nep-geo New Economics Papers
on Economic Geography
Issue of 2023‒08‒14
twelve papers chosen by
Andreas Koch
Institut für Angewandte Wirtschaftsforschung

  1. Technology Diffusion across Regions By Sebbesen, Anja
  2. Universities that matter for regional knowledge base renewal - the role of multilevel embeddedness By Nils Grashof; Holger Graf
  3. Aging and regional productivity growth in Germany By Bode, Eckhardt; Dohse, Dirk; Stolzenburg, Ulrich
  4. How institutions shape the economic returns of public investment in European regions By Inmaculada C. Alvarez; Inmaculada C. Alvarez; Luis Orea; Andrés Rodríguez-Pose
  5. Climate Change and the Geography of the U.S. Economy By Sylvain Leduc; Daniel J. Wilson
  6. Where do gazelles and high-growth firms occur in Germany? By Tomenendal, Matthias; Raffer, Christian
  7. Geographic and Socioeconomic Variation in Healthcare: Evidence from Migration By Péter Elek; Anita Győrfi; Nóra Kungl; Dániel Prinz
  8. Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior By Branco, Catarina; Dohse, Dirk C.; Pereira dos Santos, João; Tavares, José
  9. Energy and the Environment in Economic History By Karen Clay
  10. Remote Work, Foreign Residents, and the Future of Global Cities By Joao Guerreiro; Sergio Rebelo; Pedro Teles
  11. The impact of COVID-19 on the tourism sector in Italy: a regional spatial perspective By A.C. Pinate; A. Faggian; M.G. Brandano
  12. Can Leviathan City Governments Use Tax Policy to Attract the Creative Class? By Batabyal, Amitrajeet; Beladi, Hamid

  1. By: Sebbesen, Anja
    Abstract: Until recently, the geographical coverage of empirical studies on regional technology diffusion was usually rather limited or biased towards the industrialized world. This paper extends the sample of analysis and investigates regional TFP growth and the factors determining productivity spillovers for an extensive amount of regions. Nonlinearities in the effects of the explanatory variables as well as spatial spillovers are considered in the estimation model. The findings confirm a robust direct impact of technological catch-up on regional TFP growth. Catch-up speeds increase with higher levels of human capital and in countries with larger inflows of FDI. Furthermore, positive spatial spillovers of technology levels are observed.
    Keywords: Regional TFP growth; transmission channels; spatial spillovers; human capital; spatial switching regression
    Date: 2023–07
  2. By: Nils Grashof (Friedrich Schiller University Jena, School of Economics and Business Administration); Holger Graf (Friedrich Schiller University Jena, School of Economics and Business Administration)
    Abstract: We analyze the role of universities or, more generally higher education institutions (HEIs), in terms of their regional and international embeddedness for regional knowledge base renewal. We assume that the introduction of radical patents in the sense of novel technological combinations contributes to the renewal of the knowledge base. For our empirical study, we combine information from patent applications, scientific publications and higher education statistics. We find that HEIs contribute most to knowledge base renewal if they have a strong research output and are locally embedded. International research embeddedness of HEIs benefits regional development only if combined with a central position in the regional network.
    Keywords: higher education institutions, universities, knowledge base renewal, radical innovation, SNA, embeddedness
    JEL: I20 I23 I25 O3 R11
    Date: 2023–07–20
  3. By: Bode, Eckhardt; Dohse, Dirk; Stolzenburg, Ulrich
    Abstract: We investigate the effects of aging on regional productivity growth, the mechanisms and the strength of which are not well-understood. We focus on two different manifestations of population aging—workforce aging and an increasing share of retirees—and investigate channels through which aging may impact on regional productivity growth for a panel of German counties 2000–2019. We find that workforce aging is more negatively associated with productivity growth in urban than in nonurban regions. A likely reason is that aging is detrimental to innovative and knowledge-intensive activities, which are heavily concentrated in cities. We also find a negative association between the share of the retired population and productivity growth in regions with a small household services sector. A likely reason is that older people’s disproportionate demand for local household services (including health care, recreation) requires a re-allocation of resources from more productive manufacturing or business services to less productive household services. Regions specialized more in highly productive industries have more to lose in this process.
    Keywords: Workforce aging, Population aging, Productivity growth, Regional analysis, Germany
    JEL: E24 J11 J24 J26 R11
    Date: 2023
  4. By: Inmaculada C. Alvarez; Inmaculada C. Alvarez; Luis Orea; Andrés Rodríguez-Pose
    Abstract: In this paper, we examine the impact of institutional quality on the returns of key drivers of economic growth in 230 European Union (EU) NUTS-2 regions from 2009 to 2017. To estimate region-specific elasticities, we employ a latent class modelling approach, considering the quality of government and the degree of authority in each region as mediators. Our findings reveal significant variation in the returns to education, physical capital investment, and innovation across regions. Moreover, we observe that changes in government quality and regional authority influence the ability of EU regions to leverage different types of investment effectively. These results emphasize the importance of considering the government quality in regions where investments are made in order to maximize the returns on European Cohesion investment
    Date: 2023
  5. By: Sylvain Leduc; Daniel J. Wilson
    Abstract: This paper examines how the spatial distribution of people and jobs in the United States has been and will be impacted by climate change. Using novel county-level weather data from 1951 to 2020, we estimate the longer-run effects of weather on local population, employment, wages, and house prices using a panel distributed lag model. The historical results point to long-lasting negative effects of extreme temperatures on each of these outcomes. We highlight that a long lag structure is necessary to appropriately capture the longer-run effects of climate change, as short-run effects are often small and imprecisely estimated. Using county-level weather projections based on alternative greenhouse gas emissions scenarios, we use the estimated models to project the spatial distribution of these local economic outcomes out to 2050. The results point to substantial reallocations of people and jobs across the country over the next three decades, with mobility increasing by between 33 and 100 percent depending on the scenario. Population and employment are projected to shift away from the Sunbelt and toward the North and Mountain West. We document that this would, in fact, be a continuation of a historical pattern: Over the past four decades the relationship between population growth and hot climates across the United States has turned from strongly positive to slightly negative. We present a spatial equilibrium model to interpret the results, highlighting the impacts of climate change on amenities and productivity, and find significant roles for both channels in accounting for our empirical findings.
    Keywords: climate change; economy; panel data
    Date: 2023–07–13
  6. By: Tomenendal, Matthias; Raffer, Christian
    Abstract: There is still a rather small number of studies on gazelles in Germany, home to Europe's largest economy and its capital Berlin, one of Europe's main startup hubs. In particular, a recent overview on the occurrence of gazelles in Germany, which differentiates gazelles (up to five years old) from other high-growth firms (no age restriction) is missing. Applying descriptive statistics to a data set of 5, 328 high-growth firms we provide such an overview in terms of regional and sectoral distribution of German gazelles as well as their spatial link to regional business clusters. We find that most German high-growth firms (and equally gazelles) exist in the most populated German states. They mostly exist in traditional business sectors like construction and manufacturing. Relatively more gazelles than older high-growth firms exist in the sector of further business-related services. In the sectors construction, information and communication, further business-related services, and art, entertainment and recreation, we identify weak but significant positive spatial associations between the number of cluster initiatives and the number of gazelles. No such association exists for the entirety of high-growth firms in Germany.
    Keywords: gazelles, German gazelles, high-growth firms, distribution of gazelles, occurrence of gazelles, clusters, cluster embeddedness
    Date: 2023
  7. By: Péter Elek (Centre for Economic and Regional Studies, Corvinus University of Budapest); Anita Győrfi (Vienna Graduate School of Economics); Nóra Kungl (Vienna Graduate School of Economics); Dániel Prinz (World Bank)
    Abstract: We study variation in healthcare utilization across geographies and socioeconomic groups in Hungary. Exploiting migration across geographic regions and relying on high-quality administrative data on healthcare use and income we show that the role of place-specific supply factors is heterogeneous across types of care and across socioeconomic groups. Overall, place-specific factors account for 68% of the variation in outpatient spending and 35% of the variation in drug spending, but almost none of the variation in inpatient spending. Place effects explain four-fifth of outpatient spending variation for non-employed working-age individuals, but less than two-fifth for individuals with above-median wage incomes. There is a positive association between place effects and outpatient capacity, especially for low-income individuals. These results suggest that access to healthcare varies especially for low-income people even in a context with universal coverage.
    Keywords: healthcare utilization, healthcare supply, regional variation, socioeconomic status
    JEL: I11 I14 C23
    Date: 2023–06
  8. By: Branco, Catarina; Dohse, Dirk C.; Pereira dos Santos, João; Tavares, José
    Abstract: We study the firm-level responses to a substantial increase in transportation costs in the wake of a quasi-experiment that introduced tolls in a subset of Portuguese highways. Exploiting a unique dataset encompassing the universe of Portuguese private firms, we find that the introduction of tolls caused a substantial decrease in turnover (−10.2%) and productivity (−4.3%) in treated firms vis-à-vis firms in the comparison group. In response to the tolls, firms substantially cut employment-related expenses and purchases of other inputs. Labor costs were reduced by both employment cuts and a decrease in average wages. While firms did not increase inventory, there is some evidence for increased firm exit, in particular by firms in tradables sectors.
    Keywords: Road tolls, Infrastructure, Firm performance, Firm behavior, Location, Portugal
    JEL: R48 L25 R12
    Date: 2023
  9. By: Karen Clay
    Abstract: Both energy and the environment are inputs into production, influencing the economy and the overall welfare of the population. While the economy itself has been a central focus of economic history from its inception, energy and the environment have received more limited attention. On the energy side, the relative lack of attention reflects economic historians' focus on labor, capital, and technology. Two areas that have received attention are the effects of energy on the spatial location of economic activity and the importance of coal for the Industrial Revolution. On the environmental side, the relative lack of attention likely reflects the focus on the positive aspects of industrialization and the difficulty of finding data related to air, water, and land pollution. One environmental area that has received attention is water pollution from human waste, which had large mortality impacts, particularly in cities. This essay reviews long run trends in energy use and water and air pollution and then turns to the energy and environmental literatures in economic history. The conclusion offers some thoughts regarding opportunities for further research in energy and the environment.
    JEL: N50 N70 Q32 Q53
    Date: 2023–06
  10. By: Joao Guerreiro; Sergio Rebelo; Pedro Teles
    Abstract: As remote work opportunities expand, more people are seeking residence in foreign destinations. The resulting surge in foreign residents generates capital gains for property owners but negatively impacts renters and creates potentially important production, congestion, and amenities externalities. We study the optimal policy toward foreign residents in a model with key features emphasized in policy discussions. Using this model, we provide sufficient statistics to evaluate the impact of an influx of foreign residents and to calculate the tax/transfer policies required to implement the optimal policy. This policy involves implementing transfers to internalize agglomeration, congestion, and other potential externalities. Importantly, we find that it is not optimal to restrict, tax, or subsidize home purchases by foreign residents.
    JEL: H00 J61 R3 R58
    Date: 2023–06
  11. By: A.C. Pinate; A. Faggian; M.G. Brandano
    Abstract: The recent COVID-19 pandemic crisis affected all economic sectors, but in particular tourism. In fact, it is now almost unquestionable that the tourism sector was hit the hardest. However, the resilience of domestic and international tourism, and its capacity to rebound from crises, has also been recognized. In this context, the aim of this paper is twofold. First, to analyze the impact of COVID-19 on tourism flows in Italy, by looking at NUTS-3 level data on national and international tourism arrivals. Second, to understand whether, and to what extent, some "alternative" destinations benefited during the pandemic. Spatial and geostatistical analyses are used to capture the determinants of the variation in tourism flows in 2020 and 2021 compared with the pre-pandemic year (2019). Results show different scenarios in the two periods analyzed, demonstrating that tourist behaviors started to change, and they are still evolving.
    Keywords: tourism flows;spatial analysis;short-term resilience;italy;COVID-19 pandemic
    Date: 2023
  12. By: Batabyal, Amitrajeet; Beladi, Hamid
    Abstract: We focus on an aggregate economy of two nearby cities A and B and study whether it is possible for the leviathan governments in these two cities to use taxes τ^A and τ^B to attract members of the so-called creative class. The creative class population is fixed and members locate either in city A or B depending on the utility from such location. In this setting, we accomplish five tasks. First, given the two taxes, we determine the value of a metric ζ that describes how the creative class population partitions into cities A and B. Second, for a given partition of the creative class population, we state the budget constraints confronting the governments in cities A and B. Third, we state and solve the decision problems of the two governments when they act as independent leviathans and maximize tax revenue. Fourth, we ascertain the efficient taxes that maximize the sum of tax revenues in the aggregate economy. Finally, we discuss the implications of our analysis for tax policy.
    Keywords: Creative Class, Leviathan City Government, Tax Policy, Tax Revenue
    JEL: H20 R11 R50
    Date: 2023–01–09

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