Mirko Menghini
    Abstract: The digital transformation is an important driver of long-run productivity growth and, as such, it has the potential to promote a more inclusive and sustainable growth. However, digital capabilities, crucial to develop and govern new digital technologies, are unevenly distributed across European regions increasing the risk of divergence and polarization. By taking advantage of a set of original indicators capturing the level of digital skills in the regional workforce, this work analyzes the factors shaping the process of digital skill accumulation in the EU over the period 2011-2018. Relying on transition probability matrices and dynamic random effects probit models, we provide evidence of a strong and persistent regional polarization in the adoption and deployment of digital skills. Further, we investigate whether European Funds (European Regional Development Fund, Cohesion Funds, and European Social Funds) are capable to shape the digitalization process and to favor regional convergence
    Keywords: Digital transition; Skills; Labour markets; Persistence; Regional development; EU policies
    JEL: O14 O30 O38
    Date: 2022–10
  6. By: Fernihough, Alan; Lyons, Ronan C.
    Abstract: Ireland developed one of the world's most intensive railroad networks in the second half of the 19th century. However, the emergence of railroads occurred in tandem with a failure to industrialize and mass depopulation suggesting limited, if any, impact on the island's economy. This paper examines this claim from a trade-based market-access perspective. Matching high-resolution geospatial data for nearly 3,400 districts to existing road and waterway networks as well as Ireland's nascent railroad network, we quantify the extent of market access improvements caused by rail. Additionally, we compute an external market access measure that accounts for improved access to international ports. Our findings reveal that this distinction is vital. Improvements in domestic market access brought about by railroads had a substantial positive influence on both population density and land values, while better access to ports had the opposite, negative, effect. Overall, these conflicting forces cancel out, hiding rail's importance. However, a supplementary analysis reveals that the introduction of rail fostered a significant reorientation within the economy across two key domains: emigration and the labour-intensiveness of agriculture. Areas with relatively more access to ports experienced greater levels of emigration and a faster switch from labor-intensive tillage to pastoral farming-with differential access explaining around two-fifths of the observed shift in both variables between the Great Famine and the Great War.
    Keywords: Ireland,Railways,Market Access,Emigration
    JEL: N14 N94 O18 R12 R4
    Date: 2022
  7. By: Ronan Lyons (Department of Economics, Trinity College Dublin); Elisa Maria Tirindelli (Department of Economics, Trinity College Dublin)
    Abstract: While city size and growth are the subject of a substantial literature, consensus is lacking on the extent to which Zipf's Law or Gibrat's Law holds across space and time. We examine city size, rank and growth in Britain 1801-2011 and show conclusions depend on city definition, sample cutoff and regression methods. We find Zipf's Law cannot be rejected under the strongest combination of data and methods, unlike if other data or methods are used. Across Zipf, Gibrat and Gini analyses, we find that urban concentration in Britain peaked in the mid-19th century but fell 1861-1911 and 1951-1991.
    Keywords: Great Britain; Zipf's Law; urban growth; Gibrat's Law
    JEL: N9 O18 R11 R12
    Date: 2022–09
  8. By: Stephan Heblich; Marlon Seror; Hao Xu; Yanos Zylberberg
    Abstract: We identify negative spillovers exerted by large, successful manufacturing plants on other local production facilities in China. A short-lived alliance between the U.S.S.R. and China led to the construction of 150 "Million-Rouble plants" in the 1950s. Our identification strategy exploits the ephemeral geopolitical context and the relative position of allied and enemy airbases to isolate exogenous variation in plant location decisions. We find a boom-and-bust pattern in hosting counties: treated counties are twice as productive as control counties in 1982, but 30% less productive in 2010. The average other establishment in treated counties is unproductive, does not innovate, and charges high markups. We find that (over)specialization limits technological spillovers. This prevents the emergence of new industrial clusters and leads to a flight of entrepreneurs.
    JEL: J24 N95 R11 R50
    Date: 2022–12
  9. By: Martin Christensen (World Bank); Damiaan Persyn (Thünen Institute)
    Abstract: We introduce endogenous labour supply decisions with an extensive and intensive margin in a regional computational general equilibrium model. We show that endogenising labour supply generates an additional economic loss compared to a model with fixed labour supply. Both the intensive margin and the extensive margin contribute to the higher cumulative loss in employment, consumption and GDP. A first insight from the general equilibrium framework is that the response at the external margin of labour supply is larger than what could be expected from considering wage elasticities alone, due to discouraged individuals choosing to stay out of the labour market in face of higher unemployment and a lower probability of finding a job. More insights are provided by the unique extensive regional dimension of our model. We show that country-level results hide substantial heterogeneity at the regional level. The results carry important lessons for macro-economic models used for policy evaluation: economic effects may be underestimated by models with fixed labour supply or models considering only the intensive margin of labour supply. Aggregate country level estimates may hide large differences in effects observed at the regional level.
    Keywords: General equilibrium modelling, labour supply, regional economics.
    JEL: C68 D58 J20
    Date: 2022–12
  10. By: Rainald Borck (University of Potsdam, CESifo, DIW Berlin); Philipp Schrauth (University of Potsdam)
    Abstract: We use worldwide satellite data to analyse how population size and density affect urban pollution. We find that density significantly increases pollution exposure. Looking only at urban areas, we find that population size affects exposure more than density. Moreover, the effect is driven mostly by population commuting to core cities rather than the core city population itself. We analyse heterogeneity by geography and income levels. By and large, the influence of population on pollution is greatest in Asia and middle-income countries. A counterfactual simulation shows that PM2.5 exposure would fall by up to 36% and NO2 exposure up to 53% if within countries population size were equalized across all cities.
    Keywords: population density, air pollution, gridded data
    JEL: Q53 R12
    Date: 2022–12
  11. By: Luisa Alamá-Sabater (Department of Economics and IIDL, Universitat Jaume I, Castellón, Spain); Miguel Ángel Márquez (Department of Economics, Universidad de Extremadura, Spain); Emili Tortosa-Ausina (IVIE, Valencia and IIDL and Department of Economics, Universitat Jaume I, Castellón, Spain); Júlia Cravo (Sectoral Business Statistics Unit, Instituto Nacional de Estatística, Lisboa, Portugal)
    Abstract: In the context of an extension of the traditional hypotheses considered by the Carlino-Mills studies, the primary aim of this paper is to test whether spillovers generated by employment change in urban or semi-urban areas have an impact on population growth in neighboring rural municipalities. To do this we develop a spatial econometric model capable of testing all the interactions existing between the different types of territories. We apply the model to 278 continental municipalities in Portugal during the period 2010–2018. The findings are particularly relevant in that they do not corroborate the “jobs follow people” hypothesis, and they reveal the positive and significant interterritorial connections between change in employment in semi-urban municipalities and population change in rural municipalities. The results suggest policies should aim to promote semi-urban-rural diffusion as a way of reversing rural depopulation.
    Keywords: depopulation, left-behind places, neighbors, rural, spatial effects, urban
    JEL: C3 O18 O21 R1 R23 R3
    Date: 2022
  12. By: PERTOLDI Martina (European Commission - JRC); FIORETTI Carlotta (European Commission - JRC); GUZZO Fabrizio (European Commission - JRC); TESTORI Giulia (European Commission - JRC); DE BRUIJN Martijn; FERRY Martin; KAH Stefan; SERVILLO Loris Antonio; WINDISCH Sissy
    Abstract: All places are important to the future wellbeing of Europe. The European Union (EU) is committed to ensuring that the development potential of places is uncovered and valorised. Integrated territorial and local development strategies promoted by EU cohesion policy are relevant tools to sustain this process. The ‘Handbook of Territorial and Local Development Strategies’ provides valuable knowledge on how to design and implement integrated strategies in areas other than urban areas. It aims to serve managing authorities of operational programmes, local strategy owners as well as other stakeholders involved in the process. The Handbook is a joint initiative by the European Commission’s Directorates-General for Regional and Urban Policy (DG REGIO) and the Joint Research Centre (JRC), and it benefits from the active contribution of policymakers, practitioners and scholars.
    Keywords: Integrated territorial development, Areas other than urban areas, Non-urban areas, Cohesion policy, Territorial tools, Community-led local development, Integrated territorial investment
    Date: 2022–11
  13. By: Peter Fisker (Development Economics Research Group, University of Copenhagen); Kenneth Mdadila (University of Dar es Salaam, School of Economics)
    Abstract: This paper combines information from a representative household survey with publicly available spatial data extracted from satellite images to produce a high-resolution poverty map of Dar es Salaam. In particular, it builds a prediction model for per capita household consumption based on characteristics of the immediate neighborhood of the household, including the density of roads and buildings, the average size of houses, distances to places of interest, and night-time lights. The resulting poverty map of Dar es Salaam dramatically improves the spatial resolution of previous examples. Extreme Gradient Boosting (XGB) performs best in predicting household consumption levels given the input data. This result demonstrates the simplicity with which policy-relevant information containing a spatial dimension can be generated.
    Keywords: Poverty, small-area estimation, building footprints, prediction models
    JEL: O18 Q54 R11
    Date: 2022–12–17

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