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on Economic Geography |
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Issue of 2026–03–09
nine papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Palm, Lennart; Perl, Maximilian; Yesilbayraktar, Ugur |
| Abstract: | We examine the local effects of South Korea's large-scale place-based industrial policy of constructing industrial complexes in left-behind regions. We compile a novel dataset on industrial complex designations dating back to the 1960s and link it to administrative establishment surveys. Using a stacked difference-in-differences design, we estimate the causal effects of industrial complex designation on local economic outcomes. We find that industrial complex designation increases aggregate local employment by approximately 15 percent ten years after designation and raises manufacturing output by roughly 40 percent. Employment growth occurs not only in the subsidized manufacturing sector but also in the services and construction sectors, which are not directly targeted by the policy. We find that each additional job in an industrial complex generates 1.3 to 1.9 jobs in the local economy, including the original job, with the 0.3 to 0.9 additional jobs being created primarily in the service sector. Nearly three quarters of the additional manufacturing employment results from the expansion of establishments that existed prior to the construction of the complex. While we find no evidence that industrial complexes increase manufacturing establishments' productivity, they increase investment, consistent with the policy primarily alleviating capital constraints. |
| Abstract: | Wir untersuchen die Auswirkungen der südkoreanischen Industriepolitik, die auf den Bau von Industriekomplexen in strukturschwachen Regionen abzielt, auf regionale Arbeitsmärkte. Dazu erstellen wir einen Datensatz zu allen Industriekomplexen, die seit Beginn der Politik in den 1960er Jahren ausgewiesen wurden, und verknüpfen ihn mit administrativen Betriebsdaten. Mithilfe eines stacked Difference-in-Differences-Ansatzes schätzen wir die kausalen Effekte der Ausweisung eines Industriekomplexes auf die lokale Wirtschaft. Unsere Ergebnisse zeigen, dass die Ausweisung eines Industriekomplexes die lokale Beschäftigung zehn Jahre nach der Ausweisung um etwa 15 Prozent erhöht und die industrielle Produktion um rund 40 Prozent steigert. Das Beschäftigungswachstum beschränkt sich dabei nicht auf den geförderten Industriesektor, sondern erstreckt sich auch auf Dienstleistungen und das Baugewerbe, die nicht direkt Ziel der Politik sind. Wir finden außerdem, dass jeder zusätzliche Arbeitsplatz in einem Industriekomplex insgesamt 1, 3 bis 1, 9 Arbeitsplätze in der lokalen Wirtschaft erzeugt, einschließlich des Arbeitsplatzes im Komplex selbst, wobei die zusätzlichen 0, 3 bis 0, 9 Arbeitsplätze überwiegend im Dienstleistungssektor entstehen. Knapp drei Viertel der zusätzlichen industriellen Beschäftigung gehen auf die Expansion von Betrieben zurück, die bereits vor dem Bau des Industriekomplexes existierten. Während wir keine Evidenz dafür finden, dass Industriekomplexe die Produktivität industrieller Betriebe erhöhen, steigern sie die Investitionen, was darauf hindeutet, dass die Politik primär Kapitalrestriktionen lockert. |
| Keywords: | place-based policy, industrial policy, migration, South Korea, Korea |
| JEL: | R11 R58 L52 J23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:337492 |
| By: | Emin Dinlersoz; Timothy Dunne; John C. Haltiwanger; Veronika Penciakova |
| Abstract: | The business entry literature typically observes firms only at the first hire. We provide a new perspective using linked administrative microdata tracking the universe of U.S. business applications and their transition into employer firms. We model entry as a two-stage process: pursuit of a business idea (proxied by a business application) and implementation (transition). Results show these margins are distinct and associate differently with local conditions. While both margins matter, high-startup locations are characterized by high application intensity, whereas low-startup locations exhibit low transition rates, suggesting geographic disparities in entry arise from different dynamics at each stage of the entrepreneurial process. |
| JEL: | L26 M13 R12 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34881 |
| By: | Kateryna Tkach (Gran Sasso Science Institute); Alberto Marzucchi (Gran Sasso Science Institute); Ugo Rizzo (Department of Mathematics and Computer Science, University of Ferrara); Michela Borghesi (Department of Economics and Management, University of Ferrara) |
| Abstract: | We contribute to the literature on the green, digital and twin transitions by providing novel evidence on their implications for industrial dynamics. In particular, we investigate whether the local supply of skills in the green, digital and twin domains is related to firm entry and exit at the NUTS3 level in Italy. We exploit a recently created dataset on the near-universe of Italian university programme descriptions to capture the skills provided through higher education. We find that the supply of green, digital and twin skills enhances opportunities for firm entry. We rule out the possibility that this effect simply reflects the supply of high-skilled labour in general. The supply of green skills may induce higher industrial renewal, being it also correlated with higher exit rates. |
| Keywords: | skill supply; university graduates; industrial dynamics; local economic performance |
| JEL: | O33 Q55 J24 R11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0726 |
| By: | Kemeny, Tom; Connor, Dylan Shane; Suss, Joel; Xie, Siqiao; Jang, Jiwon; Gu, Zhining |
| Abstract: | Despite extensive research on spatial inequality, the geography of wealth remains understudied. We develop a theoretical framework explaining why wealth's spatial distribution differs from income's and how local advantages create self-reinforcing dynamics. Using novel data tracking household net worth across 722 U.S. commuting zones from 1960-2020, we establish five stylized facts. Wealth is 60-70% more spatially concentrated than income, with patterns distinct from income and housing values. Post-1980 increases in between-place inequality reflect places changing positions rather than divergence. Within places, bottom 50% wealth shares declined nationwide. These patterns reveal feedback mechanisms compounding spatial advantages, highlighting welfare disparities exceeding income-focused research. |
| Date: | 2026–02–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:r4sg9_v1 |
| By: | Claude Diebolt (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Michael Haupert (UW-La Crosse - University of Wisconsin-La Crosse) |
| Keywords: | R58, R11, O18, N90, N10 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05511261 |
| By: | Dionissi Aliprantis; Jeffrey Lin |
| Abstract: | This paper explores how spatial spillovers define neighborhoods and drive neighborhood change through a stylized computable equilibrium model of income-based residential sorting. We find three main results. First, stronger spillovers create larger, more distinct neighborhood clusters even when the spatial scope of externalities is small. Second, spillovers make neighborhoods resistant to small change but also susceptible to rapid shifts between equilibrium states. Third, stronger spillovers concentrate change at cluster boundaries and isolated locations rather than neighborhood interiors. Extending Schelling-like insights to income sorting dynamics, the model treats neighborhood shape as an endogenous outcome determined by decentralized household location choices mediated through housing markets. The framework helps explain persistent urban segregation patterns, neighborhood resilience, and the geography of neighborhood change, offering new approaches for linking spatial spillovers to urban spatial structure and dynamics. |
| Keywords: | Neighborhood dynamics; neighborhood formation; spatial externalities; income sorting; residential segregation; neighborhood morphology |
| JEL: | R23 C61 D62 |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:102819 |
| By: | Christian Düben; Roland Hodler; Paul A. Raschky |
| Abstract: | Hodler and Raschky (2014) provide evidence for regional favoritism by documenting that subnational regions have more intense nighttime lights when they are the birth region of the country's current political leader than at other times. In this paper, we test the robustness of their findings using new data on nighttime light emissions and the birthplaces of political leaders, resulting in a larger sample with many more countries and years. We confirm that leader birth regions have more intense nighttime lights and that this effect is larger in countries with high ethnic fractionalization, undemocratic institutions, and low levels of education. |
| Keywords: | regional favoritism, nighttime light emissions, political leaders |
| JEL: | D72 R11 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12506 |
| By: | Sergey K. Nigai |
| Abstract: | This paper develops a tractable framework in which heterogeneity, captured by the distribution of agent characteristics within an alternative (sector, location, or occupation), emerges endogenously in equilibrium through selection rather than being imposed exogenously. I show that widely used extreme-value and power-law distributions arise as conditional outcomes of payoff-based discrete choice with multivariate shocks. The framework delivers a one-to-one mapping between equilibrium allocation shares and within-alternative heterogeneity. Because distributions are equilibrium objects, they respond to counterfactual shocks, introducing adjustment margins absent from standard models and generating richer responses, as shown in applications to trade, economic geography, and occupational sorting. |
| Keywords: | endogenous distributions, endogenous heterogeneity, international trade, fréchet distribution, dagum distribution, heavy-tailed distributions, economic geography, selection |
| JEL: | F10 F20 R12 C6 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12461 |
| By: | Paulo César Morceiro (Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS-USP). South African Research Chair in Industrial Development (SARChI-ID), University of Johannesburg); Milene Simone Tessarin (Joint Research Centre (JRC), European Commission) |
| Abstract: | Avaliamos empiricamente o processo de desconcentração espacial da indústria de transformação brasileira nas últimas quatro décadas com dados de emprego. Documentamos uma expressiva desconcentração industrial, com perdas concentradas nos estados de São Paulo e Rio de Janeiro e ganhos em diversos estados de todas as macrorregiões. A desconcentração foi setorialmente abrangente e mais intensa nas indústrias de maior intensidade tecnológica. Vários estados diversificaram seus portfólios produtivos, reduzindo a heterogeneidade industrial regional, sobretudo no Sul e Sudeste. Concluímos que a desconcentração operou sob uma lógica “Robin Hood”: poucas cidades perderam fatias expressivas de mercado, enquanto os ganhos foram modestos e pulverizados em milhares de municípios. O processo resultou mais na destruição de bases industriais consolidadas do que na criação de novos polos regionais relevantes. A pulverização gera consequências negativas para os polos regionais e para a competitividade nacional em termos de economias de escala e de aglomeração. Embora a desigualdade inter-regional tenha diminuído, a desconcentração “Robin Hood” no contexto de desindustrialização impôs limites ao crescimento econômico. Nossas evidências oferecem importantes implicações para as políticas públicas de desenvolvimento industrial e regional. |
| Keywords: | desenvolvimento regional; desconcentração industrial; distribuição regional do emprego; heterogeneidade regional; setores industriais; economia brasileira |
| JEL: | R12 O14 L6 R58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:022361 |