nep-geo New Economics Papers
on Economic Geography
Issue of 2024‒01‒22
six papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. Effects of remote work on population distribution across cities: US evidence from a QSE model By Ghinami, Francesca
  2. Hostility, Population Sorting, and Backwardness: Quasi-Experimental Evidence from the Red Army after WWII By Christian Ochsner
  3. Assessing the Impact of Infrastructure Investments Using Customs Data: The Case of the Greater Mekong Subregion Corridor and the People’s Republic of China By Elhan-Kayalar, Yesim; Kucheryavyy, Konstantin; Nose, Manabu; Sawada, Yasuyuki; Shangguan, Ruo
  4. Profitability of small- and medium-sized enterprises in Marshall’s time: sector and spatial heterogeneity in the nineteenth century By Bennett, Robert J; Smith, Harry; Montebruno, Piero; Van Lieshout, Carry
  5. Money talks, but can it run? Assessing the territorial dynamics of EU funds absorption capacity By MARQUES SANTOS Anabela; CONTE Andrea; MOLICA Francesco
  6. Inward foreign direct investment, superstar firms and wage inequality between firms: Evidence from European regions By Siedschlag, Iulia; Duran Vanegas, Juan

  1. By: Ghinami, Francesca
    Abstract: This study investigates the impact of remote work adoption on the size and competitiveness of cities in the United States. As a contribution to the ongoing debate sparked by the Covid-19 pandemic, the research initially establishes city-specific upper-bound measures of potential remote work adoption, utilizing the share of employment in remotely-performable occupations for each city. Subsequently, it employs a Quantitative Spatial Economic model, incorporating shipping and commuting costs, to assess the counterfactual effects that these potential levels of remote work adoption would have on population distribution across US cities. Model predictions indicate that upon full remote-work adoption, only select highly productive cities would grow in size and productivity, tothe detriment of the majority of locations. Nevertheless, the emerging spatial equilibrium yields generalized welfare gains characterized by reduced markups in larger cities, extending even to shrinking cities through the pro-competitive effect of trade. The findings suggest a policy-relevant dual role of remote work, concurrently enhancing welfare while reinforcing agglomeration and inequality across cities.
    Date: 2023–12–08
  2. By: Christian Ochsner
    Abstract: Does a short episode of conflict or exposure to hostile troops cause regional economic backwardness, and if so, why and how does it persist? I answer these questions by exploiting economic differences across the idiosyncratic and short-lived line of contact between the Red Army and the Western Allies in South Austria at the end of WWII. Spatial regression discontinuity estimates show that hostile presence of the Red Army for 74 days caused an immediate relative population decline of around 12%, amplified to 25% by today. Age-specific migration patterns and subsequent fertility differences explain the multiplying effects. Sector development and measures of local labor productivity in 2011 also lag behind in regions briefly seized by the Red Army, likely driven by skill-specific migration and hampered investment patterns after WWII. The findings provide novel insights into the long-run effects of wars and conflicts, and point to the isolated role of the Red Army’s hostile actions after WWII to understand the European economic East-West divide.
    Keywords: Conflict, Hostility, Population shock, Regional development, Red Army
    JEL: D74 J13 N44 O14
    Date: 2023–11
  3. By: Elhan-Kayalar, Yesim (Asian Development Bank); Kucheryavyy, Konstantin (University of Tokyo); Nose, Manabu (International Monetary Fund); Sawada, Yasuyuki (University of Tokyo); Shangguan, Ruo (Jinan University)
    Abstract: This paper provides new evidence of the effects of road construction on both domestic and international trade flows in the People’s Republic of China (PRC) using customs data and information on transport investments in the region, including those supported by multilateral development banks. We find that road construction helped to reduce trade costs significantly from 2000 to 2011, supporting the catch-up of inland regions in the PRC to its coastal cities. The ad valorem rate of internal trade costs decreases by 20%, and the ad valorem rate of international trade costs decreases, on average, by 15.3%, with substantial heterogeneity of effects across sectors. Using satellite and customs data, we also document that the construction of the Kunming–Bangkok Expressway led to local economic growth and higher regional specialization in accordance with comparative advantage, suggesting the role of the road construction in facilitating market integration across borders in the Greater Mekong Subregion.
    Keywords: development impact; infrastructure; economic growth; trade; job creation; regional specialization; market integration
    JEL: F10 F13 R40 R41
    Date: 2023–12–20
  4. By: Bennett, Robert J; Smith, Harry; Montebruno, Piero; Van Lieshout, Carry
    Abstract: New data on profit heterogeneity of small- and medium-sized firms for 1861–81 in England and Wales are used to reinterpret Marshall's contemporary insights. Profit level differences are chiefly explained by location, mainly urbanisation effects. But profitability (profit per worker) is mainly explained by sectors, at both 1-digit and 5-digit level. Sector market opportunities reflected barriers to market entry which limited substitutability for the services of the professions, some manufacturing and maker-dealing industries. Localisation mainly reflected urban/rural differences, accessibility to railways and to a lesser extent waterways. Differences in firm-level organisation (measured by portfolio diversification and partnerships) were less significant for explaining profit heterogeneity than sector or localisation. Demographic effects such as an entrepreneur's age had little significance. Marshall's insight of convergence to mean industry-sector profitability, with localisation as a secondary influence, is confirmed, but there remain unexplained elements of heterogeneity indicating important roles of entrepreneurial agency.
    JEL: L11 L22 L25 L29
    Date: 2022–01–19
  5. By: MARQUES SANTOS Anabela (European Commission - JRC); CONTE Andrea (European Commission - JRC); MOLICA Francesco (European Commission - JRC)
    Abstract: Using data from the execution of 2014-2020 cohesion policy, the paper offers a comprehensive analysis of the speed of absorption capacity of European funds by introducing novel metrics. It evaluates absorption capacity considering time performance and distinguishing between national and regional governance models. The study employs a Tobit model to explain the overall speed of absorption and a multinomial regression model to describe the drivers of the thematic area with the highest absorption capacity. Programmes and territorial characteristics are both relevant factors explaining the level of absorption of funds. However, when explaining the thematic area with the highest absorption capacity, programme characteristics are more relevant than territorial ones.
    Keywords: Cohesion policy; Absorption capacity; European Union
    Date: 2023–12
  6. By: Siedschlag, Iulia; Duran Vanegas, Juan
    Date: 2023

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