Determinants of regional resilience to economic crisis: a European perspective

The impact of the economic crisis has been highly asymmetric across the European regions. The objective of this paper is to investigate the determinants of resilience to economic crisis across European regions. Regional economic resilience was assessed based on employment changes during 2008–2013, while socioeconomic determinants were analysed pre-crisis (2002–2007). A highly heterogeneous pattern of resilience was observed within countries, while significant differences were also revealed between the continental northern-central regions and the southern periphery. A multilevel logistic regression model indicated the magnitude of country-effects on the performance of regional employment during crisis periods. Both EU-referenced and country-referenced regional resilience identified the positive effect of accessibility and the negative effect of a large manufacturing sector in the ability of regions to withstand recessionary shocks. Education and economic development level positively affected the resilience of both large and small regional European economies. Investing in education enhances the spatial homogeneity across Europe in terms of its ability to react to economic shocks. The results reveal the importance of narrowing disparities among regions and formulating targeted and differentiated regional development policies at country level, taking into consideration the size of the economy of the regions.     

韧性概念演变与区域经济韧性研究进展

区域经济韧性试图解释当冲击发生时为何部分区域能够适应恢复,实现区域经济的持续发展,而有的区域不能摆脱冲击影响,步入经济衰退轨迹。本文通过对国内外相关文献的梳理,总结了工程韧性、生态韧性和演化韧性的概念演变以及从均衡论观点到演化观点的转向,据此重新定义了区域经济韧性的概念内涵,认为区域经济韧性是系统面对冲击时,抵抗冲击影响避免脱离发展轨迹或通过适应恢复实现经济持续发展的能力,是一个不断演化的过程。探讨了区域经济韧性研究的三个理论分析方法,对关于区域经济韧性的测度和影响因素的实证研究进行了评述,强调亟需加强韧性理论研究,界定清晰概念内涵,同时加强区域经济韧性定量本土化研究,将区域经济韧性理论应用到我国老工业基地等经济衰退地区的经济振兴与转型问题中,以期对区域经济发展提供科学参考。     

Regional Fertility Differentials and the Effect of Migration: An Analysis of U.S. State-level Data

This paper explores, theoretically and empirically, the influence of interregional migration on regional fertility differentials. Specifically, it tests the hypothesis that regions that are closely linked through migration have, all else held constant, a lower differential in fertility than regions that are relatively isolated from one another. A model linking the fertility differential between two states to migration as well as a number of socioeconomic variables is articulated. The model is tested by means of a randomization procedure using U.S. state-level data for 1980. Results support the hypothesis that an increasing volume of interregional migration tends to lower regional fertility differentials.     

Exports' Contribution to Economic Growth: Empirical Evidence for California,Massachusetts, and Texas,Using Employment Data

The paper shows an interregional trade model from which testable parameter restrictions for economic base theory, shown to be equivalent to the hypotheses of the Granger causality test, are derived. The results of the tests for three states, based on various bifurcation methods, suggest that economic base theory holds strongly for the crudest definition of the base, but not for others. The frequency analysis indicates a likely association between inherent cyclicalities in employment growth data and economic base theory. The regional multipliers and the timing of economic adjustments to exogenous shocks are also discussed.     

REGIONAL VARIATIONS IN TECHNOLOGICAL CHANGE AND IN POTENTIAL GAINS FROM CONSOLIDATION AMONG U.S. COMMERCIAL BANKS

ABSTRACT. This paper investigates the regional variations in the impact of technological change and in gains from consolidation among U.S. commercial banks. We estimate a multiproduct translog cost function with the appropriate regional dummy variables. Technological change, ray scale economies and scale biases in technological change are estimated for each region. Furthermore, pairwise expansion path economies between all the regions are calculated to evaluate the potential gains from interregional consolidation. In general Southwest banks had the worst and Southeast the best technological change. There is substantial disparity across regions. It also appears that technological change increased the efficient size in the Midwest and Southwest regions and reduced it in the West, Northeast and Southeast. Banks in all regions show ray economies of scale, affirming the need for larger banks if output mix remains constant. Finally, the results support takeover of regional banks by the Money Center banks but not vice-versa, and favor consolidation among regional banks. The biggest potential gains accrue from mergers of Southeast banks with either Midwest or Southwest banks and the least gains are derived from mergers between Midwest and Southwest banks.     

区域经济韧性：研究综述与展望

自金融危机以来，区域经济韧性成为了研究热点。现有文献从均衡论及演化论的视角建构了区域经济韧性的理论框架，认为区域经济韧性不仅是区域发展的结果也是区域发展的动态过程。大量实证研究关注区域发展过程，探讨了不同尺度下经济系统对冲击的抵抗力、恢复力，并分析了经济韧性的影响机理。区域经济韧性是时间维度与空间尺度的统一。现有研究多关注区域本身特性，缺乏从动态性、多主体互动性、多尺度融合视角审视区域经济韧性的形成过程。因此未来研究一方面应当在现有理论基础上与关系经济地理、管理学等领域紧密结合，更重视危机与冲击的异质性，系统揭示行为主体在区域经济韧性形成、维持过程中的重要作用；另一方面应当进一步关注中国发展背景与制度优势，重视韧性研究对经济发展深远的意义，从而增强中国经济在不确定环境下的稳定性。     

A Methodology for Estimating Returns to Skills for Canadian Provinces and U.S. States

Differences in both regional skill prices and skill mix can explain interregional variations in wage distributions. We control for interregional differences in skill mix that permit us to compute key parameters of regional wage distributions including regional returns to skills. In addition to setting forth the methods in detail, we also present estimates for 48 U.S. states and 10 Canadian provinces. For both males and females, we find that regional mean wages (with controls for skills mix) in the U.S. and Canada are similar, but that the returns to skills are systematically higher in the U.S.     

ECONOMETRIC MODELING OF INTERREGIONAL LABOR MARKET LINKAGES*

ABSTRACT. This paper presents a statistical procedure for empirically establishing linkages between regional economies. Using Granger's definition of causality and the final prediction error technique for lag-length specification suggested by Hsiao, a linked, multiregional employment model is developed. The forecast performance of the linked model is compared to models which do not include interregional linkages. It is shown that forecast error is reduced by taking into account employment interrelationships between regions.     

WHERE IS AN OIL SHOCK?

Much of the literature examining the effects of oil shocks asks the question “What is an oil shock?” and has concluded that oil‐price increases are asymmetric in their effects on the U.S. economy. That is, sharp increases in oil prices affect economic activity adversely, but sharp decreases in oil prices have no effect. We reconsider the directional symmetry of oil‐price shocks by addressing the question “Where is an oil shock?” the answer to which reveals a great deal of spatial/directional asymmetry across states. Although most states have typical responses to oil‐price shocks—they are affected by positive shocks only—the rest experience either negative shocks only (five states), both positive and negative shocks (five states), or neither shock (five states).     

Regional inequality in the U.S.: Evidence from city-level purchasing power

Using quarterly data for 42 products over the period from 1990 to 2015, we find that there has been a large and growing dispersion of purchasing power across U.S. cities since 1990 and the dispersion varies widely across products. We also find that total factor productivity shock precedes or predicts the rise in regional inequality of purchasing power. We view that the growing regional inequality found in the purchasing power among U.S. cities might have proceeded after nationwide productivity shocks mainly by the cities with higher share of skilled workers through the products with more flexible price adjustments.     

A REGIONAL CONSUMER DEMAND MODEL FOR NEW ZEALAND*

ABSTRACT. This paper discusses the formulation and estimation of sets of demand systems for six New Zealand regions. The chosen model is based on the Linear Expenditure System, constrained in various ways to take account of interregional differences in consumer behaviour. Our results suggest that income and price elasticities of demand vary significantly between regions, suggesting that regional employment and output patterns are likely to differ in their responses to changes in aggregate demand.     

ECONOMIC FUNDAMENTALS IN LOCAL HOUSING MARKETS: EVIDENCE FROM U.S. METROPOLITAN REGIONS

ABSTRACT.  This paper investigates the effects of national and regional economic conditions on outcomes in the single-family housing market: housing prices, vacancies, and residential construction activity. Our three-equation model confirms the importance of changes in regional economic conditions, income, and employment on local housing markets. The results also provide the first detailed evidence on the importance of vacancies in the owner-occupied housing market on housing prices and supplier activities. The results also document the importance of variations in materials, labor and capital costs, and regulation in affecting new supply. Simulation exercises, using standard impulse response models, document the lags in market responses to exogenous shocks and the variations arising from differences in local parameters. The results also suggest the importance of local regulation in affecting the pattern of market responses to regional income shocks.     

REGIONAL INDUSTRIAL STRUCTURE AND ECONOMIC GROWTH AND INSTABILITY*

ABSTRACT. National and regional employment patterns are subject to growth-instability tradeoffs. This paper applies the portfolio selection model to detailed employment data for the U.S. economy and selected states. Empirical results indicate that growth-instability trade-offs exist in a form not previously understood. The paper also identifies growth and stabilization potential by identifying stabilizing sectors.     

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.     

Sectoral Resilience: Conceptualizing Industry-Specific Spatial Patterns of Interactive Crisis Adjustment

While the regional resilience approach stresses major place-specific factors of adaptability to economic crises, industry-sector-specific mechanisms of shock response, which often cross-regional boundaries, still require conceptualization relating to aspects of resilience. This paper proposes the concept of sectoral resilience, which acknowledges that the actors who constitute the value chains and production systems of an industry sector, when struck by a major global crisis, collectively and interactively form a sector-specific pattern of response and adaptation. As these actors often strategically use assets at different locations, industry-specific spatial patterns of adaptation emerge that affect various regions in differing ways. After defining the suggested concept and related terminology, its geographical logics are outlined. Then major conceptual pillars of sectoral resilience are depicted, relating to six major, partly interdependent process fields. For each of them, mechanisms of shock adaptation of an industry sector and major factors of inter-sectoral distinctions of resilience patterns are pointed out, briefly illustrated by the examples of the automotive and mechanical engineering sectors. The approach helps us better understand industry-specific features of crisis adaptation and intersections of regional and corporate logics of resilience.     

Out of the crisis: an empirical investigation of place-specific determinants of economic resilience

This article attempts to isolate the structural characteristics that affect the resilience of a regional economy. It focuses on the role played by related/unrelated variety and differentiated knowledge bases as drivers for regional resilience and originally explores their interdependences. Italy is the empirical setting, and Italian local labour systems the unit of analysis. Regional resilience is measured as growth of the employment rate after the Great Recession that began in 2008. Results confirm the importance of related variety and of differentiated knowledge bases as drivers for regional resilience. We found support of the creative capacity of culture argument, providing evidence that a moderate concentration in symbolic knowledge-based economic activities contributes to resilience. Synthetic and analytical knowledge-based activities provide positive and no support to regional resilience, respectively. Finally, the relatedness of the symbolic knowledge-based activities increases regional economic resilience. Some policy implications are then derived from these findings.     

A Flexible Mathematical Programming Model to Estimate Interregional Input–Output Accounts*

Abstract. This study implements and tests a mathematical programming model to estimate interregional, interindustry transaction flows in a national system of economic regions based on an interregional accounting framework and initial information of interregional shipments. A national input–output (IO) table, regional data on gross output, value‐added, exports, imports, and final demand at sector level are used as inputs to generate an interregional IO account that reconciles regional economic statistics and interregional transaction data. The model is tested using data from a multiregional global IO database and shows remarkable capacity to discover true interregional trade patterns from highly distorted initial estimates.     

A NEW APPROACH TO MODELING THE IMPACT OF DISRUPTIVE EVENTS

This paper develops a new methodology to predict the interregional and interindustry impacts of disruptive events. We model the reactions of economic agents by minimizing the information gain between the pre‐ and postevent pattern of economic transactions. The resulting nonlinear program reproduces, as it should, the pre‐event market equilibrium. The methodology is tested further by means of a comparison of this base scenario with two regional production shock scenarios and two interregional trade shock scenarios. The outcomes show a plausible combination of partially compensating demand, supply, and spatial substitution effects, which justifies the further development, testing, and application of this new approach.     

Regional Policy and the 'Regionalization' of University-Industry Links: A View from the English Regions

As several senior figures in UK Government have recently professed to want to promote the knowledge-driven economy across the nation, discussion of university-industry ties in less-favoured regions is particularly salient. This account documents how UK central government efforts to encourage greater university-industry links have increasingly taken on a regional dimension but then stresses that these efforts do not constitute a 'regional policy' (in the traditional sense of measures that seek to reduce interregional economic disparities). This activity is then set within the context of overall Government and European Union (EU) funding to universities which is also at odds with stated government aims of lessening regional economic disparities. The article goes on to highlight how mainstream regional policy, particularly that of the European Commission, has seen considerable support for university-industry activity in the regions but has faced an uncertain future due largely to the spectre of fund-draining EU expansion. The article concludes by asking what policies might be pursued for university-industry links to be increased in weaker regions. The underlying aim of the article is to contribute towards raising the profile of universities in debates about reducing interregional economic disparities (that must, in turn, be much higher on the public policy agenda).     

Border-regional resilience in EU internal and external border areas in Finland

European border regions have witnessed a long history of remarkable mobility shocks stemming from complex ecological and economic changes and geopolitical events. The experience of near-continuous regional and global crisis has increased interest towards the idea of resilience, that is, the ability of communities and regions to adapt and cope with disturbances and transitions. Inspired by the literature of regional resilience and the evolutionary approach, this paper will examine the difference that borders and geopolitical conditions make from the perspective of regional resilience and especially ‘border-regional resilience’. Particular focus will be on irregular cross-border mobilities and consequent transitions in EU external and internal border towns, here the Finnish towns of Lappeenranta and Tornio. The study points out that the geopolitical environment and the openness of the border partly determine the regional development trajectories and the ways of coping with cross-border mobility-related changes. Although the border location entails some vulnerability, formal and informal cross-border institutions and relations of trust are of crucial importance from the perspective of border-regional resilience. The paper proposes a research agenda for studying border-regional resilience in the context of environmental, economic and social changes and geopolitical events.