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on Economic Geography |
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Issue of 2025–04–28
eight papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Anthony J. Venables |
| Abstract: | The idea that people want to go to where the jobs are is intuitive yet is absent from the standard quantitative spatial modelling approach in which location choices are guided by prices, without reference to quantities (the number of jobs in a place). The purpose of this paper is to fill this gap by making jobs, as well as places, the objects of household choice. This involves minor change to the modelling approach used in the literature and provides a simple description of labour market matching. Similar modification of the modelling of firms' location choices captures the idea that these are shaped by both wage costs and the availability of workers with appropriate skill. These modifications yield powerful agglomeration forces, as workers' location choices become positively influenced by the number of jobs in a place, and firms' decision are shaped by the number of workers with appropriate skills. Results are established analytically and in a regional model in which the equilibrium distributions of workers and sectors are demonstrated. |
| Keywords: | spatial models, agglomeration, discrete choice, matching |
| Date: | 2025–03–19 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2087 |
| By: | Suelene Mascarini; Pierre-Alexandre Balland; Renato Garcia |
| Abstract: | This study examined the effects of intra-regional and transnational linkages on technological diversification in Brazilian regions from 1997 to 2020, highlighting the role of stakeholder collaboration in fostering knowledge and skill development. Our findings reveal that regional linkages positively influence diversification, whereas transnational connections primarily help to preserve existing technological specialisations. These results offer valuable insights for policymakers seeking to promote innovation and diversification in emerging economies, underscoring the importance of both regional and international collaborations for technological growth. This study investigates how intra-regional and transnational linkages affect technological diversification in Brazilian regions between 1997 and 2020. We focus on both the emergence of new technological specialisations and the persistence of existing ones. Using patent data from the Brazilian Patent Office and panel regression models with fixed effects, we examine how the structure of inter-regional and international connections relates to the dynamics of diversification. Our findings suggest that domestic regional linkages promote the entry of new specialisations, while transnational linkages are more closely associated with the retention of existing ones. These results offer insights for policymakers seeking to foster innovation in emerging economies by strengthening both regional networks and global connections. |
| Keywords: | transnational linkages; regional linkages; complementary capabilities; regional diversification. |
| JEL: | O19 O31 R11 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2509 |
| By: | Capello, Roberta; Rodríguez-Pose, Andrés |
| Abstract: | Europe’s existential economic challenge has been laid bare in Mario Draghi’s September 2024 competitiveness report. The continent faces a profound productivity crisis, one that threatens to relegate Europe to the margins of global economic influence. Yet, while the report offers a comprehensive diagnosis and prescribes remedies for Europe’s anaemic productivity growth, it overlooks a crucial dimension: the power of place. This paper examines how this territorial oversight undermines the report’s effectiveness. We argue that Europe’s path to renewed economic vigour lies not in homogeneous continental strategies, but in harnessing its potential and diverse regional capabilities. The continent’s economic renaissance depends on recognising that its apparent weakness – its territorial diversity – may indeed be a great strength. From our perspective, unlocking Europe’s latent potential requires policies tailored to regional specificities. Only by embracing rather than suppressing its endogenous potential, wher-ever it can be found, can Europe hope to reverse its productivity decline. The challenge ahead is not merely technical but fundamentally territorial: Europe must craft a future where productivity growth emerges from its territorial distinctiveness, not in spite of it. |
| Keywords: | Draghi report; European competitiveness; regional dimension |
| JEL: | R10 R58 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:127768 |
| By: | Bernard, Josef; Refisch, Martin; KosteleckAý, Tomáš; Grzelak, Anna; Konopski, Michał; Klärner, Andreas |
| Abstract: | The concept of left-behind places or regions has skyrocketed in recent years and various empirical studies are using the concept to describe (not only) economically lagging regions. Yet, there is still no settled definition and method of measurement of left-behindness in the social sciences. In the methodological part this working paper presents a plausible conceptualisation and operationalisation of left-behind regions in European Union countries. The operationalization of "left-behindness" is guided by several principles: it is relative to national standards, multidimensional, and both structural and dynamic. Labour market regions are identified as the appropriate spatial unit for analysis. The study uses NUTS3 regions, aggregated for metropolitan areas and adjacent regions, excluding extraterritorial and small countries. A total of 918 regions across 25 countries are analysed using indicators related to economic viability, social structure, and population development from 1993 to 2021. Our empirical analysis highlights how the nature of "left-behindness" varies across Europe, with a particular focus on Central and Eastern Europe. In these regions, left-behindness is closely tied to regional disadvantages, characterized by low economic prosperity, reduced social status, and higher poverty rates. These areas often experience stagnation or shrinkage, with non-metropolitan regions being particularly affected, possibly due to poorer infrastructure. In other parts of Europe, the different dimensions of left-behindness are less coherently associated and do not form clear spatial patterns. In particular, poverty is spatially decoupled from low economic prosperity in many countries. Overall, we identified macro-regional differences of left-behindness manifestation across Europe, shaped by historical, economic, and social factors unique to each region. |
| Abstract: | Das Konzept der "abgehängten" Orte oder Regionen hat in den vergangenen Jahren stark an Bedeutung gewonnen, und verschiedene empirische Studien verwenden das Konzept, um (nicht nur) wirtschaftlich rückständige Regionen zu beschreiben. Dennoch gibt es in den Sozialwissenschaften bislang keine einheitliche Definition und Methode zur Messung von "Abgehängtsein". Im methodischen Teil dieses Thünen Working Papers wird eine neue Konzeptualisierung und Operationalisierung von "abgehängten" Regionen vorgestellt. Die Operationalisierung von "Abgehängtsein" orientiert sich an mehreren Prinzipien: Sie ist relativ zu nationalen Standards, multidimensional und sowohl strukturell als auch dynamisch. Arbeitsmarktregionen werden als geeignete räumliche Einheit für die Analyse festgelegt. Die Studie verwendet dafür NUTS3-Regionen und aggregiert dabei Großstadtregionen und angrenzende Regionen. Insgesamt 918 Regionen in 25 Ländern werden anhand von Indikatoren für die wirtschaftliche Lebensfähigkeit, die Sozialstruktur und die Bevölkerungsentwicklung von 1993 bis 2021 analysiert. Unsere empirische Analyse zeigt, wie "Abgehängtsein" in Europa variiert, wobei der Schwerpunkt auf Mittel- und Osteuropa liegt. In diesen Regionen ist "Abgehängtsein" eng mit regionalen Benachteiligungen verbunden, die durch geringen wirtschaftlichen Wohlstand und höhere Armutsraten gekennzeichnet sind. Diese Gebiete sind häufig von Stagnation oder Schrumpfung betroffen, wobei die nicht-metropolitanen Regionen besonders betroffen sind, was möglicherweise auf eine schlechtere Infrastruktur zurückzuführen ist. In anderen Teilen Europas sind die verschiedenen Dimensionen des "Abgehängtseins" weniger kohärent miteinander verbunden und bilden keine klaren räumlichen Muster. Insbesondere Armut ist in vielen Ländern räumlich von einem geringen wirtschaftlichen Wohlstand entkoppelt. Insgesamt haben wir für Europa regionale Unterschiede in der Ausprägung des "Abgehängtseins" festgestellt, die durch historische, wirtschaftliche und soziale Faktoren geprägt sind und für jede Region einzigartig sind. |
| Keywords: | left-behind regions, European Union, abgehängte Regionen, Europäische Union |
| JEL: | F63 O18 R11 R12 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:jhtiwp:312563 |
| 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 antisystem 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 KSéCM. In eastern Germany, the association between leftbehindness 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 capturesthe 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. |
| Abstract: | Der Begriff der "abgehängten" Orte und Regionen hat in akademischen Debatten über regionale Disparitäten und sich verändernde Wahllandschaften an Bedeutung gewonnen. Dieses Paper schlägt einen Ansatz zur Konzeptualisierung und Messung regionaler Disparitäten in drei mittel- und osteuropäischen Ländern vor, der über eine dichotomische Unterteilung der Regionen in "abgehängt" versus "nicht abgehängt" hinausgeht. "Abgehängtheit" wird als ein mehrdimensionales Kontinuum verstanden, das regionale Disparitäten in Bezug auf Lebensstandards und sozioökonomische Chancen darstellt. Unser Verständnis von "abgehängten" Regionen basiert weitgehend auf den aktuellen wirtschaftlichen Bedingungen der Regionen und deren Dynamik, geht jedoch darüber hinaus und schließt ein breites Spektrum sozial relevanter Aspekte der Lebensbedingungen ein, einschließlich Bildungsniveau und Armut. Das Paper schlägt einen neuen Ansatz zur Messung regionaler Disparitäten vor und untersucht, wie diese Wahlverhalten erklären. Das Paper nimmt Bezug auf die grundlegenden Argumente der Debatte über die "Geographie der Unzufriedenheit". Darin wird argumentiert, dass die zunehmende Unterstützung für populistische, rechtspopulistische national-konservative und Anti-System-Parteien oft eng mit räumlichen Mustern regionaler Disparitäten verbunden ist. Diese These wurde wiederholt in westeuropäischen Ländern getestet, jedoch in Mittel- und Osteuropa noch unzureichend untersucht. Mit unseren Analysen können wir die Gültigkeit der Annahmen der "Geographie der Unzufriedenheit"für alle drei untersuchten Länder im Grundsatz bestätigen. Die Neuheit und der Mehrwert dieses Papers bestehen darin, dass darin das Verständnis von regionalen Disparitäten und Wahlverhalten erweitert wird. Unser multidimensionaler Ansatz zur Messung regionaler Disparitäten ermöglicht eine umfassende Interpretation räumlicher Muster populistischen Wahlverhaltens in Mittel- und Osteuropa. Die Beziehung zwischen regionalem "Abgehängtsein" und Wahlverhalten variiert in ihrer Stärke zwischen den verschiedenen Ländern. In Tschechien bestehen starke Assoziationen zu den Parteien ANO und SPD, jedoch nicht zur KSéCM. In Ostdeutschland ist der Zusammenhang zwischen "Abgehängtsein" und Unterstützung für die AfD schwächer, ebenso wie in Polen für die PiS. Ein weiterer Beitrag des multidimensionalen Konzepts des "Abgehängtseins" ist die Erkenntnis, dass verschiedene Dimensionen unterschiedliche Wahleffekte haben. Es scheint einen systematischen Einfluss von wirtschaftlichem Wohlstand und regionalem Wachstum zu geben, der sich vor allem in Unterschieden zwischen städtischen Gebieten und deren ländlichem Umland einerseits und dem Rest des Landes andererseits zeigt. Der Zusammenhang zwischen Armut und sozialer Exklusion auf der einen Seite und dem Wahlverhalten auf der anderen Seite ist jedoch weniger stabil. |
| Keywords: | Geographie der Unzufriedenheit, politische Geographie, abgehängte Regionen, regionale Disparitäten, Wahlgeographie, Deutschland, Tschechien, Polen, Europäische Union, geography of discontent, political geography, left-behind places, regional disparities, electoral geography, Germany, Czechia, Poland, European Union |
| JEL: | D72 O18 O57 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:jhtiwp:312565 |
| By: | Osswald do Amaral, Francisco; Toth, Mark; Zdrzalek, Jonas |
| Abstract: | This paper examines the relation between location, liquidity, and prices in urban housing markets. We build geospatial datasets for German and U.S. cities and show that housing liquidity and prices jointly decrease with distance to the city center. Using transaction-level data, we estimate a spatial housing search model and show that the cost of travel to the city center determines the joint spatial distribution of housing liquidity and prices. In a counterfactual analysis, we find that frictional illiquidity lowers prices in the outskirts by 7% relative to the city center and explains 19% of the spatial price gradient. |
| Keywords: | housing liquidity, housing prices, cities, spatial equilibrium, housing demand |
| JEL: | G12 G51 R21 R30 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:315471 |
| By: | Batabyal, Amitrajeet; Beladi, Hamid |
| Abstract: | We analyze how deterministic political competition between the elites and the so-called creative class shapes economic outcomes in a stylized region. By deterministic, we mean a case where political power has shifted from the elites to the creative class with probability one. There are three groups in our region: workers, creative class members, and the elites. Unlike previous studies, tax policy in our region is set not by the elites but instead by the creative class. In this setting, we first present a counterintuitive result in which the creative class prefers to tax itself, and not the elites or the workers, with the tax proceeds being redistributed also to itself via lump-sum transfers. Second, we explain why this counterintuitive result makes sense. Finally, we discuss whether the above counterintuitive result will hold if the proceeds of taxation are redistributed using lump-sum transfers to all the groups in our region and not just to the creative class. |
| Keywords: | Creative Class, Elite, Lump-Sum Transfer, Political Competition, Tax Policy |
| JEL: | H21 R11 |
| Date: | 2025–01–15 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124205 |
| By: | Bae, Jinwon (Korea Institute for Industrial Economics and Trade); Lee, Dongkyu (Korea Institute for Industrial Economics and Trade) |
| Abstract: | In South Korea, a growing chorus of experts sees the digital divide between the Seoul Capital Area (SCA) -- which includes the capital Seoul, the nearby metropolis of Incheon, and the surrounding province of Gyeonggi -- and everywhere else in the country as having seriously adverse effects on both national economic and industrial competitiveness and regional development. Research has shown that this gap hinders regional economic growth and stifles innovation, which in turn perpetuates and deepens social inequality (Ko et al., 2022). Up to now, the Korean government’s digital transformation (DX) policies have focused on supporting the development of digital technology and leveraging digital technologies to increase efficiency and productivity. In this paper, we set out to demonstrate the importance of facilitating DX at the local level and analyzing the relationship between digital activity and regional innovative growth. Based on the results of our analysis, we identify the implications for policies capable of bridging the digital divide and promoting balanced development across South Korea. |
| Keywords: | digitalization; digital transformation; regional economics; regional development; regional disparities; regional inequality; Seoul Capital Area; SCA; digital divide; population decline; demographic decline; population aging; innovative growth; regional innovation; South Korea; Korea Institute for Industrial Economics and Trade; KIET |
| JEL: | R10 R11 R12 R38 |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kieter:2025_001 |