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on Economic Geography |
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Issue of 2025–11–10
thirteen papers chosen by Andreas Koch, Institut für Angewandte Wirtschaftsforschung |
| By: | Luisa Alama (Universitat Jaume I and IIDL); Joan Crespo (Universitat de València); Miguel A. Márquez (Universidad de Extremadura); Emili Tortosa-Ausina (Universitat Jaume I, IIDL and Ivie) |
| Abstract: | We empirically evaluate how the efficiency of Spanish public universities impacts regional economic performance in Spain during the period 2010–2019. Efficiency is measured using activity analysis methods that attempt to capture reflect how universities perform in their respective missions— namely, teaching, research, and knowledge transfer. We analyse the geography of higher education by examining efficiency at the provincial (NUTS3) and regional (NUTS2) levels, as well as for groups of regions (NUTS1). Our results offer several key insights. First, we find that geography plays a differential role primarily when knowledge transfer activities are considered, while geographical patterns are similar for teaching and research activities. Second, the impact of universities’ efficiency on regional economic activity varies across different outcome measures. While provinces with more efficient public university systems show higher labor productivity and capital intensity levels, there is no significant relationship with per capita income. The spatial analysis indicates that efficiency gains generate indirect and positive spillovers, particularly for capital intensity, suggesting that improvements in university performance can benefit broader regional areas. Additionally, institutional quality, measured through regional government performance indicators, reinforces these effects. Our findings suggest that policies aimed at enhancing university efficiency should prioritise the research mission. Among the three university missions, research has the greatest impact on improving productive processes and is the most effective in fostering regional economic development. |
| Keywords: | bias-corrected efficiency; capital intensity; higher education institutions; regional growth; productivity |
| JEL: | C61 J24 R11 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2510 |
| By: | Filkoski, Vasil; Tevdovski, Dragan |
| Abstract: | We develop a methodology that leverages open-source geospatial data on fuel station infrastructure and related services to construct the Gas Station Index (GSI), a novel indicator that augments official and alternative measures of regional economic development. Gas stations serve as consumer-facing infrastructure nodes, and their density and quality reflect local demand, purchasing power, and mobility. Using data on 19, 033 stations across 62 regions in nine European countries, the GSI explains 64% of the cross-regional variation in GDP per capita - a notable result for a single-variable indicator. Beyond its statistical fit, the GSI uncovers meaningful economic patterns. It reflects diminishing returns to infrastructure, consistent with core economic theory; it maps spatial inequality both visually and statistically, highlighting clusters of prosperity in capitals, port cities, transit corridors, and tourist destinations; and it classifies regional development typologies through bivariate LISA analysis. The unexplained variation underscores the structural differences between infrastructure-based indicator and GDP per capita, driven by sectoral specialization, mobility patterns, and informal economic activity. The GSI should therefore be viewed not as a substitute for national accounts, but as a complementary indicator particularly relevant at the subnational level. Compared to existing indicators, it offers distinct advantages: GDP per capita is delayed and masks heterogeneity, while night-time lights suffer from saturation and rural undercoverage. By contrast, the GSI provides a ground-level, behaviorally grounded, and real-time measure of economic development. By capturing both infrastructure and consumption dynamics, it complements—and in certain respects surpasses—conventional indicators in tracing regional growth trajectories and spatial inequality. |
| Keywords: | regional income, regional inequality, economic development measurement, infrastructure, geospatial data, nowcasting. |
| JEL: | C43 C55 E01 O18 O47 R12 |
| Date: | 2025–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126108 |
| By: | Wang, Han; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines whether and how government-led institutional changes can reshape regional industrial development trajectories. Using quarterly panel data from Chinese cities between 2019 and 2024, we assess the impact of reforms of the business environment on firm creation within both path creation and path dependent industries. Applying a staggered difference-in-differences approach combined with coarsened exact matching, our findings reveal that business environment reforms significantly increase firm creation in path creation industries, especially in high-tech sectors and cities with initially weaker business environments. Key mechanisms identified include enhancements in the market environment and government services, which are central to driving these effects. |
| Keywords: | path creation; institutional change; business environment; path dependence; firm creation |
| JEL: | O11 R11 R12 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129990 |
| By: | Ron Boschma; Koen Frenken |
| Abstract: | With its focus on innovation, institutions have remain under-theorized in evolutionary economics. This paper aims to contribute to Nelson’s institutional agenda within evolutionary economics in two ways. First, we discuss the core concepts of organizational routines and natural trajectories from an institutional perspective. Second, we pick up on Nelson's co-evolutionary model linking technology, markets and institutions in economic development, and introduce the notion of ‘institutional relatedness’ to understand how institutions both constrain and enable economic development and structural change as well as how institutions channel the direction of institutional change itself. |
| Keywords: | Nelson; evolutionary economics; evolutionary economic geography; institutional relatedness; institutional change; regional diversification |
| JEL: | B15 B52 O18 O33 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2532 |
| By: | Aipoh, Godwin; Yusuff, Olanrewaju |
| Abstract: | This paper examines the causal impact of higher education expansion on regional labor markets and human capital development. Exploiting the 2011 establishment of nine federal universities across previously underserved Nigerian states, we implement a difference-in-differences approach to analyze effects on employment, wages, job quality, and sectoral composition. Our results show significant positive effects on employment and wages, with particularly strong impacts for youth and in urban areas. We find evidence of both direct employment effects and broader spillovers to private sector activity such as self-employment, suggesting universities can serve as catalysts for regional economic development. Our findings contribute to understanding the role of higher education institutions in human capital formation and labor market development in emerging economies |
| Keywords: | Higher Education, Labor Markets, Economic Development, Regional Growth, Universities, Employment, Wages, Nigeria, Africa |
| JEL: | H5 H52 I25 J21 O15 R11 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126532 |
| By: | Giorgio Chiovelli; Stelios Michalopoulus; Elias Papaioannou; Tanner Regan |
| Abstract: | Satellite images of nighttime lights are commonly used to proxy local economic conditions. Despite their popularity, there are concerns about how accurately they capture local development in different settings and scales. We compile an annual series of comparable nighttime lights globally from 1992 to 2023 by applying adjustments that consider key factors affecting accuracy and comparability over time: top coding, blooming, and variations in satellite systems (DMSP and VIIRS). Applied to various low-income settings, the adjusted luminosity series outperforms the unadjusted series as a predictor of local development, particularly over time and at higher spatial resolutions. |
| Keywords: | Night Lights; Economic Development; Measurement; Africa. |
| JEL: | O1 R1 E01 I32 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:gwc:wpaper:2025-009 |
| By: | Berliant, Marcus; Watanabe, Axel |
| Abstract: | This article demonstrates the emergence of agglomeration unaccompanied by conventional drivers such as scale economies, externalities or comparative advantages. We construct a two-region general equilibrium model with four types of households; there are four commodities and the same linear production functions in each region. Households migrate in search of commodities they lack in their endowment. A type sorts disassortatively toward another type who holds such commodities, resulting in intense agglomerations of diverse types. In contrast, a type sorts assortatively away from another type when they compete for endowments that cannot be transported or produced, resulting in moderate agglomerations dominated by selected types. We identify type complementarity and endowment portability as the primary causative factors behind spatial sorting and the resultant equilibrium agglomeration. |
| Keywords: | Agglomeration; general equilibrium; spatial sorting |
| JEL: | R13 |
| Date: | 2025–08–29 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125958 |
| By: | Deborah Gefang; Stephen G Hall; George S. Tavlas |
| Abstract: | We develop a new Bayesian approach to estimating panel spatial autoregressive models with a known number of latent common factors, where N, the number of cross-sectional units, is much larger than T, the number of time periods. Without imposing any a priori structures on the spatial linkages between variables, we let the data speak for themselves. Extensive Monte Carlo studies show that our method is super-fast and our estimated spatial weights matrices and common factors strongly resemble their true counterparts. As an illustration, we examine the spatial interdependence of regional gross value added (GVA) growth rates across the European Union (EU). In addition to revealing the clear presence of predominant country-level clusters, our results indicate that only a small portion of the variation in the data is explained by the latent shocks that are uncorrelated with the explanatory variables. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.22399 |
| By: | Rongjun Ao; Ling Zhong; Jing Chen; Xiaojing Li; Xiaoqi Zhou |
| Abstract: | While prior research has emphasized the path-dependent nature of occupational systems, it has paid limited attention to how local industrial structures contribute to occupational change. To address this gap, this study examines how regional occupational evolution is shaped by two distinct mechanisms: (1) path-dependent skill and knowledge transfer, whereby new occupations emerge through the recombination of existing occupational structures; and (2) industry-driven task reconfiguration, through which industrial upgrading reshapes the demand for occupations. To operationalize these dynamics, the concept of industry–occupation cross-relatedness is introduced, capturing the proximity between new occupations and a region’s existing industrial portfolio. Drawing on panel data from 241 Chinese cities between 2000 and 2015, the study estimates the effects of both occupational relatedness and cross-relatedness on new occupation specialization. The results reveal that both mechanisms significantly promote occupational evolution, yet they tend to function as substitutes rather than complements. Furthermore, their effects differ across skill levels: high-skilled occupations are more responsive to industrial transformation, low-skilled occupations to occupational pathways, while medium-skilled occupations exhibit relatively weak responsiveness to both. These findings underscore the importance of structural conditions and skill heterogeneity in shaping regional patterns of occupational change. |
| Keywords: | Occupational Evolution; Path Dependence; Chinese Cities; Industry-Occupation Cross-Relatedness; Skill Heterogeneity |
| JEL: | R11 O14 N95 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2533 |
| By: | Stuhler, Jan (Universidad Carlos III de Madrid); Dustmann, Christian (University College London); Otten, Sebastian (RWI); Schönberg, Uta (University College London) |
| Abstract: | Most studies on the labor market effects of immigration use repeated cross-sectional data to estimate the effects of immigration on regions. This paper shows that such regional effects are composites of effects that address fundamental questions in the immigration debate but remain unidentified with repeated cross-sectional data. We provide a unifying empirical framework that decomposes the regional effects of immigration into their underlying components and show how these are identifiable from data that track workers over time. Our empirical application illustrates that such analysis yields a far more informative picture of immigration’s effects on wages, employment, and occupational upgrading. |
| Keywords: | elasticity, upgrading, employment effects, wage effects, immigration, selection, identification |
| JEL: | J21 J23 J31 J61 R23 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18229 |
| By: | Precetti, Josephine |
| Abstract: | France’s railway expansion following the Law of 11 June 1842 significantly reshaped nationwide connectivity and economic opportunities. This dissertation investigates the causal impacts of railway access between 1846 and 1861 on city-level industrial development. Using a dataset combining industrial surveys with digitized railway records, it employs a robust Difference-in-Differences approach, leveraging the quasi-exogenous roll-out of the centrally planned ‘étoile de Legrand’ railway network. Empirical results show railway access increased industrial activity primarily extensively: railway-connected cities saw approximately a 20% rise in the number of factories and workers, especially in labour-intensive sectors like textile in Lille and ceramics in Limoges. Yet, intensive effects such as factory size, productivity, and wages remained statistically and economically negligible. Contrary to theoretical predictions from trade and New Economic Geography models, capital-intensive sectors, such as metallurgy in Lorraine, did not exhibit statistically significant responsiveness. These findings reframe the role of transport infrastructure from being a deterministic catalyst to being better understood as a conditional enabler. While railways expanded market potential, their short to medium term transformative impact critically depended on complementary institutional frameworks notably financial markets and property rights, technological readiness, and regional contexts. Acknowledging the historical data limitations, this study underscores that transport infrastructure alone is insufficient for structural economic upgrading without the appropriate institutional, technological, and human capital conditions in place at the right time. |
| JEL: | N73 R40 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129951 |
| By: | Tatsuru Kikuchi |
| Abstract: | This paper develops a dual-channel framework for analyzing technology diffusion that integrates spatial decay mechanisms from continuous functional analysis with network contagion dynamics from spectral graph theory. Building on our previous studies, which establish Navier-Stokes-based approaches to spatial treatment effects and financial network fragility, we demonstrate that technology adoption spreads simultaneously through both geographic proximity and supply chain connections. Using comprehensive data on six technologies adopted by 500 firms over 2010-2023, we document three key findings. First, technology adoption exhibits strong exponential geographic decay with spatial decay rate $\kappa \approx 0.043$ per kilometer, implying a spatial boundary of $d^* \approx 69$ kilometers beyond which spillovers are negligible (R-squared = 0.99). Second, supply chain connections create technology-specific networks whose algebraic connectivity ($\lambda_2$) increases 300-380 percent as adoption spreads, with correlation between $\lambda_2$ and adoption exceeding 0.95 across all technologies. Third, traditional difference-in-differences methods that ignore spatial and network structure exhibit 61 percent bias in estimated treatment effects. An event study around COVID-19 reveals that network fragility increased 24.5 percent post-shock, amplifying treatment effects through supply chain spillovers in a manner analogous to financial contagion documented in our recent study. Our framework provides micro-foundations for technology policy: interventions have spatial reach of 69 kilometers and network amplification factor of 10.8, requiring coordinated geographic and supply chain targeting for optimal effectiveness. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.24781 |
| By: | Bergantino, Angela S.; Clemente, Antonello; Iandolo, Stefano; Turati, Riccardo |
| Abstract: | This paper examines the evolution and determinants of skill-specific internal mobility among Italian citizens by urban-rural origin. Using administrative data from the Registry of Transfer of Residence (ADELE), which records the universe of skill-specific bilateral moves across more than 700 millions potential municipality pairs between 2012 and 2022, we document distinct trends in residential mobility for college-educated and non-college-educated citizens. We then assess the role of economic and non-economic factors in shaping these flows, employing a Poisson Pseudo-Maximum Likelihood (PPML) estimator with an extensive set of destination and origin-by-nest fixed effects. Our findings show that low-skilled movers respond more strongly to economic factors, while high-skilled movers are respond more to non-economic ones, with the urban-rural divide at origin amplifying these differences. Moreover, we find that after the COVID-19 pandemic, economic drivers became less relevant, whereas non-economic factors gained importance. Overall, this study highlights that, similar to international migration, the drivers of internal mobility are inherently skill-specific. |
| Keywords: | Migration, Human Capital, Urban-Rural, Italy, COVID-19 |
| JEL: | J24 J61 R23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1685 |