|
on Economic Geography |
|
Issue of 2026–06–22
eleven papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Yuqi Ma; Zhaoyingzi Dong; Pierre-Alexandre Balland; Hantian Sheng |
| Abstract: | Public procurement of innovation (PPI) is widely regarded as a powerful demand-side policy instrument to stimulate innovation, but its role in shaping regional technological diversification remains unclear. Drawing on evolutionary economic geography, this study examines how PPI affects technological diversification under different spatial sourcing strategies. Using 2.24 million procurement contracts and 2.41 million patents from China (2016-2021), we find that PPI facilitates path-breaking diversification, but mainly through non-local procurement. Compared with local procurement, non-local procurement is more conducive to path-breaking diversification in purchasing regions, while its benefits do not spill over symmetrically to supplying regions. By reconceptualizing PPI as a spatially embedded and relational mechanism, this study extends evolutionary accounts of regional diversification beyond a purely territorial lens and highlights how the spatial organization of public demand shapes uneven opportunities for regional technological development. |
| Keywords: | Public procurement of innovation; Technological diversification; Path-breaking innovation; Non-local procurement; Evolutionary economic geography |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2609 |
| By: | Tibor Szendrei; Arnab Bhattacharjee; Adrian Pabst; Eliza da Silva Gomes |
| Abstract: | This paper introduces a novel approach to constructing multi‐dimensional regional growth and development indices using dynamic factor models designed for big data contexts. Focusing on the UK's regional variations in pay, employment, and productivity, the model integrates spatial and temporal dynamics, allowing for more precise analysis of regional inequalities. By employing structural dynamic factor models, the proposed methodology not only tracks regional progress but also links policy‐driven interventions to economic outcomes. Applied to the UK's 'Levelling Up' agenda, the indices highlight significant disparities, with regions like North Eastern Scotland showing marked improvements, while others, such as Inner London‐West, face stagnation. This study offers a powerful tool for policymakers to measure and understand the drivers of regional growth, providing actionable insights for addressing persistent economic inequalities. |
| Keywords: | Dynamic Factor Models, Spatial Econometrics, UK Levelling up |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:nsr:niesrd:578 |
| By: | Mori, Tomoya |
| Abstract: | Hoshi (2026) argues that population decline accounts for only a small share of Japan's slowdown; that Tokyo's overconcentration reflects declining gross mobility, not increased one-way migration; that women's low gross migration reflects ``relative immobility''; that declining mobility is a greater demographic challenge than population decline; and that the challenge is therefore more institutional than demographic. Each of these readings inverts on closer examination. Growth accounting treats population and productivity as independent, ignoring the channels through which demographic decline shapes productivity: structural transformation, reallocation, and agglomeration. Net concentration in the Tokyo Metropolitan Area has accelerated since 2010; per-capita migration rates have risen across all age groups, the gross-volume decline reflecting the shrinking young cohort. Women flow into Tokyo more strongly than men, stay longer once there, and leave non-metropolitan regions more strongly: directional, not relative, immobility. Hoshi's prescriptions---raise mobility, abandon regional retention, focus on productivity---amount to describing a healthier Japan rather than curing the present one---a description unimpeachable as advice but silent on why Japan is where it is, or how to move it elsewhere. |
| Keywords: | Demographic decline; Internal migration; Tokyo concentration; Gender migration; Agglomeration; Growth accounting |
| JEL: | J11 J61 O47 R11 R23 |
| Date: | 2026–04–26 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128962 |
| By: | Marina Toger; Umut T\"urk; John \"Osth; Manfred M. Fischer |
| Abstract: | This paper examines the sociodemographic and socioeconomic determinants of regional commuter mobility in the Greater Stockholm Area using a heteroscedastic spatial Durbin panel data model estimated via Bayesian Markov Chain Monte Carlo methods. Drawing on mobile phone-derived origin-destination flows from the MIND database, the analysis exploits unusually fine spatial and temporal granularity across a balanced panel of 675 regions over the period 2018-2023. A k-nearest neighbor spatial weight matrix (k = 18), selected via Bayesian model comparison, captures the topological structure of interregional connectivity. By modeling spatial lags in both the dependent and independent variables, the framework enables explicit recovery of direct (own-region) and indirect (spillover) effects from scalar summary measures of the matrix of partial derivatives -- providing robust posterior inference on how sociodemographic and socioeconomic conditions propagate through space. This approach addresses a key limitation of conventional non-spatial methods, which risk producing biased estimates by ignoring spatial interdependence. Empirical results confirm that spatial spillovers predominate over direct effects, with educational attainment and car ownership emerging as the principal determinants of commuter mobility, while age composition plays a comparatively modest role. These findings underscore that evaluating direct effects in isolation systematically underestimates the broader societal returns to mobility-enhancing regional policies. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.22877 |
| By: | Baumann, Ursel; Faia, Ester; Ferrando, Annalisa; Rariga, Judit; Cullen, Zoe; Perez-Truglia, Ricardo |
| Abstract: | How well does innovation diffuse across geographic boundaries? To shed light on this question, we present a large-scale field experiment involving 3, 300 firms across twelve European Union countries. We elicit firms’ perceptions of the share of similar firms in their own country that had invested in artificial intelligence (AI), as well as the corresponding share among similar firms in Germany, France, and Italy. We randomly provide half of the sample with accurate information about both domestic and foreign AI investment. We show that firms substantially underestimate competitors’ current AI investment, both domestically and abroad, and that they update their expectations about competitors’ future AI investment in response to the information treatment. The treatment also causes a statistically significant increase in firms’ own expected AI investment rate. We find strong strategic complementarities within borders: a 1 pp increase in the expected share of domestic peers investing in AI raises a firm’s own expected AI investment rate by 0.570 pp. These complementarities are absent across borders: the effect of an increase in the expected share of foreign peers investing in AI on a firm’s own expected AI investment rate is statistically insignificant. Overall, our evidence shows that innovation diffusion and strategic complementarities in AI investment are much stronger domestically than internationally. JEL Classification: O33, D22, C93, L21 |
| Keywords: | artificial intelligence, field experiment, innovation diffusion, survey data |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263246 |
| By: | Pierluigi Murro; Valentina Peruzzi |
| Abstract: | This paper examines whether judicial enforcement shapes firms' participation in global value chains (GVCs). Exploiting Italy's 2013 court reorganization as a natural experiment, we combine firm-level survey data with administrative records and implement a spatial discontinuity IV design. We find that longer trials significantly reduce the probability of GVC participation: even delays of just a few weeks in civil proceedings translate into sizeable declines, underscoring the economic value of timely enforcement. The effect is concentrated among downstream firms and in trade with advanced markets, and operates through external finance, product complexity, and firm opacity. |
| Keywords: | Global value chains, Judicial enforcement, Regional development, Product complexity |
| JEL: | F10 F61 K41 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ter:wpaper:00190 |
| By: | Johannes Wachs; Xiangnan Feng; Simone Daniotti; Frank Neffke |
| Abstract: | With the rise of new industries, often new jobs emerge. Evolutionary Economic Geography and in particular Industry Life Cycle perspectives predict that these activities first emerge in a limited number of cities to then diffuse to other locations as job descriptions become more standardized. Here, we focus on a particularly important new industry: software development, an activity that is economically important, quickly changing, and has a pronounced spatial concentration in a small number of global IT hubs. We use an online database of over 60 million questions and answers about problems in software development that yields a longitudinal dataset of 237 software skills. By geo-locating 3 million posting users at regular intervals, we link these skills to cities worldwide. We find that, in spite of its digital nature, the software industry exhibits similar spatial regularities as previously observed in more traditional sectors. First, cities diversify into skills that are related to their existing ones. Second, new skills first emerge in cities with large and diversified software sectors, and later diffuse -- mostly unhindered by geographical distance -- to smaller cities specialized in closely related skills. We find suggestive but limited support for a windows of locational opportunity account: although even brand-new skills still emerge first in cities with strong prior specialization in related skills, concentrations of related activities impact less the emergence of new skills than the diffusion of existing ones. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.09463 |
| By: | José Pedro Pontes |
| Abstract: | This paper seeks to provide a reasonable explanation for why private colleges display a much higher elasticity of schooling rates with respect to population density than public universities. It also accounts for the fact that, although private universities played an important role in the early stages of the expansion of higher education in Portugal, their relative weight declined considerably in more recent times. While the higher level of subsidisation of fixed costs in public universities is undoubtedly an important factor behind this pattern, but it is far from the only one. Public universities also tend to internalise spatial knowledge externalities, a behaviour that private institutions do not typically replicate. Consequently, schooling rates in private universities are consistently lower than those in public institutions and this gap narrows as regional accessibility and demographic density increase. Moreover, the evolution of higher education exhibits rising spatial inequalities at earlier stages and diminishing inequalities at later stages. |
| Keywords: | Higher Education Growth, Population Density, Spatial Inequalities in Schooling, Knowledge Spillovers, Public and Private Universities. |
| JEL: | I20 O15 O18 R11 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04182026 |
| By: | Pierre Le Brun (TELEMME - Temps, espaces, langages Europe méridionale-Méditerranée - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, ESPACE - Études des Structures, des Processus d’Adaptation et des Changements de l’Espace - UNS - Université Nice Sophia Antipolis (1965 - 2019) - AU - Avignon Université - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, AU - Avignon Université); Sara Özoğul (University of Groningen [Groningen]); Sarah L Mawhorter (University of Groningen [Groningen]) |
| Abstract: | Fiscal geography illuminates the uneven ramifications of taxation policies on urban and regional development. In terms of housing governance, however, there remains a notable gap in examining how the spatial selectivity of taxation plays out across scales. This article highlights the interconnection between national regulation, housing market dynamics, and local governance systems. It examines how property development and local regulation have adapted to changes following the 2018 Finance Act in France, through which tax incentives for household rental investment were withdrawn from 1, 167 municipalities. We compare the metropolitan regions of Angers and Clermont-Ferrand, two French medium-sized cities. Detailed quantitative analysis shows that the 2018 Finance Act was followed by an increase in property development and prices in eligible municipalities, and a fall or stagnation in those losing eligibility. However, the regions' distinct local-level governance systems, uncovered through policy analysis and 15 interviews with public and private stakeholders, exhibit varying responses to these shifts. We argue that these differences are linked to local political strategies and can influence property development dynamics. The entrepreneurial, pro-development urbanism of Angers adapted through incentive tools aligned with national tax subsidies. In contrast, Clermont-Ferrand's more socially protective managerial urbanism responded by reinforcing regulatory constraints on development. We conclude by highlighting the importance of a multi-scalar perspective in fiscal geography for connecting taxation policies, housing markets, and local governance systems. |
| Keywords: | subsidized housing, housing regulation, property development, local governance, taxes, fiscal geography |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05628919 |
| By: | José Pedro Pontes |
| Abstract: | We undertake a theoretical analysis of the spread of college education and economic growth, leading to three main findings. First, by assuming that schooling is related with a productive activity that is not land-based, we draw the boundary of areas with formal education. We conclude that these areas expand when either population increases in each point or when technical progress primarily a??ects the modern productive sector. Second, we characterise the evolution of schooling in a structurally stable economy and its impact on growth in a manner consistent with the empirical evidence. In particular, we find that the expansion of schooling in a structurally stable spatial economy promotes economic growth, albeit at a diminishing rate. Finally, we provide a plausible explanation the apparent paradox of “education without economic development”, which arises when the positive e??ect of a rapidly growing labour force on the education system is partially o??set by a technological regression in the industrial sector. |
| Keywords: | Education spread, economic growth, population density, education without development, space-time analysis. |
| JEL: | R11 I20 O15 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04172026 |
| By: | Tomoki Ishikura |
| Abstract: | The damage to transportation infrastructure caused by disasters can indirectly lead to economic damage through economic interdependence, even in areas that are not directly affected. However, even when transportation routes are interrupted by a disaster, the damage can be mitigated if alternative routes are secured. Rural areas with low-density transportation networks are more vulnerable to traffic disruptions in a disaster. This study develops a method for evaluating the effectiveness of redundant transportation networks in mitigating economic vulnerability in the event of a disaster. Our methodology combines inter-regional road network connectivity with a spatial computable general equilibrium (SCGE) model. We apply the method to road disruption scenarios in the Chugoku region of Japan, which has a system of parallel highways. The affected areas are in close geographical proximity to many rural areas and have strong economic interdependencies with them. Several counterfactual simulations depicted the situation without the alternative road and the disaster. We evaluate the transportation impacts, measured by changes in travel time, and the economic impacts, measured by negative benefits, respectively. The results suggest that the economic vulnerability reduction effect is more far-reaching than the transportation impacts. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.00614 |