nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒05‒08
four papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Navigating the Geography of Regional Disparities: Market Access and the Core-Periphery Divide By Gabrielle Gambuli
  2. Local and National Concentration Trends in Jobs and Sales: The Role of Structural Transformation By David Autor; Christina Patterson; John Van Reenen
  3. Are digital technologies reshaping trade patterns? Evidence from European industries By Marco Sforza
  4. LOCAL LABOUR TASKS AND PATENTING IN US COMMUTING ZONES By Marialuisa Divella; Alessia Lo Turco; Alessandro Sterlacchini

  1. By: Gabrielle Gambuli (Université de Cergy-Pontoise, THEMA)
    Abstract: This paper investigates the impact of market proximity on subnational development worldwide, considering the heterogeneous effects on core and peripheral regions, as well as on countries with different income levels. A gravity-based market potential index is revised to accurately assess distances for land and maritime trips to better capture geographic limitations. Estimations are performed in cross-section with country-fixed effects, by addressing endogeneity issues with instrumental variables. Robustness checks are also conducted with panel data on a smaller sample. The findings reveal that regions with better access to markets and port experience higher regional income per capita, with the effect being higher for wealthier regions. Peripheral regions consistently exhibit a 2 percentage point lower elasticity to market potential compared to core regions. The paper also highlights the potential negative impact of proximity to foreign markets on peripheral regions. These results suggest that policies which aim at improving the connectivity of peripheral regions to core domestic markets could help mitigate the adverse effects of foreign competition and reduce regional disparities within countries.
    Keywords: International Trade, Market Potential, Economic Geography, Regional Development, Core-Periphery.
    JEL: F14 F15 O18 R11
    Date: 2023
  2. By: David Autor; Christina Patterson; John Van Reenen
    Abstract: National industrial concentration in the U.S. has risen sharply since the early 1980s, but there remains dispute over whether local geographic concentration has followed a similar trend. Using near population data from the Economic Censuses, we confirm and extend existing evidence on national U.S. industrial concentration while providing novel evidence on local concentration. We document that the Herfindhahl index of local employment concentration, measured at the county-by-NAICS six-digit-industry cell level, fell between 1992 and 2017 even as local sales concentration rose. The divergence between national and local employment concentration trends is attributable to the structural transformation of U.S. economic activity: both sales and employment concentration rose within industry-by-county cells; but reallocation of sales and employment from relatively concentrated Manufacturing industries (e.g., steel mills) towards relatively un-concentrated Service industries (e.g. hair salons) reduced local concentration. A stronger between-sector shift in employment relative to sales drove the net fall in local employment concentration. Holding industry employment shares at their 1992 level, average local employment concentration would have risen by about 9% by 2017. Instead, it fell by 5%. Falling local employment concentration may intensify competition for recent market entrants. Simultaneously, rising within industry-by-geography concentration may weaken competition for incumbent workers who have limited sectoral mobility. To facilitate analysis, we have made data on these trends available for download.
    JEL: E23 J42 L10 L11 L22 R11 R12
    Date: 2023–04
  3. By: Marco Sforza (Department of Economics, Roma Tre University)
    Abstract: The paper explores the relationship between the industry-level diffusion of digital technologies and the regionalisation of trade in value added. Theoretical literature underlines two potential effects of these technologies. They may facilitate coordination, favouring higher fragmentation, but also redefine comparative advantages, pushing toward relocation. The aim of the paper is to provide empirical evidence on the relationship between digital technologies and trade regionalisation, for a panel of selected European countries and sectors over the period 2005-2018. I build a dataset combining data from TiVA-OECD, EU-KLEMS and Eurostat SBS. I define two regionalisation measures, comparing intra-EU against extra-EU trade flows, to capture the relative importance of the two regions for input sourcing and output destination. The econometric analyses show a differentiated effect on the two measures: digital capital reduces regionalisation of the input sourcing, while positively correlating with the regionalisation of the intermediate output. Finally, a differentiated effect is also found in magnitude between technologies, namely, physical ICT and software.
    Keywords: Digital technologies; Global Value Chains; Trade regionalisation
    JEL: O33 F10 F15
    Date: 2023–04
  4. By: Marialuisa Divella (Department of Political Sciences, Universita' degli Studi di Bari); Alessia Lo Turco (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)); Alessandro Sterlacchini (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM))
    Abstract: In this paper we adopt a task approach to measure the local pool of capabilities which can more effectively spur innovation. By focusing on the core activities that workers undertake in their jobs, we build an abstract task intensity measure of occupations to proxy the ability in analysing and solving complex problems, as well as in coordinating and integrating people with different knowledge endowments, that should be especially relevant for the process of invention and innovation. We thus estimate the relationship between the local abstract intensity and the inventive performance, proxied by granted patents, of US Commuting Zones during the period 2000-2015. The evidence provided, robust to a wide array of sensitivity checks, points to the extent of workers’ engagement in abstract tasks across Commuting Zones as a crucial determinant of the local inventive activity.
    Keywords: human capital, labour tasks, local abstract intensity, patents, US Commuting Zones
    JEL: R10 R12 O31 O33
    Date: 2023–04

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