nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒06‒19
fifteen papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional Productivity Network in the EU By Camilla Mastromarco; Laura Serlenga; Yongcheol Shin
  2. General Equilibrium Analysis of Fiscal Transfers in an Aging Society By Naoki Tani; Yuki Uemura
  3. The Future of EU Cohesion - Effects of the Twin Transition on Disparities across European Regions By Ambre Maucorps; Roman Römisch; Thomas Schwab; Nina Vujanović
  4. The Worth of Cities in Germany By Gehr, Katja; Pflüger, Michael P.
  5. Bilateral Regional Trade Flows in Italy: an Origin-Destination-Commodity GWR-SAR approach By Alessio Baldassarre; Danilo Carullo; Paolo Di Caro; Elisa Fusco; Pasquale Giacobbe; Carlo Orecchia
  6. Challenges of studying agency in regional development: What did 27 review reports teach us? By Sotarauta, Markku; Grillitsch, Markus
  7. Productivity Spillovers among Knowledge Workers in Agglomerations: Evidence from GitHub By Lena Abou El-Komboz; Thomas Fackler
  8. Market size, trade, and productivity reconsidered: Poverty traps and the home market effect By Berliant, Marcus; Tabuchi, Takatoshi
  9. The Geography of Intergenerational Education Mobility in Italy: Trends and Mediating Factors By Debora Di Gioacchino; Laura Sabani; Stefano Usai
  10. The measurement of segregation sensitive spatial income deprivation By Francesco Andreoli; Vincenzo Prete; Claudio Zoli
  11. The characteristics and geographic distribution of robot hubs in U.S. manufacturing establishments By Brynjolfsson, Erik; Buffington, Catherine; Goldschlag, Nathan; Li, J. Frank; Miranda, Javier; Seamans, Robert
  12. Revealing the role of subjective geographic proximity in the use of medical services: a quantitative case study in a French metropolitan suburb By Alexis Pokrovsky; Romain Aeberhardt; Sandra Charreire Petit; Damien Talbot
  13. Impact of Climate Change on Economic Growth: A Case Study of India By Medhavi Sandhani; Anubhab Pattanayak; K.S. Kavi Kumar
  14. Role of ICT Dissemination and Digital Finance in Poverty Eradication and Income Inequality Reduction: A Sub-national Level Study from India By Simontinti Das; Amrita Chatterjee
  15. Early railways and industrial development: Local evidence from Sardinia in 1871–1911 By U.M. Gragnolati; L. Moretti; R. Ricciuti

  1. By: Camilla Mastromarco; Laura Serlenga; Yongcheol Shin
    Abstract: We develop a unified stochastic frontier model which controls for the local spatial correlation and the global factor dependence as well as parameter heterogeneity, simultaneously. We then propose the regional productivity network analysis to examine the diffusion impacts of the capital intensity on the labour productivity in the EU. We apply the proposed approach to the dataset consisting of 202 regions in the EU15 countries over 1980-2019, and convincingly unveil that the technological shock diffuses from efficient regions operating on or near the frontier to inefficient regions. This suggests that policies to enhance domestic absorption capacity appear better suited to net receivers of technological shocks whilst policies to attract more R&D investments are appropriate to their transmitters. In this regard we stress the importance of investing European funds in peripheral regions to address regional inequality and polarisation.
    Keywords: spatial stochastic frontier model with factors and heterogeneity, CCEX-IV estimator, regional productivity network analysis in the EU, efficiency clusters
    JEL: C13 C33 D24 O47
    Date: 2023
  2. By: Naoki Tani (Institute of Economic Research, Kyoto University); Yuki Uemura (Graduate School of Economics, Kyoto University)
    Abstract: We analyze fiscal transfer policies using a quantitative spatial general equilibrium model given heterogeneous local productivities and amenities, migration of young and elderly population, and inter-regional trade. We confirm that fiscal transfers improve welfare by reducing congestion in urban areas and increasing public services and real wages in rural areas. Contrary to the literature, introducing mobility of elderly population indicates possibility of optimal transfers that enable the central government to accomplish welfare gains without sacrificing national output. We calibrate the model to the Japanese economy and conduct some counterfactual simulations. The results show that Japans’ central government’s current fiscal transfers improve welfare of young and old population by 17.5% and 20.4%, respectively, compared with a zero-transfer case. However, they reduce national output by 12.5%. If the central government makes the transfers at a uniform rate across regions, it improves welfare of working and old population by 20.3% and 27.2%, respectively, compared with the zero-transfer case, without reducing the national output.
    Keywords: Economic geography; Place-based policies; Population aging; Agglomeration force
    JEL: H20 H77 R12 R13
    Date: 2023–05
  3. By: Ambre Maucorps (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw); Thomas Schwab; Nina Vujanović (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Closing the prosperity gap between regions has always been a key political aspiration of the European Union – and cohesion policy is the primary means to achieve that goal. Europe is currently undergoing a digital and green transition that is drastically changing the way its economy works. How well prepared are regions to capitalise on the twin transition? And what impact will it have on regional cohesion in Europe? Our study finds that greening and digitalising the economy will likely widen the gap between rich and poor regions in Europe.
    Keywords: EU, EU regions, regional development, digitalisation, green transition, cohesion
    JEL: R11 O21
    Date: 2023–05
  4. By: Gehr, Katja (University of Würzburg); Pflüger, Michael P. (University of Würzburg)
    Abstract: This paper extends the urban growth model of Duranton and Puga (2022) to explore the impact of cities on local firms and households and the aggregate economy of Germany. We adopt alternative micro-foundations for agglomeration economies and a non-linear specification of human capital accumulation. This allows us to characterize the social optimum and to bring the model in line with semi-endogenous growth. We also innovate by incorporating consumptive amenities and fiscal transfers into the model. On the empirical side we exploit the structural equations of the model and rich sets of micro-data for Germany's labor markets, housing rents, and household travel-to-work data, to estimate the population elasticities of urban benefits and costs. We are the first to establish elasticities for urban costs for Germany, an estimated elasticity of commuting costs with respect to distance travelled of 0.071, and an estimate for the population elasticity of travel congestion of 0.068. Our estimates for static and dynamic agglomeration elasticities are 0.017 and 0.020, respectively. We innovate on the calibration strategy to capture the important role of consumptive amenities and fiscal transfers in Germany. The model innovations and calibration are shown to be strongly supported by several pieces of evidence. Our key policy counterfactual is a proportionate increase of the population in Germany's Top Seven metropolises by 10% which implies a significant overall welfare benefit of 1.12% per person. This involves mild losses for city incumbents but strong gains for city newcomers. We also address the effects of a counter-factual shift to the social optimum and a counterfactual removal of fiscal transfers. Our final exercise evaluates the implications of cities and agglomeration economies for aggregate growth in Germany. We find that these account for 0.011 additional percentage points of growth in income per capita per year.
    Keywords: city systems, urban growth, agglomeration and dispersion economies, land-use regulations
    JEL: C52 R12 D24
    Date: 2023–05
  5. By: Alessio Baldassarre (Ministry of Economy and Finance); Danilo Carullo (Ministry of Economy and Finance); Paolo Di Caro (University of Catania); Elisa Fusco (Sogei SpA Italy); Pasquale Giacobbe (University of Calabria); Carlo Orecchia (Ministry of Economy and Finance)
    Abstract: The main purpose of this paper is to present an innovative approach to estimate the Italian inter-regional trade flows in terms of final and intermediate consumption. It contributes to the literature in several ways. The first innovative feature concerns the data used in the analysis. We reconstruct the flow of households’ final consumption by using administrative data from the Italian VAT returns. The result is then used for estimating a traditional gravity model for final consumption trade; the estimated coefficients are furtherly exploited to compute the flows of intermediate consumption. The second contribution relates to the modeling approach: we combine the literature on gravity models with a spatial autoregressive specification, to take into account spatial dependence in the bilateral flows, and a geographically weighted regression estimator, to control for behavioral instability of data over space. In addition to that, our model controls for commodity dependence by including them as a fixed effect in a pseudo-panel view, where the time dimension captures the commodities dynamics. Therefore, the strategy here introduced is useful to consider both local level economic relations and spillovers, existing between regions, and the link among different types of products.
    Keywords: Inter-regional flows; Gravity models; O-D Spatial autoregressive models; Geographically Weighted Regression
    JEL: C21 D57 R15
    Date: 2023–05
  6. By: Sotarauta, Markku (Tampere University); Grillitsch, Markus (CIRCLE, Lund University)
    Abstract: The regional development studies community increasingly considers the significance of agency when working to reveal the secrets of local and regional development. While the rapidly emerging literature on agency has increased our understanding of what people do or fail to do for their regions, many scholars have faced challenges incorporating novel conceptual lenses in a discipline more accustomed to studying structures. With the aim to contribute to a collective learning process, we analyze 27 review reports received for a special issue in Regional Studies on “Agency and Regional Development Against All Odds”. We found challenges, for instance, related to articulating the contribution, conceptual layering and drift, and slippery research questions. These three challenges point to the need to decide on the main concept and theory (the hero of the dish), which is particularly challenging and daunting when it requires sacrificing safe conceptual terrain and exploring a more unknown, emerging field. The authors of the special issue have responded brilliantly to the reviewers’ recommendations and with these reflections, we hope to share this learning experience. The work, however, continues - to improve our capacity to study human agency, we must take pains to clarify meta-theoretical commitments, elaborate middle-range theories, and experiment with a variety of methods. The growing body of work on the relationships between human agency and structures is an exciting ontological, theoretical, and methodological programme in the making.
    Keywords: Agency and structure; methodology; regional development
    JEL: B52 R10 R50
    Date: 2023–06–02
  7. By: Lena Abou El-Komboz (ifo Institute, LMU Munich); Thomas Fackler (ifo Institute, LMU Munich, CESifo, Laboratory for Innovation Science at Harvard)
    Abstract: Software engineering is a field with strong geographic concentration, with Silicon Valley as the epitome of a tech cluster. Yet, most studies on the productivity effects of agglomerations measure innovation with patent data, thus capturing only a fraction of the industry's activity. With data from the open source platform GitHub, our study contributes an alternative proxy for productivity, complementing the literature by covering a broad range of software engineering. With user activity data covering the years 2015 to 2021, we relate cluster size to an individual's productivity. Our findings suggest that physical proximity to a large number of other knowledge workers in the same field leads to spillovers, increasing productivity considerably. In further analyses, we confirm the causal relationship with an IV approach and study heterogeneities by cluster size, initial productivity and project characteristics.
    Keywords: agglomeration effects; knowledge spillovers; open source; online collaboration;
    JEL: D62 J24 O33 O36 R32
    Date: 2023–05–26
  8. By: Berliant, Marcus; Tabuchi, Takatoshi
    Abstract: To investigate questions related to migration and trade, a model of regional or international development is created by altering Melitz and Ottaviano (2008) to include a labor market. The model is then applied to analyze poverty traps and the home market effect. We find that in the spatial economics context of migration but no trade, poverty can persist unless population in one region of many is pushed past a threshold. Then growth commences. In the context of trade but no migration, the home market effect holds for a range of parameters, similar to previous literature. However, unlike previous literature, we find that if populations in countries are highly asymmetric, the home market effect can be reversed.
    Keywords: Monopolistic competition; Poverty trap; Home market effect
    JEL: F12 R11
    Date: 2023–05–22
  9. By: Debora Di Gioacchino; Laura Sabani; Stefano Usai
    Abstract: Using survey data, we contribute to the literature on temporal evolution of educational attainment by parental background by providing the estimates of the intergenerational education mobility in Italian regions across seven birth cohorts. Results of intergenerational correlation between parents and children’s education show that in the last fifty years mobility increased in almost all regions, although for the youngest cohorts this decline seems to have ended. Northeast regions and Central regions are the most mobile, followed by Northwest and South regions. This pattern is robust to alternative measures of relative mobility. As expected, we find that - at least for the youngest cohorts - there is a negative correlation between mobility and economic factors such as unemployment and poverty. This suggests that credit constraints explain bottom tail persistence in education. A positive correlation between the intergenerational education mobility and the degree of inequality as measured by the GINI coefficient exists across Italian regions, consistent with the "Great Gatsby curve" documented across countries. In addition, we find a positive association between mobility, indexes of social capital and the number of graduates in the regions. Measures of school quality (PISA test) are positively correlated with regional educational mobility.
    Keywords: EIntergenerational Mobility; Education and Inequality; Italy; Geography
    JEL: J62 I21 I28
    Date: 2023–02
  10. By: Francesco Andreoli (Department of Economics (University of Verona)); Vincenzo Prete (Department of Economics (University of Verona)); Claudio Zoli (Department of Economics (University of Verona))
    Abstract: We develop dominance criteria to assess the patterns of residential ethnic segregation and urban income deprivation across neighborhoods of a city. The results combine aggregate information on inequality and residential segregation within neighborhoods and disparities across neighborhoods in average incomes. We use this methodology to investigate the dynamic of these phenomena in four American Metropolitan Statistical Areas from 1990 to 2012.
    Keywords: Deprivation, Segregation, Spatial Inequality
    JEL: D31 D63
    Date: 2023–03
  11. By: Brynjolfsson, Erik; Buffington, Catherine; Goldschlag, Nathan; Li, J. Frank; Miranda, Javier; Seamans, Robert
    Abstract: We use data from the Annual Survey of Manufactures to study the characteristics and geography of investments in robots across U.S. manufacturing establishments. We find that robotics adoption and robot intensity (the number of robots per employee) is much more strongly related to establishment size than age. We find that establishments that report having robotics have higher capital expenditures, including higher information technology (IT) capital expenditures. Also, establishments are more likely to have robotics if other establishments in the same Core-Based Statistical Area (CBSA) and industry also report having robotics. The distribution of robots is highly skewed across establishments' locations. Some locations, which we call Robot Hubs, have far more robots than one would expect even after accounting for industry and manufacturing employment. We characterize these Robot Hubs along several industry, demographic, and institutional dimensions. The presence of robot integrators and higher levels of union membership are positively correlated with being a Robot Hub.
    Keywords: labor, manufacturing, robot, technology adoption
    JEL: L64 O34 O36 O4
    Date: 2023
  12. By: Alexis Pokrovsky (LIRSA - Laboratoire interdisciplinaire de recherche en sciences de l'action - CNAM - Conservatoire National des Arts et Métiers [CNAM] - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université); Romain Aeberhardt (Centre de Recherche en Économie et STatistique (CREST)); Sandra Charreire Petit (RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay); Damien Talbot (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)
    Abstract: Planning or organizing health services across territories relies mainly on density models and metric management which do not match the complexity of spatial behaviors of individuals. Thus, unexpected behaviors may be observed, leading to misalignment with the initial plan. Our paper addresses this issue by analyzing the influence of some socioeconomic factors on the venues of inhabitants to hospital facilities within a Groupement Hospitalier de Territoire, by essence an organisation of medical resources within a defined territory. By comparing the patterns in a situation of comparable choice between two hospital facilities located at a nearby distance within the same GHT, we measure some counter intuitive variances, revealing a perception of proximity that diverges from pure distance and is statistically correlated to two main variables: the level of deprivation and a perceived boundary that matches the frontier of the administrative department. We thus evidence some factors supporting cognitive dimension of proximity that ought to be integrated in the future programming of patient's parcourse.
    Abstract: La planification ou l'organisation des services de santé sur les territoires repose principalement sur des modèles de densité et de gestion métrique qui ne correspondent pas à la complexité des comportements spatiaux des individus. Ainsi, des comportements inattendus peuvent être observés, conduisant à un décalage avec le plan initial. Notre article aborde cette question en analysant l'influence de certains facteurs socio-économiques sur les déplacements des habitants vers les établissements hospitaliers d'un Groupement Hospitalier de Territoire, par essence une organisation des ressources médicales sur un territoire défini. En comparant les modèles dans une situation de choix comparable entre deux établissements hospitaliers situés à une distance proche au sein d'un même GHT, nous mesurons des écarts contre intuitifs, révélant une perception de la proximité qui s'écarte de la distance pure et est statistiquement corrélée à deux variables principales : le niveau de privation et une frontière perçue qui correspond à la frontière du département administratif. Nous mettons ainsi en évidence certains facteurs soutenant la dimension cognitive de la proximité qui devraient être intégrés dans la programmation future du parcours du patient.
    Keywords: Space Health Proximity Context Subjectivity, Space, Health, Proximity, Context, Subjectivity
    Date: 2022
  13. By: Medhavi Sandhani (Madras School of Economics, Chennai, India); Anubhab Pattanayak ((Corresponding author), Madras School of Economics, Chennai, India); K.S. Kavi Kumar (Madras School of Economics, Chennai, India)
    Abstract: This study examines climate change impact on economic growth in the Indian context. Using state and district level data on climate variables and growth rate of per capita real GDP, the present study evaluates the short- as well as medium-run effects of climate change on growth. The results based on state-level analysis are suggestive of negative effects of rising temperature on growth during 1980-2019. These aggregate level results are further reinforced by the results from district-level analysis. First, higher temperatures have significant negative impact for poorer districts with a 1?C rise in temperature leading to nearly 4.7 percent fall in growth rate of district per capita income. Second, higher temperatures not only have level effects, but also growth effects, especially for richer districts. Credit access, electrification and urbanization and increased roads and market network may play a significant role in mitigating the negative impact of climate change
    Keywords: Regional Growth; Climate Change; India
    JEL: E23 O13 Q54 R11
  14. By: Simontinti Das (Assistant Professor, Jadavpur University, Kolkata); Amrita Chatterjee ((Corresponding author), Assistant Professor, Madras School of Economics, Chennai, India)
    Abstract: Information and Communication technology (ICT) can boost economic growth and at the same time can create digital divide. The present paper explores both direct impact of ICT dissemination and its indirect impact through the channel of digital finance on poverty eradication and income inequality reduction at the sub-national level in India, considering rural-urban bifurcation. States are classified according to the incidence of poverty and income inequality. Ordered probit estimation confirms that the spread of ICT dissemination directly reduces the persistence of poverty in both urban and rural areas. Moreover, the application of ICT innovation in the financial sector or digital finance also has a positive impact on poverty eradication. However, in case of inequality removal, ICT innovation has no direct impact, though financial inclusion reduces inequality in both rural and urban areas. Interestingly, ICT diffusion in the banking sector dampens the positive role of financial inclusion on urban inequality reduction, whereas it has no impact on rural inequality. An important policy prescription should be strengthening ICT infrastructure along with a wider and uniform spread of digital finance among rural as well as urban populations so that more people can take advantage of ICT diffusion.
    Keywords: ICT innovation, Digital Finance, Poverty incidence, Income inequality, Rural-urban disparity
    JEL: O33 G2 I32 O18 R12
  15. By: U.M. Gragnolati; L. Moretti; R. Ricciuti
    Abstract: Similarly to other countries, the development of an early national railway network took place in Italy during the second half of the 19th century. Railroads were then regarded as carriers of modernity that could reach isolated areas, expand market potential, and favor the structural transition from an agricultural economy toward an industrial one. Did the newly constructed railways actually have medium-run effects on the development and structure of industrial sectors at the local level? We bring new evidence to the existing literature by looking at the case of Sardinia. According to our estimates, municipalities that received a railway station during the 19th century did not have a significantly higher future probability to host at least one industrial firm, as compared to municipalities without a railway station. However, in those municipalities that received a railway station during the 19th century, specific industrial sub-sectors such as foodstuff and metal processing had higher employment by 1911. Moreover, these industrial sub-sectors tended also to display more firms in those municipalities that received a railway station, although this latter effect is statistically weaker. These outcomes are especially strong in locations having direct access to the main railway line with standard gauge rails, while the effects of secondary narrow gauge lines do not find a similar empirical support. Results are robust to a large set of control variables and district fixed effects and to the use of an instrumental variable based on least-cost paths.
    Keywords: Early railways;Industrial development;Developing economy;Insular economy;Least cost paths
    Date: 2023

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