Scale economies and the geographic concentration of industry

In recent empirical literature on spatial agglomeration, manypapers find evidence consistent with location-specific externalitiesof some sort. Our willingness to accept evidence of agglomerationeconomies depends on how well key estimation problems have beenaddressed. Three issues are particularly troublesome for identifyingagglomeration effects: unobserved regional characteristics,simultaneity in regional data, and multiple sources of externalities.Two empirical results appear to be robust to problems createdby the first two issues: (a) individual wages are increasingin the presence of more-educated workers in the local laborforce, which is consistent with localized human-capital externalities,and (b) long-run industry growth is higher in locations witha wider range of industrial activities, which suggests thatfirms benefit from being in more diverse urban environments.Other evidence is supportive of agglomeration effects relatedto regional demand linkages and short-run, industry-specificexternalities.     

Manufacturing and Regional Economic Growth in Turkey: A Spatial Econometric View of Kaldor's Laws

In this paper, the regional economic growth process of Turkey during the period 1990–2000 is analysed within the context of Kaldor's laws. The validity of Kaldor's three growth laws is empirically tested by spatial econometric methods as well as traditional econometric method. The empirical results reported in this paper demonstrate the validity of the laws for Turkey over the period under discussion. In testing the first law, spatial dependence is detected. The presence of spatial dependence indicates that the growth of neighbouring regions (and indirectly, the growth of their manufacturing sectors) has an effect on the growth of a region. All the empirical findings suggest that manufacturing has a key role in regional economic growth.     

European Corridors as Carriers of Dynamic Agglomeration Externalities?

Transport corridors are viewed as a promising way forward in European Union (EU) transport policy, assumed to contribute positively to regional economic development. However, the validity of this assumption is not evident. The aim of this paper is to empirically test whether agglomeration economies in European transport corridor regions are positively related to indicators of regional economic development compared to regions outside the scope of corridors. The results build on the notion that the type of agglomeration economy in combination with the structure of the economy matters for prospects of structural economic growth in different regions. In this way, the analysis not only contributes to enhancing the empirical scrutiny of the corridor concept in EU transport policy, but also provides new insights into how corridors contribute to regional economic growth. We find only limited evidence for a corridor effect across European regions on productivity and employment growth externalities. Instead, we find a large degree of spatial heterogeneity interacting with corridors—a heterogeneity that has been little recognized in EU policies. We suggest that recent attention to place-based development strategies may accord well with the kinds of agglomeration effects related to corridor development observed in this study.     

AGGLOMERATION,CONGESTION, AND U.S. REGIONAL DISPARITIES IN EMPLOYMENT GROWTH

Wide regional disparities exist in U.S. employment growth. To identify the causes of this disparities, we assess the relative contribution of locational characteristics to regional employment growth in the United States from 2001 to 2010 by estimating an employment growth model with the spatial‐lag effect. Results show that, at the margin, congestion effects dominate localized scale externalities in urban counties. A diverse industrial structure and rich human capital are the main factors that contribute to regional disparities in employment growth. Significant spatial‐lag effects indicate that spatial targeting and regional coordination are necessary to maximize the effectiveness of employment growth policies.     

Location and Growth in the Brazilian Northeast

Abstract Clustering of economic performance across jurisdictions has generated considerable research on the spillovers and linkages among geographical neighbors. Much of this work, however, has been aspatial, implying that the influence of location attributes on growth has been largely ignored. In this paper, we examine the contribution of location to regional economic growth using municipio‐level data for the Brazilian Northeast—a historically lagging region of the country. We test if productivity among northeastern municipios is converging to a steady state and whether spatial externalities are linked to productivity growth in individual municipios. We find that, conditional on structural characteristics, productivity among municipios is converging at about 3 percent per year. Further, productivity in individual municipios is positively associated with own‐structural characteristics but negatively associated with productivity growth in neighboring municipios. This means that there are negative spatial externalities coming from productivity improvements in neighboring regions.     

Regional Analysis of China's Green GDP

A Chinese economist and U.S.-based economic geographer investigate China's move toward introducing "greener" measures of economic output to better assess the environmental costs associated with the country's recent economic development. More specifically, the authors applied a model of green gross regional product (GGRP) that adjusts for the costs of growth arising from negative environmental externalities. They then conduct a spatial analysis of the indicator's distribution across China's provinces in 2007 in an attempt to better understand the factors explaining its patterns. The analysis indicates that once environmental externalities in the form of industrial wastes are accounted for, the coastal—inland divide that traditionally describes China's geography of income inequality is much less obvious. Rather a more diffuse pattern emerges, in which some poor provinces are found to be relatively efficient regional producers whereas certain wealthier ones are not.     

REGIONAL POPULATION–EMPLOYMENT DYNAMICS ACROSS DIFFERENT SECTORS OF THE ECONOMY*

ABSTRACT An important subset of the literature on agglomeration externalities hypothesizes that intrasectoral and intersectoral relations are endogenously determined in models of local and regional economic growth. Remarkably, structural adjustment models describing the spatio‐temporal dynamics of population and employment levels or growth traditionally do not include intersectoral economic dynamics. This paper argues and shows that allowing for economic linkages across sectors in these models adds considerable value, especially in forecasting. An econometric model of population–employment dynamics, in which sectoral variations in economic development are explicitly taken into account, is applied to a large urban planning policy proposal in the Netherlands. The empirical analyses suggest that population dynamics are largely exogenous, population changes drive employment in particular in the industry and retail sectors, and employment in all sectors depends strongly on intersectoral dynamics. Intersectoral dynamics appear as important drivers of regional sectoral employment changes; they are even more important than population changes, and their effect shows up clearly even within the Dutch institutional context where strict regulatory housing and planning restrictions are enforced.     

QUANTIFYING KNOWLEDGE SPILLOVERS USING SPATIAL ECONOMETRIC MODELS

ABSTRACT This paper seeks to develop our understanding of the somewhat diffuse nature of technological externalities and space by associating a geographical dimension with the sectoral dimension. Using a panel data set containing French patents as well as private and public research expenditures by industry and region over the period from 1992 to 2000, this paper estimates a knowledge production function. The region‐ and industry‐specific nature of the sample data allows us to empirically examine spatial spillovers associated with public and private research expenditures in own‐ and other‐industry sectors for our sample of 94 French regions. We find that the largest direct and indirect effects are associated with private R&D activity that spills across industry boundaries. However, since Jacobs externalities decrease more drastically with distance than MAR externalities, our results also point to different optimal strategies for regional versus national officials.     

FACTOR ACCUMULATION,EXTERNALITIES, AND ABSORPTIVE CAPACITY IN REGIONAL GROWTH: EVIDENCE FROM EUROPE

This paper proposes a model that incorporates capital accumulation and spatial spillovers across economies, while allowing for regional differences in absorptive capacity. This model is estimated using a sample of EU regions, over a period including the enlargement of the single‐market area in the middle of the first decade of the 21st century. Results confirm the relevance of local absorptive capacity that is directly linked with the process of making the most of externalities. Capital deepening reduced the role of capital in explaining the regional productivity gap, but was not enough to help lagging regions to equal the return to human capital investments reached by most advanced regions.     

SCALE ECONOMIES,REGIONAL EXTERNALITIES,AND THE POSSIBILITY OF UNEVEN REGIONAL DEVELOPMENT*

ABSTRACT. This paper presents a model of regional development which attempts to explain differing patterns of growth in two regions. The model is an extension of Krugman's model of uneven development, but it incorporates not only scale economies within each region but also regional externalities across the regions. Depending on relative magnitudes of net scale economies of the two regions, the model entails different regional development patterns: uneven development, stable or joint development, or a mix of the two. The novel feature of the present model is that different regional development patterns can be explained within the same analytical framework.     

Capital accumulation and regional economic performance: the Australian experience

The accumulation of capital is the driving force of the capitalist economy. Various conditions are necessary for accumulation to proceed and each has important spatial aspects. The paper demonstrates that an analysis of these aspects provides a potentially useful framework for understanding the relationship between regional development and economic growth, with particular reference to the Australian experience. Moreover, it is shown that spatial restructuring plays an important role during periods of economic recession in re-establishing the conditions for further growth. This analysis also illuminates some of the limitations of more conventional regional growth theories and debates on convergence versus divergence in regional economic performance.     

Does EU cohesion policy work? Theory and evidence

This paper evaluates the effectiveness of European Cohesion Policy in the regions of 12 EU countries in the period 1991–2008, on the basis of a spatial growth model, which allows for the identification of both direct and indirect effects of EU funds on GDP per worker growth. We find that “Objective 1” funds are characterized by strong spatial externalities and a positive and concave effect on the growth of GDP per worker, which reaches a peak at the ratio funds/GDP of approximately 3 percent and becomes non‐significant after 4 percent. “Objective 2” and “Cohesion” funds have nonsignificant effects, while all the other funds exert a positive and significant effect, but their size is very limited. EU Cohesion Policy, moreover, appears to have increased its effectiveness over time. In the period 2000–2006 Objective 1 funds are estimated to have a median multiplier equal to 1.52, and to have added 0.37 percent to the GDP per worker growth. Overall, in the period 1991–2008, funds are estimated to have added 1.4 percent to the median annual growth, and to have reduced regional disparities of 8 basis points in terms of the Gini index.     

广东省区域空间结构及其调控研究

区域空间结构的发展状况对区域成长起着重要的影响,空间结构的合理与否,直接影响到区域系统社会经济整体发展水平的提高与协调发展。因此,在这样一个信息多变的社会背景下,对区域空间结构进行系统诊断,及时进行调控就成为区域空间结构研究的重要内容。本文首先立足于经济全球化,对广东省区域空间结构进行了系统分析,其次探讨了空间结构成长的动力机制,最后重点对广东省区域空间结构调控从政策上和实践上做了探讨。提出以下调控措施:①建立科学合理的空间结构等级网络体系;②加强重大工业项目和基础设施建设的区域性协调,优化区域产业布局;③建立新型的核心-边缘关系,实现全区的持续协调发展;④抓住粤港高技术合作新机遇,以现有国家级高新技术产业开发区为依托,构建粤港澳区域创新网络;⑤以数字化信息网络建设为机遇,加快区域信息化进程;科学划分用地空间,实现全省空间结构的持续、协调发展。     

An Introduction to Spatial Discounting

Research on the valuation of environmental externalities shows that decision makers tend to discount not only over time but across space. Just as time discounting has implications for intergenerational equity, geographical or spatial discounting has implications for intragenerational equity. Similarly, just as positive time discount rates are warranted by positive net rates of growth of the capital stock, positive spatial discount rates may be warranted by the fact that enviironmental (or other external effects of economic activity are diffused at positive rates. This paper introduces the notion of spatial discounting and explores its welfare implications through a simple diffusion model.     

Which region to choose for an industrial policy? A research path to highlight restructuring opportunities

Our study explores research avenues that can help policymakers to assess regional capabilities for ‘green’ economic restructuring. After reviewing the relevant literature, and envisioning research paths which consider both market transactions and externalities, we propose possible ways to translate past research findings into novel statistical tools. Our point of departure is the ‘skill relatedness’ among economic sectors in Norway, as inferred from intersectoral labour flows (years 2008–2014). Then, on the basis of the industrial composition in each of the 161 Norwegian labour market areas, candidate regions that could benefit the most from a ‘green’ restructuring policy, aimed at photovoltaics in our empirical example, are brought forward.     

An Empirical Evaluation of Profit Cycle Theory

This study tests key hypotheses of Markusen's profit cycle theory of regional growth by examining the recent time path of industrial development for eight U.S. sectors. The analysis uses annual data for 1954–1990 and incorporates the influence of national economic trends and random effects in identifying stages of the profit cycle. Based upon those stages, the hypothesized changes in the behavior of other aspects of the growth cycle are assessed in simple statistical models. The results of the empirical tests are mixed. Employment follows a general pattern of early rapid growth followed by slow growth and eventually decline, but the pattern is not symmetric. The value-added curves are similarly asymmetric, and some even contradict the expected monotonicity of the growth and decline process. The lack of spatial dispersion is probably the most striking result of the study. The stability over time of the employment percentage in top states is inconsistent with the spatial dispersion implications of the profit cycle model.     

CONFOUNDING INFLUENCES, UNINTENDED IMPACTS, AND GROWTH MANAGEMENT POLICIES

This study demonstrates the relationship among inputs, indirect effects, and intended and unanticipated consequences in determining the content and scope of growth management policies in three California cities. It shows that while a short time frame obfuscates a number of policy impacts, local policymakers can achieve policy objectives if they are aware of and utilize options that are available to them during the implementation process. The study suggests that despite the very real constraints imposed by state legislation and weak regional governments, local governments can more effectively deal with externalities by adopting complementary city-county policies and negotiating priorities.     

Regional Convergence in Central and Eastern European Countries: A Multidimensional Approach

The paper examines the dynamics of regional income at the NUTS3 level of the new EU Member States from Central and Eastern Europe in the years 1998–2005. The authors apply a wide range of methods and tools including classical beta and sigma convergence analysis supplemented by transition matrices, kernel density estimations and spatial autocorrelation statistics. Results of such a multi-dimensional empirical study reveal some previously unrecognized patterns of regional growth in Central and Eastern European Countries (CEECs). Well-acknowledged metropolization and marginalization processes that cause regional divergence at the national scale are accompanied by the following processes. Firstly, at the macroregional scale, regional convergence has been observed as a result of differences in growth rates between individual countries. Secondly, at the national scale, petrification of existing regional structures has been prevailing in majority of the countries. Furthermore, weak convergence of clubs has been observed separately among the richest metropolitan regions and between the group of the poorest regions. In general, the polycentric spatial structure of the macroregion has reduced the impact of rapid growth of rich capital city-regions on convergence processes. Simultaneously, diffusion of development processes had a rather limited range and polarization in larger metropolitan regions have been a characteristic feature of CEECs.     

Contagious Social Practice?

This paper explores the usefulness of spatial innovation diffusion theory for understanding the observed evolution of the social practice of attaining public support as a substitute for working. The empirical example chosen is sick leave. Several European countries have experienced a striking increase in costs for sick leave during the recent years, nowhere however as dramatic as in Sweden. Public costs for sick leave have doubled since 1997 while general health and life expectancy continually improve. No more than a small percentage of this change can be assigned to compositional changes in the population and labour market with respect to age, sex, education, location and sector of employment. Neither has economic benefit conditions changed substantially during this period. What essentially remain, as possible explanations, are changes in attitudes and practices among beneficiaries and physicians. One can observe substantial regional differences in the level of sick leave and apparent traces of spatial autocorrelation in the pattern. The spatial diffusion hypothesis was examined by help of a multivariate analysis based on socio‐economic panel data including sick leave benefits and location for each individual in the labour force 1996–2000. The analysis indicates that the neighbourhood effect is substantial on the local (290 municipalities) and the regional (21 counties) level. Largely, the regional diffusion effect remains when also controlling for more persistent average differences between counties. A semi‐public spatial attitude diffusion process, mainly operating at municipality and county levels, seems to be responsible for a substantial part of the observed increase in cost for sick leave in the period 1996–2000.     

Spatial Agglomeration of Manufacturing in Greece: Sectoral Patterns and Determinants

This article aims to demonstrate how the industry characteristics of manufacturing sectors affect the patterns of their spatial agglomeration. It also addresses several intricate issues concerning the measurement of localization economies and estimation of their main determinants in manufacturing industries. The original empirical analysis employs annual industrial data from the Hellenic Statistical Authority (ELSTAT) during the period 1993–2006 in Greece at the prefecture level, i.e. for 51 prefectures. The data processing reveals three important findings. The first is the temporal persistence of localization economies in the Greek manufacturing. The second refers to the high level of agglomeration associated with the high-technology industries as well as the resource- and scale-intensive industries. Lastly, there are significant effects of industry characteristics related to knowledge externalities, labour skills and productivity, scale economies and own-transport expenditure on spatial agglomeration, as resulted from the use of alternative geographic concentration indices and panel data models. Results obtained have implications for policy-makers, who can enhance the regional manufacturing activity by affecting these industry-specific factors. Amongst others, planning measures and policies which aim at promoting the local development and regional convergence should focus on reducing transport costs for firms or sectors, by improving the infrastructure capacity, interconnectivity and quality of services.