nep-geo New Economics Papers
on Economic Geography
Issue of 2024‒03‒04
ten papers chosen by
Andreas Koch, Institut für Angewandte Wirtschaftsforschung

  1. An Evolutionary Approach to Regional Studies on Global Value Chains By Ron Boschma; ;
  2. How industrial clusters influence the growth of the regional GDP: A spatial-approach By Vahidin Jeleskovic; Steffen Loeber
  3. Market size, trade, and productivity reconsidered: poverty traps and the home market effect By Berliant, Marcus; Tabuchi, Takatoshi
  4. Local and national concentration trends in jobs and sales: the role of structural transformation By Autor, David; Patterson, Christina; Van Reenen, John
  5. Time-varying Agglomeration Economies and Aggregate Wage Growth By Clémence Berson; Pierre-Philippe Combes; Laurent Gobillon; Aurélie Sotura
  6. Looking behind the curtain: a model of left behind places and feelings By Hertrich, Tobias Johannes; Brenner, Thomas
  7. The Anatomy of Concentration: New Evidence From a Unified Framework By Kenneth R. Ahern; Lei Kong; Xinyan Yan
  8. The Impact of China’s “Stadium Diplomacy” on Local Economic Development in Sub-Saharan Africa By Lindlacher Valentin; Gustav Pirich
  9. The Wandering Scholars: Understanding the Heterogeneity of University Commercialization By Josh Lerner; Henry J. Manley; Carolyn Stein; Heidi L. Williams
  10. Impacts of road transport infrastructure investments on the Latin American Integration Route By Centuriao, Daniel; Boldrine Abrita, Mateus; Rondina Neto, Angelo; Camilo, Ana Paula; Stradiotto Vignandi, Rafaella; Espíndola Junior, Guilherme; Weber, Vanessa; Marques, Nelagley; Franco Maciel, Ruberval

  1. By: Ron Boschma; ;
    Abstract: There is an ongoing dialogue that explores how the Global Production Network and Evolutionary Economic Geography (EEG) literatures can make promising crossovers. This paper aims to contribute to this debate by outlining a theoretical-analytical approach to regional studies on Global Value Chains (GVCs). Building on the EEG literature on relatedness, economic complexity and regional diversification, this approach aims to develop a better understanding of the ability of regions to develop new and upgrade existing GVCs, and why regions may experience the loss or downgrading of existing GVCs. We present the features of this relatedness/complexity approach to GVCs, and discuss potential fields of applications.
    Keywords: Evolutionary Economic Geography, Global Value Chains, Global Production Networks, regional diversification, relatedness, economic complexity
    JEL: B52 F23 O19 O33 R10
    Date: 2024–01
  2. By: Vahidin Jeleskovic; Steffen Loeber
    Abstract: In this paper, we employ spatial econometric methods to analyze panel data from German NUTS 3 regions. Our goal is to gain a deeper understanding of the significance and interdependence of industry clusters in shaping the dynamics of GDP. To achieve a more nuanced spatial differentiation, we introduce indicator matrices for each industry sector which allows for extending the spatial Durbin model to a new version of it. This approach is essential due to both the economic importance of these sectors and the potential issue of omitted variables. Failing to account for industry sectors can lead to omitted variable bias and estimation problems. To assess the effects of the major industry sectors, we incorporate eight distinct branches of industry into our analysis. According to prevailing economic theory, these clusters should have a positive impact on the regions they are associated with. Our findings indeed reveal highly significant impacts, which can be either positive or negative, of specific sectors on local GDP growth. Spatially, we observe that direct and indirect effects can exhibit opposite signs, indicative of heightened competitiveness within and between industry sectors. Therefore, we recommend that industry sectors should be taken into consideration when conducting spatial analysis of GDP. Doing so allows for a more comprehensive understanding of the economic dynamics at play.
    Date: 2023–12
  3. 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; Labor market clearing
    JEL: F12 R11
    Date: 2024–01–29
  4. By: Autor, David; Patterson, Christina; Van Reenen, John
    Abstract: National U.S. industrial concentration rose between 1992-2017. Simultaneously, the Herfindhahl Index of local (six-digit-NAICS by county) employment concentration fell. This divergence between national and local employment concentration is due to structural transformation. Both sales and employment concentration rose within industry-by-county cells. But activity shifted from concentrated Manufacturing towards relatively un-concentrated Services. A stronger between-sector shift in employment relative to sales explains the fall in local employment concentration. Had sectoral employment shares remained at their 1992 levels, average local employment concentration would have risen by 9% by 2017 rather than falling by 7%.
    Keywords: employment concentration; sales concentration; local labor markets; structural transformation; POID
    JEL: L11 L60 O31 O34 P33 R3
    Date: 2023–04–19
  5. By: Clémence Berson; Pierre-Philippe Combes; Laurent Gobillon; Aurélie Sotura
    Abstract: We quantify the effects of city agglomeration economies on labour earnings in France over a forty-year period using individual wage panel data. We first delineate cities at every date to consider changes in their footprint over time. We then estimate a daily wage specification that includes time-varying city effects while controlling for observed and unobserved individual heterogeneity. We regress these city effects on agglomeration variables every year, and assess how changes in values and returns to agglomeration variables affect the evolution of daily wages. We find a negligible role for changes in values, but an important role for changes in returns. There is also significant heterogeneity across cities, even among large cities of similar sizes. We propose a theoretical model in which agglomeration economies affect both population and city area. A calibration exercise shows that changes in returns to agglomeration economies are not enough to generate variations in population and city area influencing significantly aggregate labour earnings. This result is consistent with the negligible role of changes in values found in our empirical investigation.
    Keywords: Agglomeration Economies, Growth, Wages
    JEL: R23 J31 J6
    Date: 2024
  6. By: Hertrich, Tobias Johannes; Brenner, Thomas
    Abstract: The concept of “left behind” places is complex and multidimensional. It encompasses economic factors, demographic aspects, infrastructure and connectivity criteria, social factors, political and cultural aspects. Previous studies on the concept have only described the feeling of left behind very superficially. We therefore focus on the feeling of left behind. We show how individual feelings can become a regional phenomenon of left behind. The feeling of left behind is primarily fed by two components that are felt by many people in left behind places: autonomy deficit and low appreciation. Causes and suitable political measures for left behind places are derived from our conception.
    Abstract: Das Konzept der left behind places ist komplex und multidimensional. Es umfasst wirtschaftliche Faktoren, demografische Aspekte, Infrastruktur- und Konnektivitätskriterien, soziale Faktoren, politische und kulturelle Aspekte. Frühere Studien zu diesem Konzept haben das Gefühl des Zurückgelassenwerdens nur sehr oberflächlich beschrieben. Wir konzentrieren uns daher auf das Gefühl des Zurückgelassenwerdens. Wir zeigen, wie individuelle Gefühle zu einem regionalen Phänomen des Zurückgelassenwerdens werden. Das Gefühl des Zurückgelassenwerdens speist sich vor allem aus zwei Komponenten gespeist, die von vielen Menschen an zurückgelassenen Orten empfunden werden: Autonomiedefizit und geringe Wertschätzung. Ursachen und geeignete politische Maßnahmen für zurückgebliebene Orte werden aus unserer Konzeption abgeleitet.
    Keywords: case study, feeling left behind, left behind place, lagging region, regional development, policy measures
    JEL: O18 O20 R11 R12
    Date: 2024
  7. By: Kenneth R. Ahern; Lei Kong; Xinyan Yan
    Abstract: Concentration is a single summary statistic driven by two opposing forces: the number of firms in a market and the evenness of their market shares. This paper introduces a generalized measure of concentration that allows researchers to vary the relative importance of each force. Using the generalized measure, we show that the widely-cited evidence of increasing industrial employment concentration is driven by the Herfindahl Index's over-weighting of evenness and under-weighting of firm counts. We propose an alternative, equally-weighted measure that has an equivalent economic meaning as the Herfindahl Index, but possesses superior statistical attributes in typical firm size distributions. Using this balanced measure, we find that employment concentration decreased from 1990 to 2020. Finally, decomposing aggregate diversity into meaningful geographic and industry subdivisions reveals that concentration within regional markets has fallen, while concentration between markets has risen.
    JEL: C46 D40 L11
    Date: 2024–01
  8. By: Lindlacher Valentin; Gustav Pirich
    Abstract: This study investigates the economic impact of China’s “stadium diplomacy” in Sub-Saharan Africa. Exploiting the staggered timing of the construction in a difference-in-differences framework, we analyze the effect of Chinese-built and financed stadiums on local economic development. Employing nighttime light satellite data, we provide both an aggregate and spatially disaggregated assessment of these investments. We find that a stadium’s city nighttime light intensity increases by 25 percent, on average, after stadium completion. The stadium’s direct surrounding increases by 34 percent, on average, in its nighttime light activity. The effects can be attributed to the stadiums but are not only visible close to the stadium’s location. The effect remains strong when controlling for other local Chinese investments. Thus, we find evidence for beneficial effects of Chinese-built and financed stadiums on local economic development in Sub-Saharan Africa, contrasting with the widely held notion that China’s development finance projects constitute “white elephants”.
    Keywords: stadium diplomacy, regional development, nighttime light, local public infrastructure, Sub-Saharan Africa
    JEL: O18 R11 O55 R53 Z20
    Date: 2024
  9. By: Josh Lerner; Henry J. Manley; Carolyn Stein; Heidi L. Williams
    Abstract: University-based scientific research has long been argued to be a central source of commercial innovation and economic growth. Yet at the same time, there have been long-held concerns that many university-based discoveries never realize their potential social benefits. Looking across universities, research and commercialization activities such as start-up formation vary tremendously – variation that could reflect the composition and orientation of faculty research, university-level factors such as patenting and licensing efforts, or broader place-based factors such as location in a technology cluster. We take a first step towards unpacking this heterogeneity in university commercialization by analyzing how the propensity of academic research to spill over to commercial innovation changes when academics move across universities. Our estimates suggest that at least 15–25% of geographic variation in commercial spillovers from university-based research is attributable to place-specific factors.
    JEL: O34 R11
    Date: 2024–01
  10. By: Centuriao, Daniel; Boldrine Abrita, Mateus; Rondina Neto, Angelo; Camilo, Ana Paula; Stradiotto Vignandi, Rafaella; Espíndola Junior, Guilherme; Weber, Vanessa; Marques, Nelagley; Franco Maciel, Ruberval
    Abstract: Using structural impact analysis, this research investigates the economic implications of road transport infrastructure investments on the Latin American Integration Route (LAIR) in the state of Mato Grosso do Sul (MS), Brazil. We aim to determine whether these investments can drive short-term local economic growth, identify sectors that benefit the most from the investments, and analyze the distribution of effects among MS municipalities. Based on three comparative scenario simulations, the findings indicate that infrastructure investments are likely to yield positive short-term impacts on MS's GDP. The intensity of these impacts varies across industries and municipalities, with Campo Grande (state capital) being a key beneficiary. Compared to other types of investments, those in transport infrastructure have a lower dispersion capacity in space. The main contribution lies in utilizing the S-curve to model the financial progress of each investment project, as this information is frequently unavailable. Additionally, adopting the spatial Location Quotient (LQ) estimates the spatial distribution of investments impacts. Lastly, the guided simulation of investments is a methodology to enhance the efficacy of formulating and executing public investment policies, considering the spatial consequences of these investments.
    Keywords: Input-output, Structural Analysis, Public Investment, Transportation, Regional Fiscal Policy.
    JEL: R12 R15
    Date: 2024–01–01

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