LOCATIONAL SIGNALING AND AGGLOMERATION

Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at that location. When workers' marginal willingness to pay for housing is negatively correlated with their productivity, only the core‐periphery (partially stratified) equilibria are stable. When workers' marginal willingness to pay for housing and their productivity are positively correlated, there is no core‐periphery equilibrium. The urban wage premium is explained when there is a core‐periphery equilibrium. Furthermore, location can at best be an approximate rather than a precise sieve for high‐skill workers.     

KNOWLEDGE SPILLOVERS,ABSORPTIVE CAPACITY,AND SKILL INTENSITY OF CHILEAN MANUFACTURING PLANTS*

ABSTRACT Knowledge spillovers are an important source of economic growth. In this study, we identify a mechanism through which knowledge spillovers occur among plants in the Chilean manufacturing industry. A plant‐level production function is estimated with the absorptive‐capacity hypothesis, that is, employment of skilled workers is a key channel through which knowledge is transmitted across plants. Results show that a plant's productivity from spillovers increases with its skill intensity, which is measured by the share of skilled workers in total employment. We also find that plants in a region with a large knowledge stock increase their skill intensity to benefit more from spillovers. Our results suggest that an increase in regional knowledge stock is the most effective policy to improve a plant's productivity. However, policies that encourage a plant to employ high skill‐intensive production also enhance its productivity.     

AGGLOMERATION,URBAN WAGE PREMIUMS,AND COLLEGE MAJORS

The aim of this paper is to examine the manner and extent to which worker skill type affects agglomeration economies that contribute to productivity in cities. I use college majors to proxy for skill types among workers with a bachelor's degree. Workers with college training in information‐oriented and technical fields (e.g., STEM areas such as engineering, physical sciences, and economics) are associated with economically important within‐field agglomeration economies and also generate sizeable spillovers for workers in other fields. In contrast, within‐field and across‐field spillovers for workers with college training in the arts and humanities are much smaller and often nonexistent. While previous research suggests proximity to college‐educated workers enhances productivity, these findings suggest that not all college‐educated workers are alike. Instead, positive spillover effects appear to derive mostly from proximity to workers with college training in information‐oriented and technical fields.     

MIGRATION,SKILL FORMATION,AND THE WAGE STRUCTURE*

ABSTRACT We analyze the impacts of migration and of labor market integration on the distribution of skills and the wage structure in both the short and the long run. To do so, we develop a framework where workers have heterogeneous skills and where in‐migration expands the range of available skills in the economy. In the short run, this expansion leads to productivity gains, which may more than offset the negative endowment effects of a larger labor supply so that all workers may be better off. In the long run, in‐migration impacts wages further by altering the workers' incentives to acquire skills, thereby affecting the wage structure indirectly by changing the economy's skill composition. Since the short and the long‐run effects of in‐migration on wages may differ, compositional changes may be an important element to take into consideration. A numerical illustration calibrated on U.S. data suggests that the immigration of skilled workers negatively affects the incentives for domestic skill formation, thereby suggesting that endowment effects dominate externalities. We finally extend the model to cope with the simultaneous impacts that migration and skill formation have on the host and the source region, and we show that more migration increases wage disparities and the skill gap across regions.     

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 COMPLEMENTARITY BETWEEN CITIES AND SKILLS*

ABSTRACT There is a strong connection between per‐worker productivity and metropolitan area population, which is commonly interpreted as evidence for the existence of agglomeration economies. This correlation is particularly strong in cities with higher levels of skill and virtually nonexistent in less skilled metropolitan areas. This fact is particularly compatible with the view that urban density is important because proximity spreads knowledge, which either makes workers more skilled or entrepreneurs more productive. Bigger cities certainly attract more skilled workers, and there is some evidence suggesting that human capital accumulates more quickly in urban areas.     

AGGLOMERATION AND GROWTH WITH ENDOGENOUS EXPENDITURE SHARES*

ABSTRACT We develop a New Economic Geography and Growth model which, by using a CES utility function in the second‐stage optimization problem, allows for expenditure shares in industrial goods to be endogenously determined. The implications of our generalization are quite relevant. In particular, we obtain the following novel results: (1) two additional nonsymmetric interior steady states emerge for some intermediate values of trade costs. These steady‐states are stable if the industrial and the traditional goods are either good or very poor substitutes, while they are unstable for intermediate (yet lower than one) values of the intersectoral elasticity of substitution. In the latter case, the model displays three interior steady states—the symmetric and the core‐periphery allocations—which are stable at the same time; (2) agglomeration processes may always take place, whatever the degree of market integration, provided that the traditional and the industrial goods are sufficiently good substitutes; (3) the regional rate of growth is affected by the interregional allocation of economic activities even in the absence of localized spillovers, so that geography always matters for growth and (4) the regional rate of growth is affected by the degree of market openness: in particular, depending on whether the traditional and the industrial goods are good or poor substitutes, economic integration may be, respectively, growth‐enhancing or growth‐detrimental.     

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.     

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.     

DESTRUCTION AND REALLOCATION OF SKILLS FOLLOWING LARGE COMPANY CLOSURES

This paper analyzes what happens to redundant skills and workers when large companies close down and whether their skills are destroyed or reallocated. The analysis is based on a combination of qualitative and quantitative data of the closure of four companies. Getting a job in a skill‐related industry or moving to a spinoff firm leads to skill reallocation. Thus, the result depends on regional idiosyncrasies such as industry structure and urbanization. If local policy makers and the owners exert a coordinated effort, it is possible to create success stories of less skill destruction in urban as well as peripheral regions.     

LABOUR MOBILITY AND PLANT PERFORMANCE: ON THE (DIS)SIMILARITY BETWEEN LABOUR‐ AND CAPITAL‐INTENSIVE SECTORS FOR KNOWLEDGE DIFFUSION AND PRODUCTIVITY

In this article we analyse differences between capital‐ and labour‐intensive sectors with regard to the impact of workforce composition and labour mobility on plant performance. By the use of geo‐referenced longitudinal employer–employee data on a micro level, we analyse labour flows between plants within and between labour market regions. The analysis is carried out using weighted least squares (WLS) regression analysis combined with additional variance analysis (ANOVA). The results show that there are differences between the sectors with regard to both in‐house workforce composition and type of skill inflow. A high degree of related knowledge in the in‐house workforce has a strong positive effect on plant performance in the labour‐intensive sectors. The analysis of labour inflow indicates that knowledge in the capital‐intensive sectors is localized – only intra‐regional labour flows give rise to increased plant productivity. In the labour‐intensive sectors, the geographic and cognitive dimensions complement one another; similar knowledge needs to be non‐local in order to be beneficial to plant performance, and unrelated knowledge mainly contributes to plant productivity growth when it is local.     

INDUSTRIAL CENTERS AND REGIONAL GROWTH IN THE PRESENCE OF LOCAL INPUTS*

ABSTRACT. A large proportion of regional production takes place in nontraded goods and services. In addition, significant productivity increases can be observed in some segments of this sector. Starting from these two empirical observations we construct a model of growth in a two-region setting with factor mobility. The growth process is based on endogenous technological change in the nontraded input sector, whose output serves as an input in the production of one of the two final goods, the so-called industrial good. We consider two extreme cases, one with locally limited, the other with interregional knowledge spillovers. Conditions are established under which interior solutions with production of local inputs and steady-state growth in both regions result, and others under which we find a core-periphery pattern with growth concentrated in one region only. The stability of the equilibria is discussed by considering the transition processes. Finally, it is shown that catching-up as well as leapfrogging may occur, if new technologies become available.     

Spatial and social mobility

This paper analyzes the relationship between spatial mobility and social mobility. It develops a two‐skill‐type spatial equilibrium model of two regions with location preferences where each region consists of an urban area that is home to workplaces and residences and an exclusively residential suburban area. The paper demonstrates that relative regional social mobility is negatively correlated with segregation and inequality. In the model, segregation, income inequality, and social mobility are driven by differences between urban and residential areas in commuting cost differences between high‐skilled and low‐skilled workers, and also by the magnitude of taste heterogeneity.     

INSTITUTIONAL EMBEDDEDNESS AND REGIONAL ADAPTABILITY AND RIGIDITY IN A CHINESE APPAREL CLUSTER

In recent years, the flexibilities industrial clusters may offer to firms within them have been questioned as inter‐firm linkages have, in some cases, locked‐in path‐dependent practices and increased economic rigidities. In this sense, the canonical path dependence model has tended to overlook such trajectories of cluster evolution and has not paid as much attention to the ways in which actors can affect path‐dependent processes. In this article, we build on this critique which has largely been developed in evolutionary economic geography to explore how a cluster becomes progressively locked‐in and how the knowledge base of an industry becomes homogenized, resulting in a loss of innovative dynamism and a slowdown in the growth, or even stasis, of the cluster. By focusing on a case study from China, the article investigates some of the ways in which different kinds of actors respond to external shocks, and the ways in which the resulting processes are fraught with tensions and divergences. In doing so, the article emphasizes that the association between trans‐local pipelines and innovation is not predetermined. The second theoretical contribution of this article lies in its attempt to reveal that all actors can be both path dependent and path breaking, and the process of co‐evolution can be driven by the heterogeneity and divergence of particular actors. Finally, we seek to contribute to existing literature by showing the potential advantages of working at the interface between evolutionary economic geography and other theoretical approaches.     

REGIONAL WAGE DIFFERENCES IN THE NETHERLANDS: MICRO EVIDENCE ON AGGLOMERATION EXTERNALITIES

Based on micro data on individual workers for the period 2000–2005, we show that wage differentials in the Netherlands are small but present. A large part of these differentials can be attributed to individual characteristics. Remaining effects are partially explained by variations in employment density, with an elasticity of about 4.8 percent, and by Marshall‐Arrow‐Romer externalities, where doubling the local share of a (two‐digit) industry results in a 2.9 percent higher productivity. We also find evidence for small negative effects of competition (Porter externalities) and diversity (Jacobs externalities).     

DETERMINANTS OF KNOWLEDGE PRODUCTION AND THEIR EFFECTS ON REGIONAL ECONOMIC GROWTH

ABSTRACT We provide a Bayesian spatial Markov Chain Monte Carlo model composition (MC³) analysis of growth rates in European regional patenting activity. Based on theoretical models on innovation and growth, we identify a large set of candidate explanatory variables that characterize regional stocks of knowledge, including: human resources devoted to innovative activity, scientific and technical capabilities, public and private investments, government policies, as well as regional industry structure, and indicators of regional technology gaps that reflect distance from the technological frontier. Our analysis shows that accommodating spatial dependence and heterogeneity leads to different conclusions regarding factors important for technological transfer and knowledge spillovers.     

京津冀城市群产业投资网络演变及影响因素研究

本文利用2000—2019年工商企业注册数据库中的企业投资汇总数据构建京津冀城市群的产业投资网络,采用社会网络分析法研究其演变特征及行业差异,在此基础上利用QAP回归分析探讨其影响因素。主要结论为：产业投资规模呈阶段性增长,投资空间范围扩大,投资格局从单核辐射网络演变为“双层三角联动辐射网络”,核心—边缘结构明显但极化现象逐步减弱。产业投资网络存在行业异质性,制造业呈现等级辐射网络,科学研究与技术服务业呈现单核辐射网络。影响因素从以经济规模和劳动力成本为主演变为行政界线、劳动力成本、科研创新、金融市场、经济规模多种因素共同作用,影响因素也存在行业异质性。     

Wage Effects of Unemployment Duration and Frequency

This paper analyzes the wage effects of unemployment duration and frequency for different regional labor market situations in The Netherlands using a simultaneous equations approach. The main finding is that unemployment duration has a significant negative effect and the frequency of unemployment a significant positive effect on wages in the core regions with relatively low unemployment rates. In the periphery with relatively high unemployment rates no significant effects of unemployment duration and frequency are found. It is argued that in the core regions unemployment duration is primarily viewed as a personal indicator of low productivity whereas in the periphery it is attributed to the situation in the regional labor market.     

DISENTANGLING AGGLOMERATION ECONOMIES: AGENTS,SOURCES, AND SPATIAL DEPENDENCE*

ABSTRACT This paper expands the literature on agglomeration economies in three ways. It disentangles amenity and productivity effects of agglomeration; it decomposes aggregate scale effects into agglomeration factors of interest to policy makers; and it estimates own effects and spillovers to neighbors. It proposes a spatial simultaneous equations model in a spatial equilibrium framework with three agents—workers, consumers, and producers of traded‐goods and housing. Results for Ohio counties estimate economies resulting from population size, agglomeration causes, and public service quality and cost on each of the three agents in own and neighboring counties.     

Knowledge Spillovers and Total Factor Productivity: Evidence Using a Spatial Panel Data Model

This article investigates the impact of knowledge capital stocks on total factor productivity (TFP) through the lens of the knowledge capital model proposed by Griliches (1979) , augmented with a spatially discounted cross-region knowledge spillover pool variable. The objective is to shift attention from firms and industries to regions and to estimate the impact of cross-region knowledge spillovers on TFP in Europe. The dependent variable is the region-level TFP, measured in terms of the superlative TFP index suggested by Caves, Christensen, and Diewert (1982) . This index describes how efficiently each region transforms physical capital and labor into output. The explanatory variables are internal and out-of-region stocks of knowledge, the latter capturing the contribution of cross-region knowledge spillovers. We construct patent stocks to proxy annual regional knowledge capital stocks for N =203 regions during 1997–2002. In estimating the effects, we implement a spatial panel data model that controls for spatial autocorrelation as well as individual heterogeneity across regions. The findings provide a fairly remarkable confirmation of the role of knowledge capital contributing to productivity differences among regions and add an important spatial dimension to discussions in the literature by showing that productivity effects of knowledge spillovers increase with geographic proximity.