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on Economic Geography |
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Issue of 2024‒08‒12
five papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Richard Hornbeck; Guy Michaels; Ferdinand Rauch |
| Abstract: | We examine “agglomeration shadows” that emerge around large cities, which discourage some economic activities in nearby areas. Identifying agglomeration shadows is complicated, however, by endogenous city formation and “wave interference” that we show in simulations. We use the locations of ancient ports near the Mediterranean, which seeded modern cities, to estimate agglomeration shadows cast on nearby areas. We find that empirically, as in the simulations, detectable agglomeration shadows emerge for large cities around ancient ports. These patterns extend to modern city locations more generally, and illustrate how encouraging growth in particular places can discourage growth of nearby areas. |
| JEL: | N9 R12 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32634 |
| By: | Saussay, Aurelien; Sato, Misato |
| Abstract: | This study examines the influence of relative energy prices on the geographical distribution of industrial investments across 41 countries. Employing a gravity model framework to analyse firms’ investment location decisions, we estimate the model using global bilateral investment flows derived from firm-level M&A data. Our findings reveal that a 10% increase in the energy price differential between two countries results in a 3.2% rise in cross-border acquisitions. This effect is most pronounced in energy-intensive industries and transactions targeting emerging economies. Furthermore, policy simulations suggest that the impact of unilateral carbon pricing on cross-border investments is modest. |
| Keywords: | FDI; mergers and aquistions; energy prices; firm location; competitiveness impacts; carbon leakage; Elsevier deal |
| JEL: | F21 H23 Q52 |
| Date: | 2024–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123034 |
| By: | Andrea Ramazzotti (Università di Napoli Federico II and CSEF) |
| Abstract: | Should minimum wages adjust to local productivity? Italy’s sectoral collective agreements make no adjustment, as they establish national wage floors irrespective of regional variation in income or cost of living. While some favour its equalizing action, many have argued that this approach causes inefficiencies that include low migration to more productive areas and high structural unemployment in less productive ones. This paper addresses these concerns by studying the spatial equalization of minimum wages in 1972, when the system was first introduced, using an original dataset of labour market variables covering the period 1962-1981. First, the paper presents an augmented gravity model of internal migration showing that spatial differentials in nominal minimum wages were a strong pull factors for both short- and long-distance migration before the reform, but not afterwards. Then, discussing potential mechanisms, the paper shows that the decrease in internal migration during the 1970s was associated with the inception of the spatial mismatches that characterize Italy’s labour markets to this day. |
| Keywords: | Wage Differentials, Internal Migration, Labor Economic History. |
| JEL: | J31 J61 N34 R23 |
| Date: | 2024–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:716 |
| By: | Zhihui Li (Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences); Chao Li (University of Auckland); John Gibson (University of Waikato); Xiangzheng Deng (Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences) |
| Abstract: | China has experienced unprecedented largescale internal migration since the late 1970s. We analyse spatiotemporal changes in migration for 284 prefectural-level cities in China using the 2000, 2010 and 2020 censuses. These cities have over 90% of China's population. Attractiveness of cities varies with amenities, so we use econometric models to identify city-level and province-level economic characteristics and social and natural amenities that drive net migration. Inter-city migration in China is still growing rapidly, with striking regional disparities. China's three urban mega-regions (Beijing-Tianjin, Yangtze River Delta, Pearl River Delta) received most migrants over these two decades, with many coastal and tier-2 cities, especially inland provincial capital cities, emerging as new destinations since 2010. Conversely, inland lower-tier cities have experienced large population losses, especially in Northeast China recently. The importance of amenities in affecting migration patterns differs between all sample cities and 35 major cities, and changes over time. Employment opportunities, and higher wages and development levels still attract migrants, but migrants trade off levels versus growth (source areas are poorer but faster growing than destinations). Booming housing markets have not pushed migrants away. Both city and province fiscal pressures have negative impacts on the net migration rate, while province-level fiscal decentralization enhances attractiveness. Cities with better public transportation services and more pleasant climate are more attractive to migrants. These factors matter less for the major cities, apart from economic opportunities and transportation services. Air quality and province-level economic development significantly contribute to differences in net migration rates among the major cities. Findings from this study can help policymakers to formulate governance measures for sustainable city development during the largest rural-to-urban population flow in human history. |
| Keywords: | inter-city migration;net migration rate;migration patterns;urban amenities;China |
| JEL: | R12 |
| Date: | 2024–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:24/05 |
| By: | Simone Maxand; Hend Sallam |
| Abstract: | We investigate the impact of immigration on public budgets using administrative data from German districts (Kreise). While previous literature suggests that the fiscal benefits of migration depend on government spending responses to immigration, the local-level effects in Germany remain relatively unexplored. Our study analyzes how immigration influences public spending, the provision of public goods, and public revenues from 2010 to 2019. Employing the post-double selection LASSO method for model identification and instrument generation, our results suggest that an increase in the foreign population proportion at the district level does not significantly affect public investment spending or collected tax revenues. Overall, along with 2011 results at the community level (Gemeinde), this research discusses the importance of distinguishing between different local levels, migration groups, and expenditure categories, when studying the gains and burdens of immigration in Germany. |
| Keywords: | immigration, size of the government, welfare state, local budgets, spatial economy, public revenues, public spending |
| JEL: | H53 I38 H70 H72 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11162 |