Economic Governance and the Evolution of Industrial Districts Under Globalization: The Case of Two Mature European Industrial Districts

For many mature European industrial districts, the present decade has been one of trying (and often failing) to meet the difficult challenges posed by the rising tide of globalization. The future of these districts in the new global economy has become a key issue for regional and local development policy, and, in this respect, it has sparked a renewed interest in economic governance. Economic governance is important in that it underpins a region's long-term economic development path. This article is a contribution to the study of the economic governance of industrial districts and the related policy debate. The article does so by specifically exploring the economic governance issue by considering the experiences and challenges currently facing two mature European industrial districts in the global economy.     

LOCATIONAL FACTORS IN THE DECLINING INDUSTRIAL COMPETITIVE ADVANTAGE OF THE NEW YORK URBAN REGION*

This paper investigates the locational factors that contributed to the decline of the New York urban region's industries during 1972-1975. Based on the static concept of a specialization index, a dynamic comparative advantage index is constructed. A model is then formulated to test the hypothesis that regional competitive advantage (vis-à-vis the nation) is a function of relative disparities in the change of these locational factors. Regression results show that the region's competitive advantage is influenced positively by the differential rate of change in market size, by the differential profit rate before tax, and negatively by the differential rate of change in unit labor cost and in unit energy cost. The differential tax rate does not seem to affect the region's competitive advantage. Nevertheless, a progressive corporate income tax structure tends to neutralize the beneficial effects of the economies of agglomeration and the urban attraction of the region.     

Simulating Sources of Uncertainty in Policy Forecasting with a Large-Scale Regional Econometric Model

Long-term forecasts may be helpful in establishing the general framework for a region's policy agenda, and a well-structured economic model offers an opportunity to identify major policy instruments affecting a region's long-term growth. Nevertheless, the uncertainty of long-term forecasts should serve to caution policymakers in interpreting and acting upon such information. To offer perspective on this aspect of forecasts, simulations of the Pittsburgh economy are performed to the year 1995 using a large-scale regional econometric model. The forecasts are based on alternative assumptions concerning the performance of the national economy and the objective conditions characterizing key industries in the region. In this way, the model is used to identify and quantify several major sources of uncertainty in long-term regional forecasts.     

Some Aspects of the Development and Location of Industry in the Central Asian Economic Region

Despite rapid industrialization since World War II, Central Asia is still far from exhausting its potential for industrial development based on abundant mineral resources, fuels and energy, and on the most favorable manpower supply of any of the Eastern regions of the USSR. The only limiting factor in economic development is water. In light of the region's resource situation, future development should focus on a diversified industrial expansion involving activities with limited water and metal needs (in the absence of a major regional iron and steel plant) or medium or high energy and labor requirements. This would include nonferrous metals, chemicals (except for those posing a water pollution problem) and expansion of the region's cotton-based production complex, ranging from irrigated cotton culture to finished fabrics.     

After central planning: The restructuring of state industry in Bulgaria's Bourgas region

Industrial regions in eastern Europe developed under central planning are now confronting the pressures associated with political and economic transition to market‐focused systems. Using the case of the Bourgas region, on Bulgaria's Black Sea coast, the article examines how state industries are faring in these new conditions, analyzing developments in production, employment, ownership, management, market‐orientation and other factors. Massive financial and human resources were poured into the region's industrial development during more than four decades of state socialism, building a modem industrial infrastructure, but one heavily characterized by the particular features and constraints of central planning which emphasized quantity over quality and large‐scale, integrated plants. As central control collapses, the region's state‐owned firms are in crisis. Production is down, unemployment has risen, and except for a handful of plants restituted to former owners, privatization is moving slowly. The region's industries have been battered by highly unfavorable outside forces, yet have been mostly unable to marshal the necessary management, financial, or technical resources to implement coherently any indigenous strategic initiatives to address the changed institutional environment and new supply and demand conditions.     

Prospects of Development of the Industrial Complex of the Volga-Vyatka Major Economic Region

The Volga-Vyatka region, one of the Soviet Union's leading machinery and chemical producers, has potentialities for further growth in these two industries. Favorable factors are a skilled labor force and a central transportation location in European Russia, midway between raw-material suppliers and markets. In view of industrial overcrowding in the Gor'kiy and, ultimately, Kirov urban areas, future industrial construction should be planned in medium-size and small cities and in the region's peripheral areas.     

Livelihoods Limitations: The Political Economy of Urban Poverty in Dhaka,Bangladesh

Research in Bangladesh reveals the limitations of actor‐oriented frameworks for understanding urban poverty that assess household livelihoods on the basis of a household's portfolio of assets or capitals. The narrow focus of these frameworks on households and their depoliticized definition of social capital overlook the political roots of urban poverty. The informal systems of governance that dominate resource distribution within low‐income settlements ensure that the social resources necessary for long‐term household improvement are confined to a small elite. Only through extending our analysis beyond the household level, to explore their position within this local political economy of employment and enterprise, can we recognize the limitations placed on household efforts to improve their livelihoods.     

International relations and the Himalaya: connecting ecologies,cultures and geopolitics

ABSTRACT

This article examines international relations (IR)'s approach to the Himalaya. We argue that the possibility of violent conflict over contested international borders is not the region's primary international challenge. Rather, slow violence inflicted by state-building and militarisation, intimately connected to geopolitical tensions, threaten the region's ecologies, cultures and languages. The Himalaya is home to three biodiversity hotspots and a mosaic of ethnic groups, many of whom speak threatened languages. Its ice-deposits feed most of Asia's large rivers. In recent years, India and China have pursued large-scale infrastructure development in the region, enabling greater militarisation and extraction, and a tourist rush. These threats are amplified by climate change, which is occurring in the Himalaya at twice global averages, contributing to landslides, flooding, and droughts. However, the region's complexity is not matched by IR's theorisations, which overwhelmingly focus on the possibility of violent conflict between state actors. We argue that IR's analysis of the region must go beyond a states-and-security, Delhi-Beijing-Islamabad centred approach, to look at the numerous interconnections between its geopolitics, cultures and ecologies. We suggest this can be accomplished through incorporating more interdisciplinary analysis, and through focusing on the interaction between the organisation of political authority and the region's environment.     

WELCOME TO THE NEIGHBORHOOD: HOW CAN REGIONAL SCIENCE CONTRIBUTE TO THE STUDY OF NEIGHBORHOODS?*

ABSTRACT We argue in this paper that neighborhoods are highly relevant for the types of issues at the heart of regional science. First, residential and economic activity takes place in particular locations, and particular neighborhoods. Many attributes of those neighborhood environments matter for this activity, from the physical amenities, to the quality of the public and private services received. Second, those neighborhoods vary in their placement in the larger region and this broader arrangement of neighborhoods is particularly important for location choices, commuting behavior and travel patterns. Third, sorting across these neighborhoods by race and income may well matter for educational and labor market outcomes, important components of a region's overall economic activity. For each of these areas we suggest a series of unanswered questions that would benefit from more attention. Focused on neighborhood characteristics themselves, there are important gaps in our understanding of how neighborhoods change – the causes and the consequences. In terms of the overall pattern of neighborhoods and resulting commuting patterns, this connects directly to current concerns about environmental sustainability and there is much need for research relevant to policy makers. And in terms of segregation and sorting across neighborhoods, work is needed on better spatial measures. In addition, housing market causes and consequences for local economic activity are under researched. We expand on each of these, finishing with some suggestions on how newly available data, with improved spatial identifiers, may enable regional scientists to answer some of these research questions.     

Resource Development and Aborigines: The Case of Roebourne 1960–1980

The pervasive and dynamic influence of economic restructuring on political and social relations is highlighted in many aspects of Australian daily life. The effect of economic restructuring on already marginalised and disempowered groups in society is often overlooked Development of iron ore mines and associated new towns, railways and ports transformed the regional economy of Western Australia's Pilbara region in the 1960s and 1970s. For Aborigines in Roebourne, this restructuring represented a new phase in their relations with ‘White Australia’. Interacting historical legacies, corporate strategies, government policies and economic processes further marginalised the region's Aboriginal population and linked the region to the global economy in ways which created significant barriers to the development of Aboriginal self-management strategies. This paper reviews this period with particular emphasis on the social impact of the iron ore ‘boom’ on local Aboriginal people. In the current climate of renewed economic and political crisis in Western Australia, this review provides a timely reminder that such processes occur in a broader context than is often recognised in regional planning processes.     

ABSORPTIVE CAPACITY,KNOWLEDGE FLOWS,AND INNOVATION IN U.S. METROPOLITAN AREAS

High growth and progressive regions possess a culture that promotes innovation. Innovation depends on a region's ability to use its own existing knowledge and knowledge generated elsewhere. This paper demonstrates the importance of the ability to absorb external knowledge in explaining innovation productivity for 106 U.S. metropolitan areas. Using a spatial interaction model of patent citation flows with origin and destination dependence, the destination fixed‐effects coefficients provides a measure of a region's absorptive capacity. We identify local conditions that shape a region's absorptive capacity and demonstrate it has a positive and significant impact on innovation productivity.     

THE EFFECTS OF COLLATERALIZABLE INCOME AND DEBT OVERHANG ON ENTREPRENEURIAL INVESTMENT IN AN OPEN REGIONAL ECONOMY*

ABSTRACT We use a two‐period model to analyze the contractual relationship between entrepreneurs and venture capitalists in an open regional economy. First, we describe the first best investment contract, we study the second best investment contract in the presence of private information, and then we examine the impact of an exogenous second‐period income endowment (collateralizable income) on investment by entrepreneurs. Next, we analyze the interaction between entrepreneurs and venture capitalists when the regional government (RG) must pay off a per capita debt (debt overhang) which it finances by taxing successful second‐period entrepreneurs. We show that a rise in the per capita debt has an effect on investment that is analogous to a fall in the second‐period income endowment. In addition, the overhang of the RG's debt discourages entrepreneurial investment.     

Arriving at the Dawn of the New Economy: Is Knowledge-Based Industrial Renewal Possible in a Peripheral Region?

In the contemporary knowledge economy, characterized by both globalization and localization of economic activities, the ability of both firms and their respective regions to adapt to changes in their external environment and to retain their competitiveness is closely related to their capacity to innovate and to continually upgrade existing structures, practices and knowledge bases. In this respect, co-location of firms operating in the new knowledge-intensive sectors is typically considered to be beneficial for both the firms themselves and for their respective regional economies. In this study, we considered whether knowledge-based industrial renewal is possible in peripheral regions. The empirical study was designed to identify tendencies towards and potential concentrations of new knowledge-intensive industries in the relatively peripheral region of Pohjois-Savo in Finland. The strength of such tendencies was determined by employing the Herfindahl index and location-quotient methods. The analysis indicates that while the more traditional industries still appear to be dominating the region's economic landscape, the new knowledge-intensive industries have gained at least a foothold in the region, indicating a potential target for local policymakers' further development efforts. Pohjois-Savo can be considered to be a typical Finnish region, characterized by a large central city with a university, a few smaller sub-regional centres and the surrounding large rural periphery. However, earlier literature with the same focus is lacking and regional strategies and entrepreneurial structures differ in different regions; thus, we cannot establish whether these conclusions hold in other regions in Finland or how applicable these results are in an international context.     

Industrial Heritage Tourism and Regional Restructuring in the European Union

This paper explores the current trend among traditional industrial regions in Europe to launch initiatives in the field of 'industrial heritage tourism'. Increasingly, restoring and exploiting former industrial sites for touristic purposes is regarded as a useful strategy for regional renewal. After having discussed its background and categories, we argue that, theoretically, industrial heritage tourism could be an interesting 'new combination' for industrial areas in the European service economy. In practice, however, its effects for regional restructuring might be limited. Therefore, we suggest to re-use Europe's industrial heritage also for other economic activities than only tourism.     

FIRM ENTRY AND EXIT: CAUSALITY TESTS AND ECONOMIC-BASE LINKAGES*

ABSTRACT One of the foundations of applied regional economics down through the years has been economic base theory (EBT). EBT presumes that economic activity within the basic sector unidirectionally causes economic activity in nonbasic sectors. In recent years, however, increasing attention has been given to the possibility that traditionally nonbasic activities (e.g., services) may be quite important in determining a region's total economic activity. In this paper, we examine the nature and direction of causality of economic activity within a regional economy. Using novel data on entry and exit of firms, the empirical analysis provides new insights into the strengths and weaknesses of traditional economic base theory.     

Immigrant entrepreneurs,diasporas, and exports

This paper demonstrates the positive effect of immigrant entrepreneurs on manufacturing exports over and above that of diasporas. Using small-scale regional administrative data, our instrumental variable estimates of export gravity models imply that ceteris paribus, that is, holding constant the total number of immigrants, the expected protrade effect of a migrant becoming an entrepreneur amounts to an average increase of US$5,946 in the export flows toward her country of origin. Besides these dyadic effects, immigrant entrepreneurs unlike nonentrepreneurial immigrants raise a region's overall competitiveness and export flows toward other destinations as well.     

New Perspectives for Modernization in Central America

ABSTRACT Ostensibly, the Central American Left has been defeated both politically, in the Nicaraguan elections, and economically, with the triumph of orthodox economic adjustment policy. In reality, the end of the Cold War promises to alter the economic and political climate in a way that will encourage the region's long-delayed modernization. Although the political arena remains turbulent, moderate forces are emerging which Washington will find easier to support. Equally promising is the region's favourable record of economic adjustment in the second half of the 1980s. A more favourable world climate for world trade in the 1990s would ease the region's foreign exchange constraint and enable a further round of industrialization to take place, while further eroding the economic basis of ‘oligarchic despotism’.     

The Durham Gentry and the Scottish March, 1370–1400: County Service in Late Medieval England

Abstract

The study of landed society has moved beyond the polarizing paradigms of 'community' and 'affinity', and now ensures a healthy respect for regional variation based upon numerous variables. In the North-East, it has long been understood that great landlords, secular as well as ecclesiastics, were critical to the defence of the Scottish March and were thus vested with a great deal of authority by Crown and country. It would therefore be very much to be expected that local landed society and politics would be dominated by the region's great affinities, such as those of the Nevilles and the Percies, along with that of the bishop of Durham. But close study of the landed community reveals a more complex picture, one in which members of the region's gentry often achieved real measures of independence, many attending their affairs far outside these great baronial retinues and households, and building wealth and careers over time independent of the region's great magnates, who exercised such a profound influence over national affairs. Their holdings, careers, and political activities are the main subjects of this essay.     

The Costs of Exclusion: Gender Job Segregation,Structural Change and the Labour Share of Income

While women's share of employment has risen in many countries over the last two decades, gender job segregation has worsened, with women increasingly excluded from ‘good’ jobs in the industrial sector. In this article, the determinants of gender job segregation are assessed using panel data for a broad set of developing countries covering the period 1991–2015. The effect of gender job segregation on all workers, via the labour share of income, is also analysed. The results identify two major contributors to gender job segregation — the rising capital/labour ratio and the ratio of female/male labour force participation rates — indicative of ‘crowding’ and exclusion as economies move up the industrial ladder. The analysis further indicates that the crowding of women into lower quality jobs has a negative effect on workers as a whole by dampening the labour share of income. Those processes are influenced by global and macroeconomic conditions and policies that have circumscribed the expansion of high‐quality jobs relative to labour supply, intensifying competition for ‘good’ jobs and weakening labour's bargaining power.     

Material constraints to popular imaginaries: The extractive economy and resource nationalism in Bolivia

Widespread neoliberal-era privatizations in South America's extractive economies rekindled longstanding social movement demands for nationalist control of non-renewable resources and propelled the region's left political turn over the last decade. In Bolivia, where resource extraction has dominated exports since colonial times, social movements employing resource nationalist master frames overturned governments in 1952, 2003, and 2005. In 2005 indigenous leader Evo Morales was elected president promising to direct resource wealth to generate economic development, but the structural constraints created by an extractive economy have made these goals impossible to achieve over the short and medium term. This article suggests that the clash between resource nationalist imaginaries embedded in contentious social movements and the realities of long-term extractive dependent economies not only limits government policy options but also fuels continued social protest.