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on Economic Geography |
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Issue of 2024–11–25
eight papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Grillitsch, Markus (CIRCLE, Lund University); Asheim, Björn (University of Stavanger) |
| Abstract: | The chapter discusses the theoretical reorientation in economic geography over the last twenty years from a focus on structures, represented by regional innovation systems, to addressing the role of human agency in regional economic development, and reflects on what the two approaches can contribute to achieving sustainable regional restructuring. We are doing this by focusing on two articles – published in 2002 and 2022 - representing the two approaches. The 2002 article discusses the role of place-specific, local resources and external knowledge in strengthening the competitiveness and innovativeness of firms and regions. This perspective is still relevant in analyses and designs of regional innovation policies. However, a realisation of the shortcomings of a structural approach to explaining the variations of regional development outcomes in different types of regions, has led to a more explicit focus on the importance of change agency in regional change processes, as articulated in the 2022 article. |
| Keywords: | Regional innovation systems; human change agency; regional restructuring; sustainability challenges; local and global; innovation policy |
| JEL: | O30 R10 |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2024_013 |
| By: | Crescenzi, Riccardo; Ganau, Roberto |
| Abstract: | This paper looks at inward foreign direct investment (FDI) and regional labour productivity in the aftermath of the Great Recession, exploring two FDI-induced effects. The first effect is linked with a capacity of FDI per se to trigger short-term productivity gains in response to a global shock. The second effect is associated with the degree of industrial diversification of these investment flows. The results suggest that it is not the amount of foreign investment received per se that matters for productivity recovery but its composition. A low degree of FDI diversification helped regions to gain productivity after the shock. The effect is stronger in regions with an industrial profile concentrated in a limited number of sectors, particularly in services. FDI can support regional recovery, but in the short run, it does so by matching and reinforcing existing regional specialisation profiles and to the benefit of services-oriented regions. |
| Keywords: | inward FDI; industrial profile; regional growth; European Union |
| JEL: | F20 R11 R12 |
| Date: | 2024–10–23 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:125406 |
| By: | Lorenzo Incoronato; Salvatore Lattanzio |
| Abstract: | This paper studies a place-based industrial policy (PBIP) aiming to establish industrial clusters in Italy in the 1960s-70s. Combining historical archives spanning one century with administrative data and leveraging exogenous variation in government intervention, we investigate both the immediate effects of PBIP and its long-term implications for local development. We document agglomeration of workers and firms in the targeted areas persisting well after the end of the policy. By promoting high-technology manufacturing, PBIP favored demand for business services and the emergence of a skilled local workforce. Over time, this produced a spillover from manufacturing – the only sector targeted by the program – to services, especially in knowledge-intensive jobs. Accordingly, we estimate higher local wages, human capital, and house prices in the long run. We provide suggestive evidence that these persistent effects may depend on the initial conditions of targeted locations. |
| Keywords: | place-based industrial policy, employment, wages, agglomeration |
| JEL: | J24 N94 O14 O25 R58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11397 |
| By: | Elhoussaine Wahyana; Eduardo Amaral Haddad |
| Abstract: | The debate on global value chains (GVCs) has emphasized countries’ contributions to value-added creation. From an intercountry perspective, a new body of research is addingto this debate by studying how subnational regions contribute to the indicators in specific countries. Proper assessment of economic contributions is essential for designing incentive policies. This paper analyzes the role played by the main trading partners of Moroccan regions in local value chains. We use input-output (IO) analysis to decompose regional value-added in Morocco, based on different sources of domestic and foreign final demand, taking into account the differences in regional economic structures and the nature of systematic interdependence associated with the structure of inter-regional linkages in Morocco. For each final demand originating from and into one of the Moroccan regions, we estimate measures of trade in value-added (TiVA). The output decomposition of final demand into domestic and foreign demand, where the latter is broken down into the final demand from each trading partner, serves as the methodological anchor for the study. We use the inter-regional input-output table for Morocco with 2019 data. The measures of trade in value-added reveal different inter-regional and international trade integration hierarchies, with implications for regional inequality in the country. We try to answer two main questions. First, how do domestic absorption and foreign exports affect value-added generation in Moroccan regions? Second, what is the regional value-added content incorporated in the components of final demand by geographical source? |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:rp_01-24 |
| By: | Hunt, Jennifer (Rutgers University); Cockburn, Iain (Boston University); Bessen, James (Boston University) |
| Abstract: | Using our own data on Artificial Intelligence publications merged with Burning Glass vacancy data for 2007-2019, we investigate whether online vacancies for jobs requiring AI skills grow more slowly in U.S. locations farther from pre-2007 AI innovation hotspots. We find that a commuting zone which is an additional 200km (125 miles) from the closest AI hotspot has 17% lower growth in AI jobs' share of vacancies. This is driven by distance from AI papers rather than AI patents. Distance reduces growth in AI research jobs as well as in jobs adapting AI to new industries, as evidenced by strong effects for computer and mathematical researchers, developers of software applications, and the finance and insurance industry. 20% of the effect is explained by the presence of state borders between some commuting zones and their closest hotspot. This could reflect state borders impeding migration and thus flows of tacit knowledge. Distance does not capture difficulty of in-person or remote collaboration nor knowledge and personnel flows within multi-establishment firms hiring in computer occupations. |
| Keywords: | Artificial Intelligence, technology adoption and diffusion |
| JEL: | O33 R12 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17325 |
| By: | Kenza Elass; Cecilia García-Peñalosa; Christian Schluter; Cecilia Garcia-Peñalosa |
| Abstract: | We examine the economic geography of gender wage gaps to understand the role that location plays in gender earning differences. Using panelised administrative data for the universe of French workers, our findings indicate that women benefit relatively more from density than men, with an urban wage premium (return to urban density) 48% higher than for men. We identify a number of factors that explain this gap, with a large share being explained by the structure of the local labour market, notably, the extent of occupational segregation. Another important factor is commuting patterns, while childcare availability plays only a moderate role. |
| Keywords: | gender wage gap, agglomeration economies, urban wage premium |
| JEL: | J31 J16 R10 R23 R12 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11374 |
| By: | Timothy J. Bartik (W.E. Upjohn Institute for Employment Research) |
| Abstract: | This paper provides estimates that lead to better U.S. labor market definitions. Current U.S. labor market definitions—for example, metropolitan areas and commuting zones—are unsatisfactory because they are ad hoc and usually do not correspond to commonly used local planning areas. This paper proposes basing U.S. labor market definitions on how a job shock to a county affects nearby counties’ employment rates. New estimates of county spillovers are presented. Using these estimated spillovers, new multicounty labor market definitions are based on maximizing a weighted sum of total spillovers captured, versus taking the average size of within-market effects. These new “spillover-defined local labor markets” (SLMs) correspond more closely to commonly used local planning areas, and they better capture spillovers and commuting flows without becoming excessively large. |
| Keywords: | Local labor markets, commuting zones, metropolitan areas |
| JEL: | R10 R12 R23 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:upj:weupjo:24-407 |
| By: | Ralph Siebert; Xiaoyan Zhou |
| Abstract: | This study provides a test for measurement of spatial competition in residential real estate markets. Several alternative spatial competition measures are tested. We employ a Bertrand oligopoly model with differentiated products and adopt a Spatial Autoregressive model using a two stage least squares estimator. Our results show that commonly used count-based measures using the number of competitors in specific geographic radii are outperformed by price-based measures using prices of nearest competing neighbors. The main reason is that the latter measure accounts for heterogeneous neighborhood density of competitors. The measure captures the decaying pattern of spatial price competition over distance. The measure also stands out in capturing het-erogeneous spatial price competition effects. We find that spatial price competition is more intense among high-value homes within the five nearest competing houses. |
| Keywords: | price effects, real estate market, spatial competition, spatial econometrics, spatial markets |
| JEL: | D40 R10 R30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11380 |