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on Economic Geography |
| By: | Crabbé, Karen; De Bruyne, Karolien |
| Abstract: | The goal of this paper is to analyse the individual impact of tax rates and agglomeration rents as well as their interaction on location decisions of manufacturing firms within Belgium. Theoretically, both location determinants may weaken each other’s impact. Using a unique 10-year dataset concerning the number of newly setup firms at the sector level for 43 Belgian districts, we show that local effective tax rates have a negative impact on location decisions. Moreover, location-specific supply-side agglomeration rents attract new firms and their impact appears to be even stronger for more spatially concentrated sectors. Finally, we show that a higher effective tax rate in a district does not necessarily deter new firms in more agglomerated districts, pointing to the existence of taxable location-specific agglomeration rents. |
| Keywords: | Taxes; agglomeration rents; |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/413007&r=geo |
| By: | Wixe, Sofia (Centre for Entrepreneurship and Spatial Economics (CEnSE), Jönköping International Business School); Andersson, Martin (Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University) |
| Abstract: | This paper provides a conceptual discussion of relatedness, which suggests a focus on individuals as a complement to firms and industries. The empirical relevance of the main arguments are tested by estimating the effects of related and unrelated variety in education and occupation among employees, as well as in industries, on regional growth. We show that for regional productivity growth, occupational and educational related variety matter over and above industry relatedness. This supports the conceptual discussion put forward. The potential of productive interactions between employees in a region is greater when there is related variety in their ‘knowledge base’. We also find that related variety in industries is positive for employment growth but negative for productivity growth. |
| Keywords: | Relatedness; variety; occupation; education; regional growth |
| JEL: | J24 R12 R23 |
| Date: | 2013–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:cesisp:0332&r=geo |
| By: | Juan Alcácer (Harvard Business School, Strategy Unit); Minyuan Zhao (Ross School of Business – University of Michigan) |
| Abstract: | This paper takes a close look at the reasons, procedures, and results of cluster identification methods. Despite being a popular research topic in strategy, economics, and sociology, geographic clusters are often studied with little consideration given to the underlying economic activities, the unique cluster boundaries, or the appropriate benchmark of economic concentration. Our goal is to increase awareness of the complexities behind cluster identification, and to provide concrete insights and methodologies applicable to various empirical settings. The organic cluster identification methodology we propose is especially useful when researchers work in global settings, where data available at different geographic units complicates comparisons across countries. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:14-042&r=geo |
| By: | Riccardo Crescenzi; Max Nathan; Andrés Rodríguez-Pose |
| Abstract: | This paper investigates how physical, organisational, institutional, cognitive, social, and ethnic proximities between inventors shape their collaboration decisions. Using a new panel of UK inventors and a novel identification strategy, this paper systematically explores the net effects of all these ‘proximities’ on co-patenting. The regression analysis allows us to identify the full effects of each proximity, both on choice of collaborator and on the underlying decision to collaborate. The results show that physical proximity is an important influence on collaboration, but is mediated by organisational and ethnic factors. Over time, physical proximity increases in salience. For multiple inventors, geographic proximity is, however, much less important than organisational, social, and ethnic links. For inventors as a whole, proximities are fundamentally complementary, while for multiple inventors they are substitutes. |
| Keywords: | innovation, patents, proximities, regions, knowledge spillovers, collaboration, ethnicity, |
| JEL: | O31 O33 R11 R23 |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:egu:wpaper:1324&r=geo |
| By: | Chaminade , Cristina (CIRCLE, Lund University); Plechero , Monica (IRPPS-CNR, Italy and CIRCLE, Lund University, Sweden) |
| Abstract: | Abstract Access to global innovation networks (GINs) has been unequal across the regions of the world. While certain regions are considered knowledge hubs in GINs, others still remain marginalized; this points to the role of regional innovation systems in the emergence and development of GINs. Using firm-level data collected through a survey and case studies in 2009–2010, this article systematically compares the patterns of global networks in the ICT industry in a selection of European, Chinese and Indian regions. The results show that GINs are more common in regions which are not organizationally and institutionally thick, suggesting that GINs may be a compensatory mechanism for weaknesses in the regional innovation system. |
| Keywords: | globalization; innovation networks; regions; Europe; India; China |
| JEL: | O30 |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_032&r=geo |
| By: | Carbonara, Nunzia (CSIR, Blekinge Inst of Technology); Tavassoli, Sam (CSIR, Blekinge Inst of Technology) |
| Abstract: | This paper seeks to contribute to the ongoing debate concerning the role of heterogeneity for the innovative capability of industrial districts. With this aim, using a knowledge-based approach, the paper focuses on different sources of industrial district knowledge heterogeneity and studies how the different level of heterogeneity affects the innovative capability of industrial districts. Four theoretical hypotheses concerning the effects of knowledge and knowledge heterogeneity on the Industrial District innovativeness are formulated. To test the hypotheses, an econometric analysis on 32 Italian District Provinces is applied. Empirical results show that knowledge heterogeneity matter for increasing the innovative capability of industrial districts. |
| Keywords: | Industrial district; innovative capability; knowledge heterogeneity |
| JEL: | F14 O32 R12 |
| Date: | 2013–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bthcsi:2012-010&r=geo |
| By: | Andersson, Martin (CIRCLE, Lund University, Sweden and Blekinge Institute of Technology); Larsson , Johan P. (Centre for Entrepreneurship and Spatial Economics (CEnSE), Department of Economics, Finance and Statistics, Jönköping International Business School (JIBS), Jönköping) |
| Abstract: | Entrepreneurial activity is significantly predicted by the presence of other entrepreneurs in the residential neighborhood. One plausible source of such spatial clustering is local peer effects, where individuals’ decisions to become entrepreneurs are influenced by entrepreneurial neighbors. Using geo-coded matched employer-employee data for Sweden, we find that sharing residential neighborhood with established entrepreneurs has a statistically significant and robust influence on the probability than an individual leaves employment for entrepreneurship. An otherwise average neighborhood with a 5 percentage point higher entrepreneurial intensity all else equal produces between 7 and 8 more entrepreneurs per square kilometer, each year. Local peer effects appear as important in explaining local clusters of entrepreneurs, and imply a local feedback-effect in which the presence of established entrepreneurs in a neighborhood breeds new local entrepreneurs |
| Keywords: | entrepreneurship; clusters; peer effects; local social interactions; role models; neighborhood; social network externalities; path dependence |
| JEL: | J24 L26 R12 R23 |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lucirc:2013_030&r=geo |
| By: | Ksenia Gonchar (National Research University Higher School of Economics); Philipp Marek (Institute for Economic Studies – Halle) |
| Abstract: | This paper conducts an empirical study of the factors that affect the spatial distribution of foreign direct investment (FDI) across regions in Russia; in particular, this paper is concerned with those regions that are endowed with natural resources and market-related benefits. Our analysis employs data on Russian firms with a foreign investor during the 2000-2009 period and linked regional statistics in the conditional logit model. The main findings are threefold. First, we conclude that one theory alone is not able to explain the geographical pattern of foreign investments in Russia. A combination of determinants is at work; market-related factors and the availability of natural resources are important factors in attracting FDI. The relative importance of natural resources seems to grow over time, despite shocks associated with events such as the Yukos trial. Second, existing agglomeration economies encourage foreign investors by means of forces generated simultaneously by sector-specific and inter-sectoral externalities. Third, the findings imply that service-oriented FDI co-locates with extraction industries in resource-endowed regions. The results are robust when Moscow is excluded and for subsamples including only Greenfield investments or both Greenfield investments and mergers and acquisitions (M&A) |
| Keywords: | foreign direct investment, location, regional development |
| JEL: | F23 R11 Q34 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:26/ec/2013&r=geo |
| By: | Berliant, Marcus; Weiss, Adam |
| Abstract: | We examine econometric and elementary economic theory issues arising from the model specification in Henderson, Storeygard and Weil (2012), that uses night light data to proxy for missing or unreliable GDP growth data. An alternative approach based on the expenditure function is outlined. It can accommodate prices as well as quantity information from other commodity markets. |
| Keywords: | GDP; Night light data; Omitted variable; Expenditure function; Spatial autocorrelation |
| JEL: | D11 D61 O47 O57 |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:51713&r=geo |
| By: | Christian Schluter; Mark Trede |
| Abstract: | This paper is about the city size and growth rate distributions as seen from the perspectives of Zipf's and Gibrat's law. We demonstrate that the Gibrat and Zipf views are theoretically incompatible in view of the Fisher-Tippett theorem, and show that the conflicting hypotheses about the size distribution are testable in a coherent encompassing estimating framework based on a single index. We then show that the two views can be reconciled in a slightly modified but internally consistent statistical model: we connect economic activity and agglomeration in a model of Gibrat-like random growth of sectors, whose random number is linked to Zipf-like city size. The resulting average growth rate is a random mean, and we derive its invariant distribution. Our empirical analysis is based on a recent administrative panel of sizes for all cities in Germany. We find strong evidence for the prediction of the growth model, as well as for a weak version of Zipf's law characterising the right tail of the size distribution. |
| Keywords: | Zip's law, Gibrat's law, city size, urban growth |
| JEL: | R11 R12 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cqe:wpaper:2713&r=geo |
| By: | Cantner, Uwe; Günther, Jutta; Hassan, Sohaib Shahzad; Jindra, Björn |
| Abstract: | The location determinants of outward foreign direct investment (OFDI) have received extensive attention in contemporary literature, largely from the perspective of advanced economies. Less attention has been focused on OFDI from emerging economies. This applies, in particular, to Central and East European Countries (CEEC). Apart from traditional OFDI motives such as market-seeking, there is a growing debate regarding the relevance of knowledge-seeking as an investment motive for firms from catch-up economies. We apply a conditional-logit approach to assess OFDI location factors at the host country level for a sample of 1,036 firms from 10 CEEC that entered the EU between 1995 and 2010. We find that firms from CEEC primarily target economies characterized by high growth rates and geographic proximity, i.e., often other transition economies within the EU. The impact of market size increases significantly after EU accession, when more firms are located in advanced economies (EU15 countries). In terms of knowledge-seeking, we find that firms from CEEC seem to be primarily attracted by human capital endowment rather than by the R&D intensity of other EU economies. |
| Keywords: | Outward FDI, Conditional-logit, Location Choice, Transition Economies, Knowledge Seeking, CEEC |
| JEL: | F23 |
| Date: | 2013–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:51817&r=geo |
| By: | Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan |
| Abstract: | Hedmark County (Norway) and Dalarna County (Sweden) are both rural, with the border being remote from regional centres. The total population of less than half a million inhabitants spans across almost 58 800 km², with an economic output of USD 22 billion. Efforts to support collaboration at the border focus on the sector of tourism that both share, and which would be facilitated by the construction of one airport to serve both sides. As most science and technology-related assets are located far from the border, the region does not seem to have the relevant conditions for a broad cross-border regional innovation policy since urban centres are perhaps better served by looking towards other locations rather than this border. On the border, efforts for innovation in other forms, such as in marketing and organisational methods in tourism, are more relevant. This case study is part of the project Regions and Innovation: Collaborating Across Borders . A summary of this working paper appears in a report of the same name. |
| JEL: | L52 L53 O14 O18 O38 R11 R58 |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/18-en&r=geo |
| By: | Claire Nauwelaers; Karen Maguire; Giulia Ajmone Marsan |
| Abstract: | Estonia and Finland have centuries of collaboration, mainly between the capital areas of Tallinn and Helsinki that currently account for 2 million inhabitants and USD 76 billion in economic output. The entry of Estonia into the European Union and, since the mid-2000s, a two-hour ferry trip, have both facilitated flows of people and merchandise across the Gulf of Finland. The different levels of development between Helsinki and Tallinn result in many asymmetric flows (workers to Helsinki, tourists to Tallinn). Beyond infrastructure and labour market issues, there are interesting opportunities for joint innovation policy efforts given their shared strengths such as in ICT, a dynamic start-up environment and technologically sophisticated public services. Cross-border collaboration can help build an “entrepreneurial knowledge region” brand. This case study is part of the project Regions and Innovation: Collaborating Across Borders. A summary of this working paper appears in a report of the same name. |
| JEL: | L52 L53 O14 O18 O38 R11 R58 |
| Date: | 2013–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/19-en&r=geo |
| By: | Olaf Merk; Jing Li |
| Abstract: | This working paper offers an evaluation of the performance of the port of Hong Kong, an analysis of the impact of the port on the territory and an assessment of policies in this field. It examines port performance over the last decades and identifies the principal factors that have contributed to it. The effect of the port on economic and environmental questions is studied and quantified where possible. The major policies governing the port are assessed, along with policies governing transport and economic development, the environment and spatial planning. Based on the report’s findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the port of Hong Kong. |
| Keywords: | transportation, regional development, ports, regional growth, inter-regional trade, urban growth |
| JEL: | D57 L91 R11 R12 R15 R41 |
| Date: | 2013–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/16-en&r=geo |
| By: | Zhen Hong; Olaf Merk; Zhao Nan; Jing Li; Xu Mingying; Xie Wenqing; Du Xufeng; Wang Jinggai |
| Abstract: | This working paper offers an evaluation of the performance of the port of Shanghai, an analysis of the impact of the port on its territory and an assessment of policies in this field. It examines port performance over the last decades and identifies the principal factors that have contributed to it. The effect of the port on economic and environmental questions is studied and quantified where possible. The major policies governing the port are assessed, along with policies governing transport and economic development, the environment and spatial planning. Based on the report’s findings, recommendations are proposed with a view to improving port performance and increasing the positive effects of the port of Shanghai. |
| Keywords: | transportation, regional development, ports, regional growth, inter-regional trade, urban growth |
| JEL: | D57 L91 R11 R12 R15 R41 |
| Date: | 2013–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2013/23-en&r=geo |
| By: | Guy Michaels; Ferdinand Rauch |
| Abstract: | Do locational fundamentals such as coastlines and rivers determine town locations, or can historical events trap towns in unfavourable locations for centuries? We examine the effects on town locations of the collapse of the Western Roman Empire, which temporarily ended urbanization in Britain, but not in France. As urbanization recovered, medieval towns were more often found in Roman-era town locations in France than in Britain, and this difference still persists today. The resetting of Britain's urban network gave it better access to naturally navigable waterways when this was important, while many French towns remained without such access. |
| Keywords: | Economic Geography, Economic History, Path Dependence, Transportation |
| JEL: | R11 N93 O18 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1248&r=geo |
| By: | Lutgen, Vanessa (IRES, Université catholique de Louvain); Van der Linden, Bruno (IRES, Université catholique de Louvain) |
| Abstract: | This paper studies equilibrium unemployment in a two-region economy where homogeneous workers and jobs are free to move and the housing market clears. Because of the Internet, searching for a job in another region without first migrating there is nowadays much simpler than in the past. Search-matching externalities are amplified by this possibility and by the fact that some workers can simultaneously receive a job offer from each region. The rest of the framework builds on Moretti (2011). We study numerically the impacts of various local shocks in a stylized US economy. Contrary to what could be expected, increasing matching effectiveness in the other region yields growing regional unemployment rates. We characterize the optimal allocation and conclude that the Hosios condition is not sufficient to restore efficiency. In the efficient allocation, the regional unemployment rates are much lower than in the decentralized economy and nobody searches in the other region. |
| Keywords: | matching, search then move, spatial equilibrium, regional economics, unemployment differentials |
| JEL: | J61 J64 R13 R23 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7763&r=geo |
| By: | Luca Colombo (Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore); Herbert Dawid (Universität Bielefeld) |
| Abstract: | This paper investigates firms' optimal location choices explicitly accounting for the role of inwards and outwards knowledge spillovers in a dynamic Cournot oligopoly with firms that are heterogeneous in their ability to carry out cost-reducing R\&D. Firms can either locate in an industrial cluster or in isolation. Technological spillovers are exchanged between the firms in the cluster. It is shown that a technological leader has an incentive to locate in isolation only if her advantage exceeds a certain threshold, which is increasing in firms' discount rate, in industry dispersion, and in the intensity of knowledge spillovers. Scenarios are identified where although it is optimal for the technological leader to locate in isolation, from a welfare perspective it would be desirable that she locates in the cluster. |
| Keywords: | Location Choice, Knowledge Spillovers, Technological Leadership, Markov-perfect Equilibrium |
| JEL: | L13 C73 O31 R12 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:ctc:serie1:def1&r=geo |
| By: | Thomas Kemeny |
| Abstract: | This paper reviews a growing literature investigating how 'immigrant' diversity relates to urban economic performance. As distinct from the labor-supply focus of much of the economics of immigration, this paper reviews work that examines how growing heterogeneity in the composition of the workforce may beneficially or harmfully affect the production of goods, services and ideas, especially in regional economies. Taking stock of the existing literature, the paper argues that the low-hanging fruit in this field has now been picked, and lays out a set of open issues that need to be taken up in future research in order to fulfil the promise of this work. |
| Keywords: | diversity, immigration, cities, regional economic performance |
| JEL: | O4 O15 O18 O31 R0 J28 J31 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sercdp:0149&r=geo |
| By: | Jones, A. |
| Abstract: | The 2007-9 period saw an unprecedented crisis emerge in global financial markets with the collapse of several large western financial institutions, and the nearest moment of systemic crisis yet witnessed in the globalized financial system. The crisis has thus provoked a significant questioning of market theories, and in particular understandings of market within orthodox neoclassical economics. Within the social sciences, a significant element of this response has built on a growing heterodox socioeconomic literature which is heavily critical of hegemonic conceptions of the market within economics. However, whilst a small body of work in economic geography has begun to engage with this literature, geographical thinking has not directly sought to conceptualise the nature and significance of market spatiality. Utilizing a cultural economy approach, this paper therefore argues that economic geographical theories need to foreground the concept of market rather than treat markets as a ‘component’ of wider processes. It further contends that the concept of the ‘market’ needs to be reconceptualised in a way that captures the spatialities of markets and the difference that space makes to market behaviours and outcomes. Drawing on the growing heterodox socioeconomic literature on markets, it thus proposes a practice-oriented ‘socio-spatial approach’ for framing conceptions of market spatiality, arguing that such a spatial epistemology opens up a range of theoretical possibilities for further contesting hegemonic neoclassical theories of the market beyond current socioeconomic critiques. It seeks to illustrate the utility of such a framework through a case study analysis of the limitations inherent in existing policy practices surrounding the early phase of the recent global financial crisis. |
| Keywords: | markets; economic practices; financial crisis; spatiality; cultural economy; actor network theory; performativity |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dip:dpaper:2013-10&r=geo |