nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒07‒24
seven papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Regional diversification and labour market upgrading: Local access to skill-related high-income jobs helps workers escaping low-wage employment By Zoltán Elekes; Rikard Eriksson; Anna Baranowska-Rataj
  2. The Future of EU Cohesion: Effects of the Twin Transition on Disparities across European Regions By Maucorps, Ambre; Römisch, Roman; Schwab, Thomas; Vujanovic, Nina
  3. Do regional innovation strategies meet societal challenges? A comparative analysis across regions in Belgium, Germany, Netherlands and Finland By Suarsana, Laura; Schneider, Tina; Warsewa, Günter
  4. Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework By Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
  5. Accounting for the Duality of the Italian Economy By Jesús Fernández-Villaverde; Dario Laudati; Lee Ohanian; Vincenzo Quadrini
  6. Unpacking and Measuring Urban Complexity Evidence from amenities in Paris By Calum Robertson; Raphael Suire; Sylvain Dejean
  7. The Births of New Private-owned Enterprises in an Environment of State-owned Enterprises By Zhao, Zhong; Zheng, Liang

  1. By: Zoltán Elekes (Centre for Economic and Regional Studies, Umeå University); Rikard Eriksson (Umeå University); Anna Baranowska-Rataj (Umeå University)
    Abstract: This paper investigates how the evolution of local labour market structure enables or constrains workers as regards escaping low-wage jobs. Drawing on the network-based approach of evolutionary economic geography, we employ a detailed individual-level panel dataset to construct skill-relatedness networks for 72 functional labour market regions in Sweden. Subsequent fixed-effect panel regressions indicate that increasing density of skill-related high-income jobs within a region is conducive to low-wage workers moving to better-paid jobs, hence facilitating labour market upgrading through diversification. While metropolitan regions offer a premium for this relationship, it also holds for smaller regions, and across various worker characteristics.
    Keywords: skill-relatedness network; local labour market; low-wage workers; diversification and structural change; relatedness density
    JEL: J21 J31 R11 R23
    Date: 2023–06
  2. By: Maucorps, Ambre; Römisch, Roman; Schwab, Thomas; Vujanovic, Nina
    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: Europe; European Union; Cohesion; Regional Development
    JEL: H54 O18 R11
    Date: 2022–10–12
  3. By: Suarsana, Laura; Schneider, Tina; Warsewa, Günter
    Abstract: In addition to traditional, cluster-oriented approaches, both cross-sectional technologies ("key enabling technologies") and societal challenges ("grand challenges") are becoming increasingly important for regional innovation strategies. A more complex, multi-dimensional approach of regional innovation strategies requires but a number of adaptations, which need to adjust to various, different regional preconditions. The article raises the research question how societal demands are considered and implemented by regional innovation strategies in four case study regions: Pirkanmaa/Tampere region in Finland, Groningen region in the Netherlands, West Flanders in Belgium, and the Federal State of Bremen in Germany. The four regional case studies are comparable European regions in terms of their innovation capacity and their level of innovation (all are classified "highly innovative" or "strong innovator" by the European Union). In order to address global societal goals and challenges - in particular climate change and its consequences as well as demographic change - a multidimensional innovation policy spanning sectors and technologies and a close interlinking of technological and societal innovation objectives and strategies, seems inevitable. The analyses revealed that governance structures and the innovation infrastructures in the regions indeed start to adapt to societal needs and to the increasing complexity of regional innovation strategies, though the speed as well as the intensity of transition and adjustment varies greatly across the regions. Interregional learning as is intended by the European Interreg programme could offer meaningful support for the progress of regional measures towards multi-dimensional innovation policies.
    Date: 2023
  4. By: Eduardo Hernandez-Rodriguez; Ron Boschma; Andrea Morrison; Xianjia Ye
    Abstract: This paper adopts a relatedness-complexity framework to assess the likelihood of functional upgrading and downgrading in global value chains in EU regions in the period 2000-2010. We use relatedness and economic complexity measures based on value added content of gross exports and labour structures at the regional level. We show how economic complexity metrics can be used as an alternative for value added data, to measure both functional upgrading and downgrading in GVCs. We find that relatedness between functions (industry-occupations) is a factor impacting both functional upgrading and downgrading. Regions tend to functionally upgrade their global value chains towards more complex functions that are related to functions in which they are specialised. And regions are more likely to functionally exit and downgrade in global value chains when they are not specialised in related functions.
    Keywords: Global value chains, upgrading, downgrading, economic complexity, relatedness, EU regions
    JEL: F14 F63 O19 R11 R12
    Date: 2023–07
  5. By: Jesús Fernández-Villaverde; Dario Laudati; Lee Ohanian; Vincenzo Quadrini
    Abstract: After 162 years of political unification, Italy still displays large regional economic differences. In 2019, the per capita GDP of Lombardia was 39, 700 euros, but Calabria’s per capita GDP was only 17, 300 euros. We build a two-region, two-sector model of the Italian economy to measure the wedges that could account for the differences in aggregate variables between the North and the South. We find that the largest driver of the regional disparity in per capita output is the difference in total factor productivity, followed by fiscal redistribution. These two factors, together, account for more than 70 percent of the output disparity between the North and the South.
    Keywords: Italian economy, macroeconomic wedges, regional fiscal redistribution, regional convergence
    JEL: E10 E60
    Date: 2023
  6. By: Calum Robertson; Raphael Suire; Sylvain Dejean
    Abstract: In this paper, we argue that a complexity-driven systemic perspective of urban life can be characterized through the consumption practices of people that interact within urban spaces, and that such a characterization can uncover relevant information for planners. We propose a granular analysis of commercial amenity networks within cities and adapt a measure of economic complexity to aptly reduce these networks. This yields the Amenity Complexity Index (ACI), which is the focus of this work. The ACI is interpretable in terms of consumption practices and of place characteristics, both from a macro city perspective and from a place-based granular perspective. The dynamic illustration of our complexity measure in Paris helps demonstrate ways in which the ACI can enrich our understanding of cities and of the transformative systemic challenges they face. Ultimately, this work proposes a measure and an accompanying interpretation of urban complexity based on commercial amenities that paves the way for novel analyses of the causes and effects of urban transformations, of urban policies, and of the wellbeing of dwellers.
    Keywords: complexity, amenities, cities, consumer, transformations
    JEL: R11 C81
    Date: 2023–07
  7. By: Zhao, Zhong; Zheng, Liang
    Abstract: The impact of the incumbent state-owned enterprises (SOEs) on the births of new private-owned enterprises (POEs) in China is a central concern for the government and society. In this paper, we apply agglomeration theories to distinguish the linkages between SOEs and POEs. Using China's 2008 economic census, the 2007 Input-Output Table, and the 2005 population mini census, we measure the formation of new POEs at the city-industry level, and the agglomeration forces of distance proximity to inputs, outputs, labor, and technology. More explicitly, we measure the extent to which local SOEs provide relevant inputs, consume outputs, employ similar workers, and use similar technology. Our findings indicate that overall, incumbent SOEs hinder the formation of new POEs. For manufacturing, the entry of new POEs is significantly lower in places where more upstream SOEs are concentrated. For services, the entry of new POEs is significantly lower in places where more upstream and downstream SOEs are concentrated. However, the agglomeration effects from the incumbent POEs are either insignificant or significantly positive.
    Keywords: New Firm Formation, State-owned Enterprise, Firm Ownership, Agglomeration
    JEL: L26 L60 L80 R10 R12
    Date: 2023

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