nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒05‒29
ten papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Robust labour-flow networks of industries make resilient regions By Zoltan Elekes; Gergo Toth; Rikard Eriksson
  2. The Economics of Cities: From Theory to Data By Stephen Redding
  3. From Regional to Global and Back Again? A Future Agenda for Regional Evolution and (De)Globalized Production Networks in Regional Studies By Henry Wai-chung; ;
  4. Left-behind versus unequal places: interpersonal inequality, economic decline, and the rise of populism in the USA and Europe By Rodríguez-Pose, Andrés; Terrero-Davila, Javier; Lee, Neil
  5. University as a Knowledge Source of Innovation: A spatial analysis of the impact on local high-tech startup creation By MOTOHASHI Kazuyuki; ZHAO Qiuhan
  6. Second-Hand Gentrification: Theory and Evidence from High-Speed Rail Extensions By Gabriel Loumeau; Antonio Russo
  7. Local labour markets and spatial determinants of overeducation By Florian Fouquet
  8. The Evolution of Local Labor Markets After Recessions By Brad Hershbein; Bryan Stuart
  9. What draws investment to special economic zones? Lessons from developing countries By Frick, Susanne; Rodríguez-Pose, Andrés
  10. Estimating Input Coefficients for Regional Input-Output Tables Using Deep Learning with Mixup By Shogo Fukui

  1. By: Zoltan Elekes; Gergo Toth; Rikard Eriksson
    Abstract: This paper explores how the network structure of local inter-industry labour flows relates to regional economic resilience across 72 local labour markets in Sweden. Drawing on recent advancements in network science we stress-test these networks against the sequential elimination of their nodes, finding substantial heterogeneity in network robustness across regions. Regression analysis with LASSO selection in the context of the 2008 crisis indicates that labour flow network robustness is a prominent structural predictor of employment change during crisis. These findings elaborate on how variation in the self-organisation of regional economies as complex systems makes for more or less resilient regions.
    Keywords: local capability base; inter-industry labour flows; skill-relatedness; network robustness; regional economic resilience; regional employment
    JEL: J21 L14 R11 R23
    Date: 2023–05
  2. By: Stephen Redding (Princeton University, NBER, and CEPR)
    Abstract: Economic activity is highly unevenly distributed within cities, as reflected in the concentration of economic functions in specific locations, such as finance in the Square Mile in London. The extent to which this concentration reflects natural advantages versus agglomeration forces is central to a range of public policy issues, including the impact of local taxation and transport infrastructure improvements. This paper reviews recent quantitative urban models, which incorporate both differences in natural advantages and agglomeration forces, and can be taken directly to observed data on cities. We show that these models can be used to estimate the strength of agglomeration forces and evaluate the impact of transportation infrastructure improvements on welfare and the spatial distribution of economic activity.
    Keywords: cities, commuting, transportation, urban economics
    JEL: R32 R41 R52
    Date: 2023–01
  3. By: Henry Wai-chung; ;
    Abstract: This paper builds common grounds for a future research agenda in the regional studies of evolutionary economic geography and global production networks. I put forward two “troubling themes†of (geo)politics and heightened risks as the most disruptive forces in today’s increasingly fragmented global economy and argue for their significance in regional studies throughout the post-pandemic 2020s. Massive global change through the reconfiguration of and strategic (de/re)coupling with global production networks will engender new path formation in regional transformation. In this analytical move from the global “back again†to the regional, there are common questions on epistemology (causal explanations) and substantive issues (network/regional resilience; institutions/the state; inequalities/uneven development; new forms of regional policies) for both communities of researchers.
    Keywords: evolutionary economic geography; global production networks; geopolitics; risks; regional economies; research agenda
    Date: 2023–05
  4. By: Rodríguez-Pose, Andrés; Terrero-Davila, Javier; Lee, Neil
    Abstract: Economic change over the past twenty years has rendered many individuals and territories vulnerable, leading to greater interpersonal and interterritorial inequality. This rising inequality is seen as a root cause of populism. Yet, there is no comparative evidence as to whether this discontent is the consequence of localised interpersonal inequality or stagnant growth in ‘left-behind’ places. This paper assesses the association between levels and changes in local GDP per capita and interpersonal inequality, and the rise of far-right populism in Europe and in the US. The analysis —conducted at small region level for Europe and county level for the US— shows that there are both similarities and differences in the factors connected to populist voting on both sides of the Atlantic. In the US, neither interpersonal inequality nor economic decline can explain populist support on their own. However, these factors gain significance when considered together with the racial composition of the area. Counties with a large share of white population where economic growth has been stagnant and where inequalities have increased supported Donald Trump. Meanwhile, counties with a similar economic trajectory but with a higher share of minorities shunned populism. In Europe, the most significant factor behind the rise of far-right populism is economic decline. This effect is particularly large in areas with a high share of immigration.
    Keywords: populism; anti-system voting; interpersonal inequality; interterritorial inequality; economic growth; Europe; US
    JEL: D31 D72 R11
    Date: 2023–04–17
  5. By: MOTOHASHI Kazuyuki; ZHAO Qiuhan
    Abstract: This study contributes to the empirical analysis of specific distances in knowledge spillover effects. We propose a geographical distance-based approach to precisely measure the proximity of knowledge spillover from a university's research activities to high-tech startups in surrounding regions. Most current research measuring knowledge spillover typically use states and cities as the statistical caliber, making it difficult to capture the exact extent of knowledge spillover within cities. In this study, we constructed panel data for Japan for 1998-2018 by dividing the research area into 1*1 km2 meshes and geocoding firms (high-tech startups and firms without patents), university patents, and paper data, and subsequently using each mesh as the basic unit. Additionally, variables containing geographical proximity information were calculated by constructing multiple buffers for each mesh. Our findings show that i) the spillover effects of university research attenuate with distance - rapidly within a 2 km range, and slowly thereafter; and ii) patents are more private and localized than papers. The knowledge spillover effect of university patents attenuates more rapidly with distance.
    Date: 2023–04
  6. By: Gabriel Loumeau (Department of Spatial Economics, VU Amsterdam, The Netherlands.); Antonio Russo (Department of Economics, University of Sheffield, Sheffield S1 4DT, UK.)
    Abstract: Does gentrification spread along intercity transport connections? We consider a model with heterogeneous individuals populating a primary and a secondary city. By reducing intercity commuting costs, transport connections induce mi- gration of skilled individuals towards the secondary city, which increases housing prices. We call this effect second-hand gentrification. We confirm these predictions using the 2017 expansion of the French HSR network from Paris to Bordeaux and Rennes. We find that the HSR connection induced skilled Parisians to move to Bordeaux and Rennes. Housing prices there consequently increased (+10.6%), as well as the median income (+2.5%), and within-neighborhood income inequality (+2%).
    Keywords: Gentrification, High-Speed Rail, Housing Market, Intercity Travel
    JEL: R23 R11 R41
    Date: 2023–05
  7. By: Florian Fouquet (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - ONIRIS - École nationale vétérinaire, agroalimentaire et de l'alimentation Nantes-Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université)
    Abstract: This paper investigates the spatial dimension of overeducation and its incidence on local labour markets. Spatial Durbin panel models, using both static and dynamic specifications, are run on French employment areas between 2009 and 2017. I find that the lack of job opportunities affects overeducation both locally in the neighbouring areas. I also find that the geography of local labour markets does not have the same impact on educational mismatch for all workers, with young workers being less affected by the situation in other areas. Finally, I find that overeducation is related to opportunities in rural areas, and to competition in urban areas.
    Keywords: Spatial heterogeneity, Spatial panel models, Overeducation, Educational mismatches, Local labour markets
    Date: 2023–02
  8. By: Brad Hershbein; Bryan Stuart
    Abstract: This paper studies how U.S. local labor markets respond to employment losses after recessions. Following each recession between 1973 and 2009, we find that areas that lose more jobs during the recession experience persistent relative declines in employment and population. Most importantly and contrary to prior work, these local labor markets also experience persistent decreases in the employment-population ratio and per capita earnings. Our results imply that limited population responses result in longer-lasting consequences for local labor markets than previously thought, and that recessions are followed by persistent reallocation of employment across space.
    Keywords: local labor markets; recessions; employment rates; migration
    JEL: J21 J61 R23
    Date: 2022–05–09
  9. By: Frick, Susanne; Rodríguez-Pose, Andrés
    Abstract: Special Economic Zones (SEZs) are a popular policy tool for the promotion of economic development. However, questions remain about their economic contribution and about what aspects of SEZ policies are most relevant to investors. This article sheds light on these issues by comparing SEZs across Africa, Asia and Latin America. We find that, while investment decisions by foreign companies are driven by market access, political stability and low labour costs, adequate SEZ policies facilitate the attraction of investment. A good industrial infrastructure together with a strategic location and service provision within the zones draw investment. Fiscal incentives, by contrast, have a limited influence on investment decisions.
    Keywords: special economic zones; inward investment; industrial policy; developing countries; FDI location decision
    JEL: F21 O14 O24 L52
    Date: 2023–04–19
  10. By: Shogo Fukui
    Abstract: An input-output table is an important data for analyzing the economic situation of a region. Generally, the input-output table for each region (regional input-output table) in Japan is not always publicly available, so it is necessary to estimate the table. In particular, various methods have been developed for estimating input coefficients, which are an important part of the input-output table. Currently, non-survey methods are often used to estimate input coefficients because they require less data and computation, but these methods have some problems, such as discarding information and requiring additional data for estimation. In this study, the input coefficients are estimated by approximating the generation process with an artificial neural network (ANN) to mitigate the problems of the non-survey methods and to estimate the input coefficients with higher precision. To avoid over-fitting due to the small data used, data augmentation, called mixup, is introduced to increase the data size by generating virtual regions through region composition and scaling. By comparing the estimates of the input coefficients with those of Japan as a whole, it is shown that the accuracy of the method of this research is higher and more stable than that of the conventional non-survey methods. In addition, the estimated input coefficients for the three cities in Japan are generally close to the published values for each city.
    Date: 2023–05

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