nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒03‒06
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Exposure to OFDI and regional labour markets: evidence for routine and non-routine jobs in Great Britain By Gagliardi, Luisa; Iammarino, Simona; Rodríguez-Pose, Andrés
  2. Who Learns More from Afar? Spatial Empirical Evidence on Manufacturing and Services By Nina Vujanović
  3. The future geography of industries and occupations By Chiara Burlina; Andres Rodriguez-Pose; ;
  4. Transition Probabilities, Wages and Regional Human Capital Stocks By Augustin de Coulon; Larissa da Silva Marioni; Mary O'Mahony
  5. Playing the innovation subsidy game: experience, clusters, consultancy, and networking in regional innovation support By Rodríguez-Pose, Andrés; Belso-Martinez, Jose Antonio; Díez-Vial, Isabel
  6. Firm-level productivity growth returns of social capital: Evidence from Western Europe By Roberto Ganau; Andres Rodriguez-Pose; ;
  7. Heterogeneous Adjustments of Labor Markets to Automation Technologies By Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
  8. Cross-Border Shopping: Evidence from Swiss Household Consumption By Frédéric Kluser
  9. Efficient Estimation of Spatial Econometric Interaction Models for Sparse OD Matrices By Thomas-Agnan, Christine; Dargel, Lukas
  10. Space matters: A methodology for CityLabs By IODICE Silvia; SULIS Patrizia; TESTORI Giulia; ALBERTI Marina; CIUFFO Biagio; DUARTE Fábio; DUNLOP Tessa; FLORES HERNANDEZ Angel Luis; GUIMARAES PEREIRA Ângela; KATRINI Eleni; LAURILA Pia; ALONSO RAPOSO Maria; RITTER Frenzi; ROEMERS Gerard; SCHEURER Lea; TARANTOLA Stefano; VAN HEERDEN Sjoerdje

  1. By: Gagliardi, Luisa; Iammarino, Simona; Rodríguez-Pose, Andrés
    Abstract: This article explores the role of subnational geography in the analysis of the consequences of Outward Foreign Direct Investment (OFDI) for workers performing different typologies of jobs. We qualify jobs according to their knowledge content, degree of tradability and response to agglomeration economies. While the former two dimensions are key to signal the intensity to OFDI exposure of different typologies of jobs, the latter contributes to explain the unequal spatial distribution of benefits and losses from OFDI in terms of job creation/destruction. We theorise areas that are more severely exposed to OFDI experience job losses in routine occupations, whereas they do not necessarily benefit from job creation in non-routine jobs. To test our hypothesis, we make use of a balanced panel dataset at the local labour market level, exploiting variations in OFDI exposure and in the job composition of local areas. Our findings—robust to numerous checks, including unobserved global and local trends—indicate that job losses concentrate in regions that were more exposed to OFDI based on their initial industry mix, and affect individuals performing mainly routine tasks. In these same areas, however, no significant effects are found when looking at job creation in non-routine occupations.
    Keywords: OFDI; local labour markets; Routine and non-routine occupations; Home impact of MNEs
    JEL: R14 J01
    Date: 2021–09–01
  2. By: Nina Vujanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper investigates spatial dependence of FDI knowledge spillovers in manufacturing and services using spatial panel techniques applied to the 2006-2014 Bureau Van Dijk’s Amadeus firm-level dataset for Croatia and Slovenia. The paper finds diverse results across the two sectors. The distance between regions does not hinder the absorption of foreign knowledge in manufacturing despite the strong market-stealing effects operating within regions as well as spatially. On the other hand, FDI knowledge spillovers decrease service productivity within regions, because of market-stealing effects operating strongly across a smaller geographical scale. However, its impact is lost as knowledge spillovers from more distant neighbours are accounted for, because the poaching of local labour is impeded by distance due to rising costs of labour mobility. The research indicates that for knowledge absorption, geographic distance plays differing roles in manufacturing and services, due to the different nature of the production process.
    Keywords: knowledge spillovers, FDI, spatial econometrics, manufacturing, services
    JEL: F23 L6 L8 L2 O3 O4
    Date: 2023–02
  3. By: Chiara Burlina; Andres Rodriguez-Pose; ;
    Abstract: COVID-19 is mostly considered to have ravaged places with high levels of inequality and poverty. Yet, in the case of Europe, the evidence for this is limited. In this paper we address this gap in our knowledge by exploring how regional variations in poverty, wealth, and inter-personal inequality have shaped COVID-19-related excess mortality. The results show that during the first 18 months of the pandemic there is no link between inequality and poverty, on the one hand, and the lethality of the disease, on the other. The geographical concentration of wealthy people is related to more, not less, excess mortality.
    Keywords: COVID-19, pandemic, inequality, poverty, institutions, regions, Europe
    JEL: D31 O43 R58
    Date: 2023–02
  4. By: Augustin de Coulon; Larissa da Silva Marioni; Mary O'Mahony
    Abstract: This paper aims to look at regional mobility in the UK and its impact on regional human capital stocks. We estimate regional transitions probabilities from and to regions. We do this using different regional aggregation levels, by demographics characteristics and education status. Our results show that mobility appears heavily concentrated amongst the young and educated populations. The results suggest little changes over recent periods. Using these regional mobility transitions, we find that regional human capital stocks can be misleading if one does not take into account regional mobility of young people.
    Keywords: skills, human capital, mobility, migration
    JEL: J6 O4 R1
    Date: 2022–11
  5. By: Rodríguez-Pose, Andrés; Belso-Martinez, Jose Antonio; Díez-Vial, Isabel
    Abstract: Government support to promote firm-level innovation is seen as a crucial factor for economic growth. This support is frequently channeled through firm-level subsidies. Despite their relevance within the policy portfolio, there is an open academic debate on whether subsidies are effective for innovation. This is by no means related to a potential inadequacy of subsidies, but because the mechanisms of assignment may be unsatisfactory. We argue that this may be the case when subsidies are awarded to larger firms with a solid international and innovative trajectory or to those that know how toplay the system, ” rather than to the most deserving firms and projects. To test whether this is the case, we use data from 17, 866 applicants for innovation subsidies managed by the Valencian Institute of Competitiveness. We find that firms with specific knowledge accrued through previous submissions, public funding and grant consultancy or cluster location, are the main beneficiaries of public innovation support, generally at the expense of more promising candidates that lack the know-how to navigate a complex and often flawed process. This inertia gets policy-makers stuck in a sub-optimal assignment system that should be deeply reconsidered.
    Keywords: clusters; consultancy services; innovation policy; networks; previous subsidy experience
    JEL: R14 J01 J1
    Date: 2021–12–01
  6. By: Roberto Ganau; Andres Rodriguez-Pose; ;
    Abstract: We analyse the firm-level labour productivity growth returns of social capital —defined as a synthetic measure of ‘generalised trust’, ‘active participation’, and ‘social norms’— using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms’ labour productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.
    Keywords: Firm labour productivity growth; Social capital; Manufacturing industry; Western Europe.
    JEL: C36 D24 R10 Z13
    Date: 2023–02
  7. By: Fabien Petit; Florencia Jaccoud; Tommaso Ciarli
    Abstract: This paper examines the labor market adjustments to four automation technologies (i.e. robots, communication technology, information technology, and software/database) in 227 regions across 22 European countries from 1995 to 2017. By constructing a measure of technology penetration, we estimate changes in regional employment and wages affected by automation technologies along with the reallocation of workers between sectors. We find that labor market adjustments to automation technologies differ according to i) the technology involved, ii) the sector of penetration, iii) the sectoral composition of the region, and iv) the region’s technological capabilities. These adjustments are driven largely by the reallocation of low-paid workers across sectors.
    Keywords: automation technology, labor market, employment reallocation, sectoral composition
    JEL: J21 O33 R23
    Date: 2023
  8. By: Frédéric Kluser
    Abstract: Cross-border shopping allows purchasing comparable goods at lower prices abroad. Meanwhile, it can reduce domestic consumption, sales, and tax collection. During the Covid-19 pandemic, the Swiss government closed all national borders to mitigate the virus's spread, thereby prohibiting cross-border shopping. I exploit the random timing of this policy using data on 600 million household-level transactions from the largest Swiss retailer to identify patterns in cross-border shopping. I find that grocery expenditures increased by 10-15% in border regions. Households drive for up to 70 minutes to a cross-border location, but the distance decay function is non-linear and marginal costs of traveling become negligible after 40 minutes.
    Keywords: economic geography, consumption, consumption access, consumption inequality, spatial competition
    JEL: R1 R2 L14
    Date: 2023–02
  9. By: Thomas-Agnan, Christine; Dargel, Lukas
    Abstract: In the framework of spatial econometric interaction models for origin-destination flows, we develop an estimation method for the case when the list of origins may be distinct from the list of destinations, and when the origin-destination matrix may be sparse. The proposed model resembles a weighted version of the one of LeSage (2008) and we are able to retain most of the efficiency gains associated with the matrix form estimation, which we illustrate for the maximum likelihood estimator. We also derive computationally feasible tests for the coherence of the estimation results and present an efficient approximation of the conditional expectation of the flows, marginal effects and predictions.
    Keywords: Spatial Econometric;; Interaction Models;; Zero Flow Problem;; OD Matrices;; Networks;
    JEL: C21 C51
    Date: 2023–02–08
  10. By: IODICE Silvia (European Commission - JRC); SULIS Patrizia (European Commission - JRC); TESTORI Giulia (European Commission - JRC); ALBERTI Marina; CIUFFO Biagio (European Commission - JRC); DUARTE Fábio; DUNLOP Tessa (European Commission - JRC); FLORES HERNANDEZ Angel Luis; GUIMARAES PEREIRA Ângela (European Commission - JRC); KATRINI Eleni; LAURILA Pia; ALONSO RAPOSO Maria; RITTER Frenzi; ROEMERS Gerard; SCHEURER Lea; TARANTOLA Stefano (European Commission - JRC); VAN HEERDEN Sjoerdje (European Commission - JRC)
    Abstract: This report illustrates the activities and outcomes of the Exploratory Research Activity ‘Space matters: How to develop a common methodology for CityLabs’, developed by the Territorial Development Unit of the Joint Research Centre between October 2021 and September 2022. The main aim was to develop an up-to-date, robust and flexible methodology that could be applied to future CityLabs. A CityLab is a participatory research format where the JRC works in close contact with a specific European municipality to collectively gather quantitative and qualitative data on a specific trend or discuss and spatialise the impact of a specific urban policy. The topics under observation are place-based and vary according to the urban context being analysed. The ERA activities included one workshop with internal experts from the European Commission highlighting knowledge and current projects in the JRC and one workshop with experts from academia, planning practices and policy networks highlighting the state-of-the-art, good practices and successful examples of urban labs. Contributions fed the development of a methodology that is modular, flexible and adaptable to future CityLabs organised among partners. The methodology and best practices presented in the report contribute to evaluating the impact of European policy at the urban level and to informing cities of their policy coherence with European frameworks and priorities, as well as funding opportunities that support cities.
    Keywords: CityLabs
    Date: 2023–01

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