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on Economic Geography |
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Issue of 2024‒09‒02
seven papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Stihl, Linda (CIRCLE, Lund University); Hermelin, Brita (Linköping University) |
| Abstract: | Even though place is associated with the local, place-based policy approaches target the regional level of government. Addressing this conundrum, this paper focuses on the local level studying municipalities’ regional development work in different types of regions in three Nordic countries. Through a comparative study across regional and national contexts, the paper identifies the need to clarify the strategies of municipalities in place-based approaches. The results explain the uneven capabilities and structural constraints of municipalities impacting the viability of the subsidiarity principle bringing policy design and implementation closer to citizens. |
| Keywords: | Change agency; regional development; municipalities; place-based policy; subsidiarity |
| JEL: | R11 R58 |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_010 |
| By: | Davide Fiaschi; Angela Parenti; Cristiano Ricci |
| Abstract: | This paper studies the evolution of economic activities using a continuous time-space aggregation-diffusion model, which encompasses competing effects of agglomeration and congestion. To bring the model to the real data, a novel discretization technique over time and space is introduced, which is able to disentangle the spatial effects into pure topography, agglomeration, repulsion, and diffusion forces. The estimate for the Italian municipalities' personal income over the period 2008-2019 supports the models' main predictions and outperforms the most common spatial econometric models used in the literature. This work represents a fundamental step in the development of econometric methods for partial differential equations in spatial economics. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.14267 |
| By: | Araujo, Inacio F. (Departamento de Economia, Universidade de São Paulo); Haddad, Eduardo A. (Departamento de Economia, Universidade de São Paulo) |
| Abstract: | This study explores changes in regional inequality and examines distinct adjustment patterns among Brazilian states investigating the role played by interregional trade during economic stagnation. We combine structural decomposition analysis with observed demographic changes to identify the main drivers of change in regional inequality. By focusing on different dimensions of integration, we show that changes in intra-regional and international integration were the main drivers of the observed reduction in regional inequality. However, interregional trade was critical to drive changes in regional value-added, acting as an absorber of structural changes for the richer states. |
| Keywords: | Interregional trade; Domestic trade; Regional disparity; Location of economic activities; Economic recession; Input-output analysis. |
| JEL: | C67 F14 O18 R15 |
| Date: | 2024–08–02 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:2024_007 |
| By: | Rosa Sanchis-Guarner; Nikodem Szumilo; Antoine Vernet |
| Abstract: | We study the impact of improved rail access on entrepreneurship rates in England and Wales. We use data from the Census spanning 2001, 2011, and 2021 to analyse self-employment rates in granular geographic areas of around 200 residents. Specifically, we study how they respond to changes in the distance to the nearest train station occurring due to 56 new station openings. We find that all else equal, moving 1 km further away from a station reduces self-employment rates by 0.12 percentage points, with the effect dissipating beyond 7 km. Secondary results suggest that access to rail makes it easier to become self-employed while not making it more attractive compared to employment. Our findings suggest that rail infrastructure improvements can support local entrepreneurship and economic activity, contributing to regional development and reducing economic inequality. |
| Keywords: | entrepreneurship, rail, self-employment |
| JEL: | L26 O18 R11 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11227 |
| By: | Hong, Guangbin |
| Abstract: | High-skilled workers and high-productivity firms co-locate in large cities. In this paper, I study how the two-sided sorting of workers and firms affects spatial earnings inequality, efficiency of the allocation of workers and firms across cities, and the welfare consequences of place-based policies. I build a general equilibrium model in which heterogeneous workers and firms sort across cities and match within cities. I estimate the model using Canadian matched employer-employee data and decompose the urban earnings premium, finding that worker and firm sorting account for 67% and 27% of this premium, respectively. The decentralized equilibrium is inefficient as low-productivity firms overvalue locating in high-skilled cities. The optimal spatial policy would incentivize high-skilled workers and high-productivity firms to co-locate to a greater extent while redistributing income towards low-earning cities, leading to a 6% increase in social welfare. Model counterfactuals underscore the importance of two-sided sorting when evaluating distributional and aggregate outcomes of place-based policies. |
| Keywords: | Two-sided sorting, matching, spatial inequality, place-based policies, optimal spatial policy |
| JEL: | E25 R12 R13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:clefwp:300864 |
| By: | Fratesi, Ugo |
| Abstract: | Recent papers show that the impact of Cohesion Policy is not uniform in space but larger, smaller or insignificant depending on the regions. These outcomes mostly depend on the characteristics of each territory (conditioning factors). This paper reviews them and investigates, through descriptive statistical techniques, their presence in European regions. European regions are then classified in terms of need on two dimensions: GDP per capita and GDP growth. Results show that most policy favourable conditioning factors are also factors of growth. As a consequence of that, the potential policy impact is often larger in those regions which are less in need of support. In terms of policy consequence, cohesion policy should remain place-based and fully consider the regional specificities, as well the specificities of the various territories inside a region. However, since the conditioning factors for policy effectiveness are less present in regions more in need, acceptting trade-offs will be required, and in particular one between growth and policy effectiveness on one hand and territorial cohesion on the other. Lagging regions will also require interventions creating framework conditions, and those territorial assets which they are missing. |
| Keywords: | Regional Policy, Cohesion, EU, Conditioning Factors |
| JEL: | R58 R11 R12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300676 |
| By: | Jonghyun Kim; Donghyeon Yu; Hyoji Choi; Dongwoo Seo; Bogang Jun |
| Abstract: | This study introduces a metric designed to measure urban structures through the economic complexity lens, building on the foundational theories of urban spatial structure, the Central Place Theory (CPT) (Christaller, 1933). Despite the significant contribution in the field of urban studies and geography, CPT has limited in suggesting an index that captures its key ideas. By analyzing various urban big data of Seoul, we demonstrate that PCI and ECI effectively identify the key ideas of CPT, capturing the spatial structure of a city that associated with the distribution of economic activities, infrastructure, and market orientation in line with the CPT. These metrics for urban centrality offer a modern approach to understanding the Central Place Theory and tool for urban planning and regional economic strategies without privacy issues. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.19762 |