REGIONAL CAPITAL FORMATION IN U. S. MANUFACTURING DURING THE 1970s

ABSTRACT The study quantifies the impact of changes in input prices on regional net investment in manufacturing. A neoclassical investment model is estimated for the nation and three regions: North, South, and West. The data base is pooled state observations for the period 1974-78. The regional elasticities of net investment with respect to both input prices and the technology index are computed. The results indicate that net investment is mare sensitive to changes in input prices in the South and West than in the North. The biased technical change affects capital formation the mast in the West.     

A THEORETICAL EXPOSITION OF MIGRATION ENFORCEMENT ON EXISTING MIGRANT AND DOMESTIC HOUSEHOLDS*

ABSTRACT This paper presents a model with a domestic household and a heterogeneous migrant household in arrival timing. The domestic and documented migrant households divide their one unit of time between lobbying for/against immigration enforcement expenditures and employment. The analysis shows that an increase in public dislike for undocumented workers lowers domestic and existing migrant households private investment in own child education. It also causes average public expenditures on education to fall and leads to a negative impact on the educational outcomes of all households.     

Geographic and Network Neighbors: Spillover Effects of Telecommunications Infrastructure

This paper tests for spatial spillover effects of state-level telecommunications infrastructure investment on state output, using panel data for 48 U.S. states from 1970 through 1997. As information and communication technologies support more industrial locational freedom, states may use telecommunications infrastructure investment as a competitive tool for attracting factors of production. In a production-function framework, this effect would manifest itself as a negative output spillover effect from telecommunications infrastructure investment. Findings indicate that a state benefits from its own telecommunications infrastructure, but telecommunications investment by other states has a negative impact on its output growth path, and proximity amplifies this negative spillover effect.     

The Regional Allocation of Public Investment: Efficiency or Equity?

In this paper we examine the effect of public investment on the regional economies of Japan. The efficient policy for regional allocation of public capital is to invest in highly productive regions, whereas the actual policy pursues equity goals by allocating more public investment to depressed regions. We determine the effects of this equity- oriented allocation by estimating the aggregate regional production function and calculating the productivity of public capital stock for each region, using a cross-sectional time-series data set. Our results show that the marginal productivity of public capital has recently declined in most depressed regions, whereas the productivity in developed regions (e.g., Tokyo, Osaka) has increased slightly. We compare alternative policies of allocating public investment and their effects on the regional and national economies using numerical simulations. We then quantitatively describe the trade-off between the efficient and the equitable allocation of public investment.     

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.     

ASSESSING THE REGIONAL IMPACT OF GRANTS ON FDI LOCATION: EVIDENCE FROM U.K. REGIONAL POLICY, 1985–2005

ABSTRACT The paper implements a methodology for assessing the regional impact of investment grants on foreign direct investment (FDI) location, taking data for U.K. regional policy over the period 1985–2005. Using a Generalized Methods of Moments estimator it finds that each £25 million of grant changes the regional location of about six inward FDI projects. On average, projects have 150 jobs and each job diverted costs £27,500 (1995 prices). It also finds that the size of the area designated for grants has a positive location effect. The effect is small in relation to the overall scale of FDI, which may explain the weak grant effect found in recent plant‐based location studies.     

区域发展环境对农户投资行为的影响探究——巩义市100家农户的实例分析

通过对巩义市100家农户投资行为的调研分析发现:①区域发展环境对农户投资行为影响程度与路径不尽一致,经济环境对农户投资的影响比社会环境更直接;②随着经济社会发展水平提高,农户投资愿望更趋强烈、投资结构多元化,经济环境对农户投资影响逐步降低,社会环境的影响增强,且文化制度条件比收入水平对农户投资的促进作用更大;③不同区域发展环境下农户投资行为差异较大,积极开放的文化、制度环境促进农户投资;④农户投资受外部性影响相对较弱,区域特征明显。基于对农户投资行为的分析,提出加强农户投资能力建设与农区发展相关建议。     

Market Potential,Productivity and Foreign Direct Investment: Some Evidence from Three Case Studies

This paper aims at analysing the importance of local determinants to foreign direct investment (FDI) in three European regional case studies. The originality of the approach lies in the use of disaggregated data by sector and by region. The results are three-fold. First, regional demand and productivity are fundamental FDI determinants, confirming most studies with national data. Second, regional FDI inflows are more dependent on regional than national determinants. Finally, the effect of market potential measured with absolute gross domestic product (GDP) on regional FDI diminishes linearly with distance and does not when measured with GDP per capita.     

The effects of internal migration on regional wage and unemployment disparities in Canada

"This paper examines the role of the migration mechanism in the context of a general interregional factor flow adjustment model. Using an estimation technique, which pools cross-section and time series data, the direct effects of migration flows and regional investment on the growth of regional wages and unemployment [in Canada] are examined. The results suggest that migration has a small, but significant impact on regional wages and unemployment rates."     

Infrastructure shortfall in the United Kingdom: the private finance initiative and government policy

Investment infrastructure is essential for long term economic growth, sustainable regional economic development, and the quality of urban life. Yet the available evidence suggests a significant shortfall in current UK government investment on infrastructure, and a long term pattern of low investment compared to other European countries. Given the pre-occupation of the Labour government with managing expenditures within the parameters set by the previous government, and the vulnerability of any government to financial markets' valuation of current spending plans in relation to interest rates and currency exchange rates, there is little likelihood of major new public spending on infrastructure in the near future. In this context, the Private Finance Initiative (PFI) is very important for the government's plans to make up the shortfall. Although inherited from the previous Conservative government, the PFI has powerful advocates within the Labour government. The PFI is the formal mechanism by which government departments, agencies and instrumentalities, like the National Heath Service, utilise private sector investment capital and, in particular, pension fund assets, to revitalise public services. This paper sets out the institutional history of the PFI, beginning with the Thatcher government's Ryrie Rules, the efforts of the Major Conservative government to make it a viable operational practice, and the reasons why the new government supports PFI and has made significant moves to improve its effectiveness. Still we are sceptical about the future of the PFI. We show that the PFI has foundered upon fundamentally flawed design and the politicians' obsession with control of public sector spending. Notwithstanding recent `reforms', PFI may only succeed if the PFI process is decentralised and linked explicitly with regional development programmes. In any event, given the difficulties posed by the PFI process for private investors, perhaps different institutional responses to infrastructure shortfall should be contemplated, including the introduction of traded infrastructure bonds.     

基础设施投资与中国经济增长的地区差异研究

本文应用生产函数法和我国19962000年度混合数据,从全国各地区的层次进行分析,估计基础设施对经济增长的产出弹性,以及不同地域的显著性差异。得到的估计结果是基础设施投资的人均GDP产出弹性为0187;不同地域基础设施对经济增长的影响存在明显差异。本文分三部分。第一部分是引言,介绍了有关的研究文献;第二部分应用生产函数建立模型进行估计;第三部分是结论和政策建议。     

Regional Scientific Production and Specialization in Europe: The Role of HERD

This paper analyses the effects of R&D expenditure in the higher education sector on the scientific production across regions in Europe 15. Our research questions relate to the regional production of science and the role of academic R&D expenditures on regional scientific output. The results show that money affects the production of scientific results in regions. On average, we found different impacts and lags of R&D expenditure according to the level of regional development. Our findings also suggest that scientific specialization is a significant factor affecting scientific outputs, although its effects differ across disciplines and regions.     

投资环境研究述评

20世纪60年代以来,投资环境逐渐成为区域科学研究的新兴领域。投资环境是一个内涵丰富的概念,文章总结了以往投资环境的定义,分析了其理论基础。对三十余年来国内外在投资环境理论与方法研究上取得的进展进行了回顾,指出了国外关于投资环境研究的三个阶段。并对国内投资环境研究的六个重要领域进行评述。在此基础上,指出了投资环境研究中存在五大问题:投资环境学的理论研究薄弱,学科体系不完善;对象性投资环境研究缺乏;缺乏投资环境绩效评价研究;投资环境评价标准不统一,难以实现资源共享;投资环境评估缺乏动态性、预测性。同时,提出要在投资环境后评价、对象性投资环境评价、可持续投资环境、投资环境信息系统、投资环境评价产业化等方面深化研究。     

Multi-National Corporation Investment as an Object of State Economic Strategy

This paper discusses the attraction of multi-national corporation (MNC) investment as an emerging economic role for the state. First, the changing strategic environment of states is explored through consideration of the new importance of international investment and trade, the role of MNCs and the opportunities to shape the manufacturing and services structure which thus arise. Second, theories about MNC internationalisation are considered to identify strategic factors shaping their location decisions. The third section summarises recent findings on the economic attractiveness of states. The paper concludes with a brief survey of the approaches and organisational arrangements of states that have placed the pursuit of MNCs at the forefront of their development strategies.     

A dynamic phase transition model for spatial agglomeration processes

A nonlinear model of population migration is presented in order to provide a dynamic explanation for the formation of metropolitan areas. "In Section 2 the model is introduced in terms of the rate equations for the mean values of the regional population numbers with specifically chosen individual transition rates. Section 3 gives a survey of concepts and results for the convenience of the reader not interested in the details of the mathematical derivations. Section 4 derives the stationary solutions of the rate equations, that is, the equilibria of the system. Section 5 treats the time dependent solutions of the model equations focussing on the exact analytic solutions along so-called symmetry paths. Section 6 analyzes the dynamic stability of the symmetry path solutions and decides which stationary states are unstable and which are stable equilibrium states."     

Canadian foreign direct investment in the United States by type: mergers and acquisitions, greenfield, real estate, joint ventures and investment increases

This paper provides an overview of Canadian foreign direct investment (FDI) in the United States by type. Mergers and acquisitions (M&As), greenfield investments, joint ventures, real estate purchases and increases to existing investments are compared spatially, through time (using a data set that consists of transactions from 1977 to 1994) and by industrial classification. Over this study's time-frame, direct investors from Canada were most likely to perform a real estate or M&A transaction in the United States (and least likely to be involved in a joint venture). The most consequential years for real estate purchases were the 1970s and early 1980s; whereas M&A and greenfield transactions have gained in proportionate importance through time. M&As, greenfield and investment increases were most often enumerated as manufacturing transactions, but mining and consumer and business services were also very common. A series of bivariate regression models established that growing state economies significantly increased M&A, real estate, greenfield and investment increase activity from Canada. Relative regional specializations (as given by location quotients) provided additional spatial information. M&As formed a pattern of specialization that emphasized the Great Lakes region and also the central portion of the US (roughly following the Mississippi River). Greenfield and investment increase transactions favoured states along the east coast and those adjacent to the Canada-US border. Real estate investors were most attracted to the US south and extreme west.     

Do EU funds crowd out other public expenditures? Evidence on the additionality principle from the detailed Czech municipalities’ data

European Union (EU) funds flowing into budgets of public sector organizations of its member states should be additional to their nationally funded expenditures. To investigate this additionality principle systematically, we develop a new empirical method. Our main hypothesis is that some of the EU-funded projects are crowding out national public expenditures. Not being able to reject the hypothesis would be consistent with violating the additionality principle. To test the hypothesis, we examine how EU funding translates into actual spending of relatively comparable municipalities of the Czech Republic. We innovatively match the municipal authorities’ budgetary data on EU-funded expenditure projects with their other, nationally funded, expenditures. We find no systemic crowding out of national public expenditures by EU funds at the level of operational programmes in the Czech municipalities’ data, which is consistent with no evidence of violating the additionality principle. Nonetheless, going down to the municipal level enables us to show how the results can pinpoint individual cases of EU fund’s potential mismanagement in Czech municipalities. Overall, we provide the first evaluation of the additionality principle at the level of individual recipients of EU funds and in doing so we develop a methodological approach potentially applicable to other fund recipients.     

DEFENSE SPENDING AND STATE ECONOMIC GROWTH*

Little evidence is currently available on the regional growth effects of federal defense spending. In this study, econometric models for state personal income and manufacturing employment between 1976 and 1985 are specified and estimated. Pooled cross-sectional time-series data are used, and the estimation procedure corrects for serial correlation, heteroscedasticity, and contemporaneous cross-sectional correlation. The results indicate that aggregate defense spending has a positive effect on both growth measures. However, when defense expenditures are disaggregated, only investment-type outlays appear to consistently affect state economic growth.     

A Reexamination of Output Convergence in the U.S. States: Toward Which Level(s) are they Converging?

Abstract.  This paper reexamines the issue of output convergence among the 48 states in the continental United States. Implementing multiple panel data techniques to state per capita output during the period 1929–2001 reveals little evidence of stochastic convergence in all 48 states, but some evidence among collections of states at the regional level. This observation may suggest that output convergence in the United States has proceeded among geographically neighboring states rather than among distant states, notwithstanding the nearly complete integration of product and factor markets. Our findings appear to be robust to a subsample analysis, although the intensity of convergence varies with the choice of output measure and deflator. Industrial structures and geographic proximity are considered as potential explanations for the regional pattern of output growth dynamics.     

AN EXAMINATION OF STATE FOREIGN EXPORT PROMOTION AND MANUFACTURING EXPORTS*

ABSTRACT As a means of promoting economic development state governments are increasing their levels of support for export promotion; however, there has been virtually no statistical analysis of the effects of the state export promotion expenditures. The present study specifies and estimates a cross-section model in order to quantify the relationship between state export promotion and exports. The empirical analysis allows for the calculation of the export promotion elasticity of exports on a state basis. Two conclusions are that the rationale supporting export promotion expenditures is supported empirically and that there is much diversity among states for the estimated elasticity.