CAN REGIONALIZATION OF LOCAL PUBLIC SERVICES INCREASE A REGION'S WEALTH?*

ABSTRACT. In the presence of agglomeration and congestion externalities the sequence of location choices made by firms results in an inefficient distribution of economic activity, since individual firms do not bear the congestion costs they impose on other firms. In this paper, we model the interaction of public authority service strategies and firm location choices. We show that a self-interested regional authority can effect a welfare-improving distribution of economic activity when compared with an economy without an authority or an economy with local authorities. However, we also show that the conditions under which the authority would induce a welfare enhancing distribution depends on the authority's strategic posture, as well as the nature and size of public subsidies for the authority. The conditions necessary for a regional authority to choose an efficiency enhancing strategy may be difficult to achieve.     

MIGRATION AS A WAY TO DIVERSIFY: EVIDENCE FROM RURAL TO URBAN MIGRATION IN THE U.S.

This paper extends the utility maximization model of migration by introducing income and unemployment‐related uncertainties as determinants of utility, and analyzes the effects of the informational advantages of migrants. The paper maintains that migration would expand an individual's economic choices and opportunities and allow diversification. Consequently, diversification advantages influence the location decisions of migrants, an effect captured by the correlation of incomes at the origin and potential destinations. We use the discrete choice model based on random utility maximization as the framework for our empirical investigation of migration from the United States rural to urban counties. This paper takes advantage of an equivalent relation between the conditional logit model and Poisson regression to study the migration decisions using aggregate data among a large set of spatial alternatives. The results show that the diversification concerns have significant effects on location decisions of the rural‐urban migrants in the United States.     

FIRM HETEROGENEITY,MULTIPLANT CHOICE,AND AGGLOMERATION

We examine the organization and location choice of heterogeneous firms in a two‐region economy. When some high‐productivity firms engage in multiplant production, a reduction in transport costs causes two changes in a small region: the closure of plants by high‐productivity multiplant firms and the relocation of low‐productivity single‐plant firms to the region. In the presence of high‐productivity multiplant firms, therefore, a decline in transport costs reinforces the spatial sorting of firms by productivity, enlarging the productivity gap between large and small regions. Conversely, reducing investment costs weakens the spatial sorting effects on regional productivity disparities.     

DOES AGGLOMERATION MATTER EVERYWHERE?: NEW FIRM LOCATION DECISIONS IN RURAL AND URBAN MARKETS*

We test whether commonly used measures of agglomeration economies encourage new firm entry in both urban and rural markets. Using new firm location decisions in Iowa and North Carolina, we find that measured agglomeration economies increase the probability of new firm entry in both urban and rural areas. Firms are more likely to locate in markets with an existing cluster of firms in the same industry, with greater concentrations of upstream suppliers or downstream customers, and with a larger proportion of college‐educated workers in the local labor supply. Firms are less likely to enter markets with no incumbent firms in the sector or where production is concentrated in relatively few sectors. The same factors encourage both stand‐alone start‐ups and establishments built by multiplant firms. Commuting decisions exhibit the same pattern as new firm entry with workers commuting from low to high agglomeration markets. Because agglomeration economies are important for rural firm entry also, policies encouraging new firm entry should focus on relatively few job centers rather than encouraging new firm entry in every small town.     

Using Decision Tree Induction Systems for Modeling Space‐Time Behavior

Discrete choice models are commonly used to predict individuals' activity and travel choices either separately or simultaneously in activity‐scheduling models. This paper investigates the possibilities of decision tree induction systems as an alternative approach. The ability of decision trees to represent heuristic decision rules is evaluated and a method of capturing interactions across decisions in a sequential decision model is outlined. Decision tree induction algorithms, such as C4.5, CART, and CHAID, are suited to derive the decision rules from empirical data. A case study to illustrate the approach considers decisions of individuals when they are faced with the choice to combine different out‐of‐home activities into a multipurpose, multistop trip or make a trip for each activity separately. Data from a large‐scale activity diary survey are used to induce the decision rules. Possible directions of future research are identified.     

Culturally clustered or in the cloud? How amenities drive firm location decision in Berlin

Creative firms are neither capital‐ nor land‐intensive in production. They predominantly rely on creative and specialized labor and, assuming a strong competition for workers, are therefore increasingly dependent on the location of their (potential) employees. If these creative and highly qualified employees are attracted by consumption amenities such as bars, clubs, and restaurants, then it follows that these same amenities may determine the location of creative service firms. I investigate this hypothesis by examining whether Berlin Internet start‐up firms locate in urban amenity‐rich places. Identification builds on the fall of the Berlin Wall. A 1 percent increase in amenity density raises the probability of a start‐up location by almost 2 percent. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors, whereas no effect can be observed for nonreative firms.     

Migration and Occupational Choice among Young Labor Force Entrants: A Human Capital Model

Interregional variations in the conditions for entering the labor force are investigated by analyzing interdependencies between migration behavior and occupational choice for young labor force entrants. The human capital framework indicates that occupational choice depends on the costs and returns associated with entering various occupations, and that interregional variation in these costs and returns is a major reason for migration. Occupational choice and migration behavior will be interdependent if the costs and returns for particular occupations vary over local labor markets, relative to other occupations, and patterns of interdependence between the two decisions are analyzed, using a model of the joint choice of occupation and location. An empirical analysis of occupational choices and migration behavior for young people who entered the U.S. labor force in the 1975–80 period indicates that the odds for entering professional or managerial occupations varied with origin and migration behavior in systematic ways.     

THE DETERMINANTS OF LOCALIZATION AND URBANIZATION ECONOMIES: EVIDENCE FROM THE LOCATION OF NEW FIRMS IN SPAIN

The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries. First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. Then, we regress these estimates on industry characteristics related to the potential importance of labor market pooling, input sharing, and knowledge spillovers. Urbanization effects are high in knowledge‐intensive industries, suggesting that firms locate in large cities to benefit from knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry‐specific, suggesting that industries locate in specialized economic environments to share a common pool of specialized workers.     

Industrial clusters,organized crime,and productivity growth in Italian SMEs

We examine whether organized crime affects firms’ performance (defined using Total Factor Productivity growth) both directly and indirectly, by downsizing the positive externalities arising from the geographic concentration of (intra‐ and inter‐industry) market‐related firms. The analysis uses a large sample of Italian small‐ and medium‐sized manufacturing firms over the period 2010–2013. The results highlight the negative direct effects of organized crime on firms’ productivity growth. Any positive effect derived from industrial clustering is thoroughly debilitated by a strong presence of organized crime, and the negative moderation effect of organized crime on productivity growth is greater for smaller than for larger firms.     

PLACE‐BASED ATTRIBUTES AND SPATIAL EXPENDITURE BEHAVIOR IN TOURISM

In recent discussions on local sustainable development, notions like “local for local” and “home bias” have often played a role. The purpose of this paper is to investigate whether preferences for specific place‐based attributes might constrain or support tourism participation and tourism destination choice of distinct socioeconomic groups of visitors. To test this proposition, a large data set from the Italian Households Budget Survey for the period 1997–2007 has been used and, by means of the double‐hurdle model, tourism participation and expenditure are modeled over the life‐cycle of tourists. These data are next merged with location‐specific attributes including natural amenities and infrastructural and regional‐economic context variables. Our results show that location‐specific or place‐based characteristics affect intra‐ and interregional tourism differently, as well as destination choices. Regional differences between residents in two different macroareas in Italy (North and Center‐South) are investigated. Location‐specific characteristics may be either push or constraint factors for tourism participation. For families living in the North, participation in the tourism market is supported by the tourist characteristics of their home region. For families living in the central and southern regions however, economic conditions of the area where they reside appear to be more significant.     

Institutions, Bureaucratic Decisions, and Policy Outcomes: State Insurance Solvency Regulation

Although over the past 2 decades several scholars have documented a link between institutional arrangements and policy choices, few studies have demonstrated how different institutional arrangements give rise to different policy outcomes. Further, although some studies have related bureaucratic resources to policy decisions, almost none have illustrated that the way state agencies actually deploy regulatory resources—policy outputs—significantly influences policy outcomes. Focusing specifically on the insurance industry in the United States, in this article we illustrate the impact of state regulatory activities on the solvency of firms in the insurance industry from 1987 to 1997, and in doing so we emphasize the differences between policy outputs and policy outcomes. In the case of policy outputs, for example, we find that elected insurance commissioners, divided state government, budgetary resources, and larger insurance sectors lead to more aggressive solvency examinations of insurers. In addition to examinations, however, we discern an important role for both regulatory and political institutions in subsequent insurer insolvencies.     

蚁族城市租住区位规律研究——以福州市为例

近年来,大学毕业生租房日渐成为社会关注热点。本文通过访谈和问卷调查相结合的方式,对福州市新就业大学毕业生在三个层面租房区位的选择进行调查。结果认为:作为理性经济人,大学毕业生在在租房区位选择时希望通过最小的成本付出,能实现效用的最大化,而且对不同层面的区位选择表现出不同的区位规律。宏观区位偏好表现为:希望租住在鼓楼区的最多,台江区和仓山区次之,晋安区最少;区位特征及空间规律变现为贴合各区区位优势差异及现居住地"地理惯性"大。中观区位偏好及区位特征表现为:希望租住在距离工作地近的、交通便利的区位。微观区位偏好及区位特征表现为:希望租住在安全的、厕所和洗澡等生活设施完善和房东友好、有熟人在的小区。     

Consideration of Proximity in Selection of Residential Location by Science and Technology Workers: Case Study of Hsinchu,Taiwan

The Hsinchu district has been one of the most rapidly developing areas of Taiwan during the past decade. The rise of the Hsinchu Science-based Industrial Park (HSIP) has significantly influenced population growth and living environment in the Hsinchu district. To obtain new knowledge via knowledge proliferation activities that occur following knowledge innovation, science and technology workers have been established based on the proximity of informal social network interactions and the existence of a common culture. Based on social, identified and cognitive proximities, this investigation examines whether science and technology workers directly assess their living environment while considering housing purchases, seeking information and making residential location decisions. This investigation employs regression analysis to examine the correlation between individual proximity factors and spatial proximity, based on the hypothesis that individual proximity influences residential location choices of science and technology communities. The study results indicate that the housing choice behaviours of the science and technology community follow two proximity paths, that is, internal and external proximity factors. Consequently, the pull created by individual proximity has slowed the spatial expansion of the Hsinchu region.     

The Role of Personal Factors in the Location Decision of Software Services Start-up Firms

This paper explores the factors which influence the business location decisions of start-ups, focusing in particular on the role of personal factors. Established explanations of industry location emphasize proximity to firms in the same or related industries and proximity to a wider set of business services, though recent research suggests that personal factors may play an important role in explanations of industry location—particularly in technology-enabled sectors. A survey of 97 new firms, founded between 2008 and 2012, in the Irish software services sector, shows that the business location decision is influenced by the personal motivation of entrepreneurs to attain a desired quality of life, and that this outweighs economic factors such as proximity to firms within the same or related industries, proximity to a broader set of supporting business services, infrastructure or the availability of government support schemes. Personal factors are particularly important to firms located outside the Dublin metropolitan area and to home-based businesses. This has important policy implications for national and regional governments seeking to encourage entrepreneurship in technology-enabled service sectors.     

On the Specification of Indirect Utility and Willingness to Pay for Discrete Residential Location Models

In this paper we develop a framework to describe the individual choice of residential location using the microeconomics of discrete choices. The individual is seen as deciding frequency, duration, and location of a set of activities for each potential residential zone, knowing the distribution of goods and activities in space as well as transport costs and travel times. The conditional indirect utility function and its associated willingness to pay function for each zone are obtained, where the roles of accessibility, income, and neighborhood attributes emerge clearly. Zonal utility in discrete location choice models can be specified and interpreted using these functions.     

ANTIAGGLOMERATION SUBSIDIES WITH HETEROGENEOUS FIRMS*

ABSTRACT This paper studies antiagglomeration subsidies in a core–periphery setting when firms are heterogeneous in labor productivity, focusing on the effects of a relocation subsidy on firm location in various tax‐financing schemes (local vs. global). I discuss how a subsidy can enhance welfare and average productivity in the periphery. As a result, I find that a subsidy proportional to profits can induce the relocation of high‐productivity firms and thus increase welfare and average productivity in the periphery. Concerning tax‐financing schemes, a local tax‐financing scheme has an optimal level of subsidy.     

Entrepreneurial spin‐off enterprises in Göteborg,Sweden

This paper focuses on the development of technology‐based entrepreneurial spin‐offs in the Göteborg region. Employment growth and patenting activities of university spin‐offs (USOs) from Chalmers University of Technology are compared with the development of other new technology‐based firms. The results indicate that the majority of the Chalmers USOs are very small firms with low growth. Corporate spin‐offs (CSOs) are found to grow faster than other technology‐based firms, both USOs and non‐spin‐offs. However, the Chalmers USOs are found to be more successful in terms of patenting activities. It is speculated that USOs are especially beneficial to regional development when they are acting as technology suppliers to other local companies.     

Alone or together in the neighbourhood? School choice and families’ access to local social networks

This study explores how the everyday geographies of city life and families’ access to social networks in the neighbourhood influence families’ school choices. The data consist of thematic interviews with parents of 8–14-year-old children (n?=?170) in three urban areas located in the cities of Paris (France), Milan (Italy) and Espoo (Finland) and are analysed via qualitative content analysis. The findings indicate that the families’ access to local social networks influences the reasoning behind school choice to the local school. The children’s relationships with other children and adults in the neighbourhood are considered important, but additionally, the parents’ networks with other parents in the area, mediated by the school, play their role. School choices as practices should therefore be analysed not merely as choices of an institution, as they comprise various aspects concerning the surrounding neighbourhood as a physical and social space.     

Conflict and collusion in the British sugar industry, 1924 to 1928

An examination of the historical geography of the U.K. beet sugar industry from 1924 to 1928 with special reference to the inter-relationships of the different firms in making location decisions. The account is based principally on evidence from formerly confidential documents which became available for public consultation in the early 1970s. The behaviour of the firms is explored within their contemporary technological and task environments. The locational decisions are seen as part of a locational game in four rounds: absorption, conflict, collusion and aftermath. Various strategies for preserving corporate space from competitors are outlined.     

ON THE IMPACT OF LABOR MARKET MATCHING ON REGIONAL DISPARITIES*

ABSTRACT We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics of workers' and firms' location choices, we show that the spatial outcome depends crucially on different dimensions of agents' mobility. The effect of a higher level of human capital on regional disparities depends on whether it makes workers more mobile or more specialized on the labor market.