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on Economic Geography |
| By: | D’Alessandro, Francesco (Department of Sociology and Business Law, University of Bologna); Santarelli, Enrico (Department of Economics, University of Bologna); Vivarelli, Marco (Università Cattolica del Sacro Cuore) |
| Abstract: | This study examines how regional technological relatedness and local AI knowledge influence regional innovative activity, as measured by patenting activity. Using a novel three-way longitudinal dataset and leveraging a deep learning-based identification of AI patents, we show that two broad mechanisms operate in parallel. First, in accordance with the extant literature, technologies that are cognitively close to a region’s existing patent portfolio enjoy higher patenting activity, confirming that relatedness remains a strong and persistent predictor of innovative output. Second, local AI endowments are positively associated with patenting across technological fields, even after conditioning on relatedness, indicating that AI plays an enabling and cross-cutting role in a given regional innovation system. Moreover, the interaction between relatedness and AI turns out to be negative and statistically significant, implying that AI attenuates the extent to which local innovative efforts depend on the technology’s proximity to the regional portfolio. In sum, AI appears to enhance overall local innovative activity while reducing its reliance on pre-existing regional knowledge structures. |
| Keywords: | Artificial Intelligence, AI, technological change, regional innovation, relatedness |
| JEL: | O31 R11 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18817 |
| By: | Bohr, Clement; Mestieri, Marti; Robert-Nicoud, Frédéric |
| Abstract: | As countries develop, the relative importance of agriculture declines and economic activity becomes spatially concentrated. We develop a parsimonious model integrating structural change and regional disparities to jointly capture these phenomena. A key modeling innovation that ensures analytical tractability is the introduction of non-homothetic Cobb-Douglas preferences, which are characterized by constant unitary elasticity of substitution and non-constant income elasticity. As labor productivity increases over time, economic well-being rises, leading to a declining expenditure share on agricultural goods. Labor reallocates away from agriculture, and industry concentrates spatially, which further increases aggregate productivity: structural change and regional disparities are two mutually reinforcing outcomes and propagators of the growth process. |
| JEL: | D11 F11 O40 R10 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19766 |
| By: | Redding, Stephen |
| Abstract: | This paper reviews recent quantitative urban models. These models are sufficiently rich to capture observed features of the data, such as many asymmetric locations and a rich geography of the transport network. Yet these models remain sufficiently tractable as to permit an analytical characterization of their theoretical properties. With only a small number of structural parameters (elasticities) to be estimated, they lend themselves to transparent identification. As they rationalize the observed spatial distribution of economic activity within cities, they can be used to undertake counterfactuals for the impact of empirically-realistic public-policy interventions on this observed distribution. Empirical applications include estimating the strength of agglomeration economies and evaluating the impact of transport infrastructure improvements (e.g., railroads, roads, Rapid Bus Transit Systems), zoning and land use regulations, place-based policies, and new technologies such as remote working. |
| JEL: | R32 R41 R52 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19638 |
| By: | Muringani, Jonathan; Fitjar, Rune; Rodríguez-Pose, Andrés |
| Abstract: | This paper examines the complex relationship between political and social trust, government quality, and economic development across 208 regions in the European Union (EU). We use a pooled data generalized structural equation model (GSEM) to show that political trust serves as a fundamental driver of regional economic development in the EU. Political trust is, in turn, influenced by both social trust and government quality. Social trust and government quality have quadratic effects on political trust, showing diminishing returns, while the effect of political trust on economic development is linear. Political trust mediates the relationship between social trust and economic development entirely, while government quality retains a direct relationship with economic development. These findings underscore the fundamental role that political trust plays as a mechanism through which both formal and informal institutions shape regional development. |
| JEL: | O43 R11 H11 D73 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19622 |
| By: | Zhang, Min; Rodríguez-Pose, Andrés |
| Abstract: | Innovation is key for economic growth and well-being. The capacity for innovation, however, is profoundly influenced by the quality of local institutions. Although the impact of national institutions on innovation is well-documented, the effects of subnational institutional variations on innovation remain underexplored. This paper studies the impact of government agency reforms, designed to enhance local government effectiveness, on the innovation performance of city-regions in China. We examine the adoption of these reforms between 2009 and 2016 as an exogenous shock to regional institutions. Our analysis identifies a positive and significant relationship between improvements in institutional quality and the innovation performance of Chinese city-regions, particularly pronounced in regions with medium to high levels of innovation. The results are robust to a series of checks including placebo and endogeneity tests and potential confounding policies. This research highlights the critical role of government institutions in driving innovation across China, bringing to the fore important regional variations in the adoption of government agency reforms that are defining the country’s innovation landscape. |
| Keywords: | Institutions; China |
| JEL: | R11 O11 O43 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19583 |
| By: | Benos, Nikolaos (Department of Economics, University of Ioannina); Conti, Maurizio (University of Genoa); Papazoglou, Michail (European Centre for the Development of Vocational Training); Tsoumaris, Stamatis (Università degli Studi Guglielmo Marconi)) |
| Abstract: | We examine universities and urban growth in pre-industrial Europe using a panel of 2, 247 cities from 1000 to 1800 and a staggered difference-in-differences design. Under the maintained identifying assumptions, university establishment is associated with approximately 20 percent higher city population, but estimates are highly heterogeneous. Population gains are strongest in earlier centuries and weaken as universities diffuse, while after 1500 they are concentrated among high-quality universities and commercially connected cities, especially near Atlantic and North Sea trade routes. University establishment is also followed by improved local market access. Overall, universities matter most where academic quality and commercial opportunities are greatest. |
| Keywords: | universities, urban growth, upper-tail human capital, market access, pre-industrial Europe |
| JEL: | N33 O15 O18 R11 I23 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18781 |
| By: | Rodríguez-Pose, Andrés; Bartalucci, Federico; Lozano Gracia, Nancy; Dávalos, María |
| Abstract: | Territorial development theory and practice have witnessed significant change in recent times. This change has increasingly put the spatial dimension at the centre of development policies. Where agglomeration-focused policies derived from urbanization and agglomeration economics were once prominent, their empirical limitations have become increasingly apparent. Greater territorial polarization and pervasive left-behindedness has underscored the need for a more inclusive territorial development approach prompting increased interest in understanding and addressing regional disparities to ensure more equitable economic growth. This article synthesizes the growing interest in territorial development, which has driven to the adoption of what are increasingly place-based and place-sensitive approaches to development. The article also emphasises the need for complementarity between efficiency-driven and equity-focused interventions, while highlighting emerging topics in regional economics research, including the role of institutions, agency, and external megatrends such as the green transition. We conclude by advocating a place-sensitive approach that tailors policies to regional challenges, promoting economic potential, diversification, and inclusivity across all regions. |
| Keywords: | Q56 |
| JEL: | R11 O18 R58 Q56 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19623 |
| By: | Elass, Kenza; García-Peñalosa, Cecilia; Schluter, Christian |
| Abstract: | We examine the economic geography of gender wage gaps to understand the role that location plays in gender earning differences. Using panelised administrative data for the universe of French workers, our findings indicate that women benefit relatively more from density than men, with an urban wage premium (return to urban density) 48% higher than for men. We identify a number of factors that explain this gap, with a large share being explained by the structure of the local labour market, notably, the extent of occupational segregation. Another important factor is commuting patterns, while childcare availability plays only a moderate role. |
| Keywords: | Gender wage gap; Agglomeration economies |
| JEL: | J31 J16 R10 R23 R12 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:cpr:ceprdp:19592 |
| By: | Rauh, C. |
| Abstract: | This paper proposes a methodology to extract information about regional economic conditions from newspaper text in real time. The approach relies on large-scale collections of news articles that are summarized using unsupervised machine learning to generate topics capturing recurring themes in economic reporting. Because the method uses the full corpus of regional news and avoids restrictive keyword selection, it minimizes human judgment and allows the data to reveal economically relevant patterns in news coverage. I apply the methodology to Canada, a large and economically diverse country, and show that the resulting topics contain information about fluctuations in economic indicators such as manufacturing activity and unemployment at both the national and provincial levels. The results are robust to alternative choices of the number of topics. A composite index constructed from the topic measures provides a summary indicator of economic information contained in the news. While some topics display similar associations with economic outcomes across provinces, others capture region-specific developments, highlighting the ability of the approach to uncover geographically heterogeneous economic signals in news data. |
| Keywords: | Machine Learning, Latent Dirichlet Allocation, Newspaper Text, Economic Uncertainty, Topic Model, Canada |
| JEL: | D80 E66 C55 |
| Date: | 2026–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2657 |
| By: | Koop, Gary; McIntyre, Stuart; Mitchell, James; Poon, Aubrey; Wu, Ping |
| Abstract: | Bayesian mixed-frequency vector autoregressions (MF-VARs) are commonly used to produce timely and high-frequency estimates of low-frequency variables. A typical application uses quarterly data on output, for a given country, and monthly indicator data to produce monthly estimates of national output. But, when working at sub-national levels, data limitations preclude the use of standard MF-VARs. The frequency mismatch is more complicated, key variables can have missing data, and release delays can be substantial. In this paper, we develop a novel MF-VAR which addresses all these issues and use it to produce historical estimates of sub-regional output growth in the UK. The model combines information in the annual sub-regional data (when available) with data from the UK regions and the UK as a whole. The model is estimated using variational Bayesian methods with shrinkage priors, reflecting the “big data” setup. We use our model to produce a new database of quarterly estimates of sub-regional GVA growth back to the 1960s, that importantly, because the MFVAR imposes temporal and cross-sectional restrictions, is consistent with those official data that do exist. We illustrate the use of these new estimates by showing how they can used to characterize the considerable heterogeneity in sub-regional business cycle dynamics in the UK and contribute to our understanding of regional economic resilience. |
| Keywords: | regional resilience; vector autoregressions; mixed-frequency data; sub-national |
| JEL: | C32 R1 |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:eoe:escoed:escoe-dp-2024-11 |