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on Economic Geography |
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Issue of 2025–03–03
eleven papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Klaus Desmet; Fernando Parro |
| Abstract: | We examine the recent literature that studies the spatial distribution of economic activity across both space and time. We discuss the methodological advances enabling the incorporation of dynamic forces of economic activity—such as endogenous innovation, forward-looking location choices, capital and asset accumulation, idea diffusion, and stochastic fundamentals—into frameworks with many heterogeneous locations and a rich economic geography. These frameworks remain tractable for quantitative evaluations. We also discuss the wide range of empirical questions explored in recent work through the lens of these frameworks, including the global and local economic impacts of climate change, the dynamic effects of trade and migration policy, labor market adjustments to import competition, the spatial consequences of structural change, the dynamic effects of place-based policies, and the long-run spatial effects of large-scale infrastructure projects. |
| JEL: | F10 F16 F22 O11 O18 O33 R11 R12 R23 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33443 |
| By: | Kyle Fee |
| Abstract: | Using a common reduced-form regional growth model framework, an expanded geographic classification of counties, additional years of data, a trio of income inequality metrics, and multiple empirical specifications, this analysis confirms and builds upon the notion that the nature of the relationship between income inequality and economic growth varies across geography (Fallah and Partridge, 2007). A positive relationship between an income Gini coefficient and per capita income growth is observed only in central metro counties with population densities greater than 915 people per square mile or in about 5 percent of all counties, whereas previous research found a positive relationship in all metropolitan counties (27 percent of counties) and a negative relationship in nonmetropolitan counties. Where inequality is in the distribution is also shown to impact this relationship. Inequality in the top and bottom halves of the income distribution has a positive relationship with growth within this 5 percent of counties. However, in most locations (the other 95 percent of the counties), inequality in the bottom half of the income distribution has either no statistical relationship with growth or a positive relationship, while inequality in the top half of the income distribution tends to have a negative relationship. These patterns are relatively stable over time but tend to not be robust to the inclusion of county fixed effects. These results provide some evidence that the mechanisms explaining how this relationship varies across places are more likely associated with agglomeration and market incentives rather than social cohesion. This analysis also highlights the need for a robust research agenda focused on further refining the growth model along with incorporating new data sources and concepts of income inequality. |
| Keywords: | income inequality; regional growth; income Gini coefficient |
| JEL: | R11 O40 O18 D31 |
| Date: | 2025–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedcwq:99562 |
| By: | Bernard, Josef; Refisch, Martin; Grzelak, Anna; Bański, Jerzy; Deppisch, Larissa; Konopski, Michał; Kostelecký, Tomáš; Kowalski, Mariusz; Klärner, Andreas |
| Abstract: | Recently, the notion of left-behind places and regions has gained ground in academic debates on regional inequality and changing electoral landscapes. This paper proposes an approach to conceptualising and measuring regional “left-behindness” in three Central Eastern European countries that goes beyond a dichotomous division of regions into “left-behind” versus “not left-behind”. It understands left-behindness as a multi-dimensional continuum, representing regional disparities in living standards and socio-economic opportunities. Our understanding of left-behind plades is based to a large extent on the current economic conditions of the regions and their dynamics, but goes beyond them to include a wider range of socially relevant aspects of the living conditions, including educational attainment, poverty, and the attractiveness of places to live. The paper proposes an approach to measuring regional left-behindness and explores how it explains voting patterns. Thus, the paper is motivated by the seminal arguments of the 'geography of discontent' debate. Its proponents have argued that rising support for populist, right-wing nationalist-conservative and anti-system parties is often closely linked to spatial patterns of regional inequality. This argument has been repeatedly tested in Western European countries, but has remained under-researched in Central Eastern Europe. Using our approach, we were able to confirm the validity of the "geography of discontent" as a central thesis for all three countries studied. The novelty and added value of this study is that it extends the understanding of left-behindness and voting. Our multidimensional approach to left-behindness allows for a comprehensive interpretation of spatial patterns of populist voting in Central Eastern Europe. The relationship between regional left-behindness and voting behaviour varies in strength across different countries. In Czechia, there are strong associations for the parties ANO and SPD, but not for the KSČM. In eastern Germany, the association between left-behindness and support for the AfD is weaker, as is the case in Poland for the PiS. Another contribution of the multidimensional concept of left-behindness is the finding that different dimensions of left-behindness have different electoral effects. There appears to be a systematic influence of economic prosperity and relative expansion, which primarily captures the contrast between metropolitan areas and their hinterlands on the one hand, versus the rest of the country on the other—not only in terms of economic prosperity and relative expansion, but also in terms of a significant social status hierarchy. Poverty, however, shows a less stable relationship. |
| Keywords: | Community/Rural/Urban Development |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:jhimwp:350171 |
| By: | Jesús López-Rodríguez; Diego Martínez-López; Brais Pociña-Sánchez |
| Abstract: | The foot-loose capital (FC) models predict that agglomeration forces create rents for the mobile factor (capital), which can be easily taxed, and thus higher equilibrium tax rates are expected. This paper uses a highly flexible econometric specification (P-Spline spatial autoregressive model, PS-SAR) to look at the relationship between tax rates and agglomeration economies in Spain over the period 2013-2020. Our results show the existence of a minimum level of agglomeration economies that are required to find taxable agglomeration rents. This outcome calls for a reassessment of the linear FC models to disentangle which mechanisms might lead to these phenomena. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:fda:fdaddt:2025-02 |
| By: | Khandelwal, Vatsal; Chacha, Peter W.; Verena Christina Wiedemann; Kirui, Benard K. |
| Abstract: | The spatial configuration of domestic supply chains plays a crucial role in the transmission of shocks. This paper investigates the representativeness of formal firm-to-firm trade data in capturing overall domestic trade patterns in Kenya — a context with a high prevalence of informal economic activity. It first documents a series of stylized facts and shows that informal economic activity is not randomly distributed across space and sectors, with a higher incidence of informality in downstream sectors and smaller regional markets. The paper then links granular transaction-level data on formal firms with data on informal economic activity to estimate a structural model and predict a counterfactual network that accounts for informal firms. The findings show that formal sector data overstates the spatial concentration of aggregate trade flows and under accounts for trade within regions and across regions with stronger social ties. Additionally, the higher the informality in a sector and region is, the more formal sector data underestimates its vulnerability to domestic output shocks and overestimate its vulnerability to import shocks. |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10932 |
| By: | Benjamin Cornejo Costas; Nicola Cortinovis; Andrea Morrison; |
| Abstract: | This paper investigates the relationship between migrant inventors, informal institutions and the development of green technologies in European regions. We argue that migrant inventors act as an unlocking mechanism that transfers external knowledge to host regions, and that informal institutions (i.e. social capital, migrant acceptance) mediate this effect. The work is based on an original dataset of migrant inventors covering 271 NUTS2 regions in the 27 EU countries, the UK, Switzerland, and Norway. The analysis shows that migrant inventors help their host regions to diversify into green technologies. The regions with the highest levels of both measures of social capital show a higher propensity of migrant inventors to act knowledge brokers. Conversely, regions with lower levels of migrant acceptance and social capital do not seem to contribute to this effect. |
| Keywords: | lock-in, international migration, green innovation, social capital, acceptance, regional diversification, EU regions |
| JEL: | F22 J61 O30 R12 Q55 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2503 |
| By: | MATTIA BALESTRA; GIULIO CAINELLI; ROBERTO GANAU; NADIIA MATSIUK; MARIO PASQUATO; ROBERTO PIERDICCA |
| Abstract: | We combine history with economic geography to contribute shading light on the long-run determinants of territorial development differentials in Italy. Specifically, we study the effects of historical sovereignty change on current local economic development. We measure historical sovereignty change through the yearly number of changes in sovereignty occurred in the period 1000–1861⎯that is, until the unification of Italy⎯and assess its effects on labor productivity in 2018. We estimate a negative effect of historical sovereignty change on current local economic development, and identify⎯both theoretically and empirically⎯civic capital as a plausible underlying mechanism. |
| Keywords: | Historical sovereignty change; civic capital; local economic development; Italy |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2504 |
| By: | Gharad T. Bryan; Kyra Frye; Melanie Morten |
| Abstract: | Research at the intersection of development and spatial economics is increasingly important to address pressing issues in rapidly-urbanizing cities in low- and middle- income countries. This handbook chapter presents the canonical spatial model and then explores it through the lens of development economics, pointing out the "on-the-ground" facts of missing markets, frictions, and context-specific parameters that are often absent in applications of the model. We then discuss what the existing literature and the spatial model tell us about the optimal allocation of labor across space. We close by highlighting exciting possibilities for future work that integrates the spatial model with the reality of low- and middle-income countries. |
| JEL: | O18 R0 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33453 |
| By: | Carolina Castaldi |
| Abstract: | Mapping innovation in space is part and parcel of research on the geography of innovation. The maps we produce reflect both how we conceptualize innovation and the data and indicators we choose to measure it. They can shape research directions and policy strategies. As research on the geography of innovation expands, this paper asks the question: How do innovation maps reflect these evolving perspectives? |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2505 |
| By: | Antonin Bergeaud (CEPR - Center for Economic Policy Research, Centre de recherche de la Banque de France - Banque de France); Arthur Guillouzouic (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IPP - Institut des politiques publiques, Sciences Po - Sciences Po) |
| Abstract: | Following Bergeaud et al. (2022), we construct a new measure of proximity between industrial sectors and public research laboratories. Using this measure, we explore the underlying network of knowledge linkages between scientific fields and industrial sectors in France. We show empirically that there exists a significant negative correlation between the geographical distance between firms and laboratories and their scientific proximity, suggesting strongly localized spillovers. Moreover, we uncover some important differences by field, stronger than when using standard patent-based measures of proximity. |
| Keywords: | Knowledge Spillovers, Technological Distance, Public Laboratories |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:pseptp:hal-04938250 |
| By: | Ifeanyi Nzegwu Edochie; David Newhouse; Tzavidis, Nikos; Schmid, Timo; Elizabeth Mary Foster; Hernandez, Angela Luna; Aissatou Ouedraogo; Aly Sanoh; Aboudrahyme Savadogo |
| Abstract: | The paper presents a methodology to generate experimental small area estimates of poverty in four West African countries: Chad, Guinea, Mali, and Niger. Due to the absence of recent census data in these countries, household-level survey data are integrated with grid-level geospatial data, which are used as covariates in model-based estimation. Leveraging geospatial data enables reporting of poverty estimates more frequently at disaggregated administrative levels and makes estimation feasible in areas for which survey data are not available. The paper leverages the availability of a recent census in Burkina Faso for evaluation purposes. Estimates obtained with the same survey instruments and candidate geospatial covariates as the other four countries are compared against estimates obtained using recent census data and an empirical best predictor under a unit-level model. For Burkina Faso, the estimates obtained using geospatial data are highly correlated with the census-based ones in sampled areas but moderately correlated in non-sampled areas. The results demonstrate that in the absence of recent census data, small area estimation with publicly available geospatial covariates is |
| Date: | 2024–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10892 |