FIRM HETEROGENEITY,MULTIPLANT CHOICE,AND AGGLOMERATION

We examine the organization and location choice of heterogeneous firms in a two‐region economy. When some high‐productivity firms engage in multiplant production, a reduction in transport costs causes two changes in a small region: the closure of plants by high‐productivity multiplant firms and the relocation of low‐productivity single‐plant firms to the region. In the presence of high‐productivity multiplant firms, therefore, a decline in transport costs reinforces the spatial sorting of firms by productivity, enlarging the productivity gap between large and small regions. Conversely, reducing investment costs weakens the spatial sorting effects on regional productivity disparities.     

Place‐based policies,firm productivity,and displacement effects: Evidence from Shenzhen,China

Developing and transitional countries devote considerable funds to selected areas to stimulate local growth and firm productivity. We examine the impact of place‐based interventions due to the opening of science parks in Shenzhen, China, on firm productivity and factor use. Our identification strategy, exploiting spatial and temporal differencing in firm‐level data, addresses the issues that (a) the selection of science park locations is not random and (b) high‐productivity firms sort themselves into science parks. Firm productivity is approximately 15–25% higher due to the science park policy. The policy also increases local wages and leads to distortions due to job displacement.     

Heterogeneous impacts of China's economic and development zone program

This paper examines the impact of economic and development zones (EDZs) on the productivity of incumbent firms in China. To deal with the selection issue, I first take into account potentially different selection mechanisms across two popular types of EDZs—economic and technological development zones (ETDZs) and high‐tech development zones (HTDZs)—by relying on multiple treatment propensity scores matching techniques. Next, I apply the difference‐in‐differences estimator to the matched sample and conduct an event study analysis. The results show that the respective effects of ETDZs and HTDZs on firm productivity are positive, but subject to a nonlinear trend over time. The size of the productivity gains depends critically on the type of EDZ, however. A new HTDZ (ETDZ) leads to an average productivity gain of up to 30.2% (18.4%) for incumbent firms in the 5 years after the zone was created. These findings suggest that the size of productivity spillovers for spatially targeted firms differ quite significantly depending on the strategic development and policy goals of the EDZ: HTDZs that focus on promoting indigenous‐based factors of learning lead to higher productivity spillovers compared with ETDZs that focus on promoting extra‐local linkages.     

GROWTH,FOREIGN DIRECT INVESTMENT,AND THE ENVIRONMENT: EVIDENCE FROM CHINESE CITIES

ABSTRACT In this paper, we investigate the relationship between economic growth and industrial pollution emissions in China using data for 112 major cities between 2001 and 2004. Using disaggregated data, we separate foreign direct investment inflows from Hong Kong, Macao, and Taiwan from those of other foreign economies. We examine two industrial water pollution indicators (wastewater and petroleum‐like matter) and four industrial air pollution indicators (waste gas, sulfur dioxide, soot, and dust). Our results suggest that most air and water emissions rise with increases in economic growth at current income levels. The share of output of domestic‐ and foreign‐owned firms increases several pollutants in a statistically significant manner while output of firms from Hong Kong, Macao, and Taiwan either reduces pollution or is statistically insignificant.     

NEW FRONTIERS OF IMMIGRATION RESEARCH: CITIES AND FIRMS*

ABSTRACT The increase in international migration to rich countries during the last two decades has spurred research and policy questions. The economic determinants of national and international migrations and the impact of immigrants on labor markets have been investigated by economists, geographers, and regional scientists for a long time. Recently, however, the availability of new and detailed individual data on migrants across regions and localities in several countries has made it possible to analyze the impact of immigration on a richer set of socio‐economic outcomes. Two avenues of research have emerged as particularly interesting and are the focus of this special issue. First, international migrants are particularly concentrated in urban areas but their impact on some outcomes that are particularly relevant in cities (such as crime and housing markets) are not well understood yet. Second, immigrants not only increase labor supply but also affect firms’ productivity, survival and growth through their impact on localized externalities. These two themes link all the contributions of this special issue and show new directions for future research on the impact of immigration.     

DOES FIRM OWNERSHIP AFFECT SPILLOVER OPPORTUNITIES? EVIDENCE FROM CHINESE MANUFACTURING

The clustering of economic activity is believed to generate both positive own‐industry (localization) spillovers and negative competitive pressures. Using data on manufacturing enterprises operating in China during 1998–2006, this paper provides evidence on the net effect of opposing spillovers from nearby economic activity. Central to the analysis is the opportunity to distinguish local manufacturing enterprises by state, private, or foreign ownership. Systematic differences in average productivity of these firms enable inferences about differences in the strength of spillovers from one type of firm to another type. Results indicate that spillovers are larger within the same ownership type than they are across them, consistent with localization economies that operate within segmented channels of influence.     

FIRM PRODUCTIVITY AND INSTITUTIONAL QUALITY: EVIDENCE FROM ITALIAN INDUSTRY

This paper aims to contribute to the debate on the determinants of differentials in firms’ productivity. We test the hypothesis that macro factors, especially the quality of local institutions, play a central role in explaining firm productivity in Italy. To this end, we construct measures of Total Factor Productivity (TFP) for about 4,000 firms by means of different estimation techniques, and a province‐level index of institutional quality. Then, we estimate the relationship between institutional quality and firm‐level TFP. Our results show that the existence of better local institutions might help firms to become more productive.     

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.     

ECONOMIC IMPACTS OF CULTURAL DIVERSITY IN THE NETHERLANDS: PRODUCTIVITY,UTILITY, AND SORTING*

ABSTRACT This paper identifies the impact of cultural diversity on local economies, by explaining spatial disparities in wages and housing prices across Dutch cities using unique individual panel data of homeowners during the period 1999 and 2008. We distinguish between the effects of spatial sorting based on individual heterogeneity, interactions‐based productivity effects, and consumer amenities while controlling for interactions between the labor and housing market. In line with previous literature, we find a positive effect of cultural diversity on average housing prices. After controlling for spatial sorting, the effect of cultural diversity on housing prices is negative. The negative impact of cultural diversity on local housing markets is likely driven by a causal effect between the presence of immigrants and neighborhood quality that outweighs a positive effect of immigrant‐induced diversity in consumption goods.     

TRAFFIC CONGESTION,POLYCENTRICITY, AND INTRAURBAN FIRM LOCATION CHOICES: A NESTED LOGIT MODEL FOR THE LOS ANGELES METROPOLITAN AREA

This study empirically investigates traffic congestion effects on agglomeration through the lens of firm location decisions. A discrete choice model is applied to examine new establishments’ location choices within the Los Angeles metropolitan area. Employment centers are defined as the choice set to explore the nature and role of intraurban agglomerations. The results show that metro‐wide congestion negatively affects the location choices of firms in the high‐order office‐related activities, while local congestion have positive impacts on those firms’ location decisions. In contrast, firms in production‐related activities are positively influenced by regional congestion but are negatively affected by local congestion levels.     

Crime,collective action and development

Starting from a definition of criminal activity for economic purposes broader than the criminological concept of economic crime, and from an assessment of its empirical importance, the article considers: 1) the relationship between criminal behaviour and economic behaviour, on the hypothesis that criminal activity can in large part be viewed as a component of the broader category of economic activity;the negative effects of crime on the performance of markets and economic systems; The basic hypothesis is that when the social damage caused by crime is assessed, and consequently when the suitability and extent of punitive action is evaluated, the costs/benefits analysis must be extended to include the structural repercussions of crime on collective action and on the supply of public goods. This signifies that a substantial part of the harmful effects of crime affects the long-term competitiveness of local areas or systems, in particular by acting on the so-called non-material production factors, such as human capital, social capital and entrepreneurship. This consequence is particularly serious where the organized crime is able to exert control over a given territory and influence its patterns of development.     

DO FLOODS HAVE PERMANENT EFFECTS? EVIDENCE FROM THE NETHERLANDS

This study investigates the short‐ and long‐run impact on population dynamics of the major flood in the Netherlands in 1953. A dynamic difference‐in‐differences analysis reveals that the flood had an immediate negative impact on population growth, but limited long‐term effects. In contrast, the resulting flood protection program (Deltaworks), had a persisting positive effect on population growth. As a result, there has been an increase in population in flood‐prone areas. Our results suggest a moral hazard effect of flood mitigation leading to more people locating in flood‐prone areas, increasing potential disaster costs.     

Culturally clustered or in the cloud? How amenities drive firm location decision in Berlin

Creative firms are neither capital‐ nor land‐intensive in production. They predominantly rely on creative and specialized labor and, assuming a strong competition for workers, are therefore increasingly dependent on the location of their (potential) employees. If these creative and highly qualified employees are attracted by consumption amenities such as bars, clubs, and restaurants, then it follows that these same amenities may determine the location of creative service firms. I investigate this hypothesis by examining whether Berlin Internet start‐up firms locate in urban amenity‐rich places. Identification builds on the fall of the Berlin Wall. A 1 percent increase in amenity density raises the probability of a start‐up location by almost 2 percent. A comparison with other service industries suggests that amenities are significant to the location choice of creative sectors, whereas no effect can be observed for nonreative firms.     

Firm-level productivity growth returns of social capital: Evidence from Western Europe

We analyze the firm-level labor productivity growth returns of social capital—defined as a synthetic measure of “generalized trust,” “active participation,” and “social norms”—using a large sample of manufacturing firms in France, Germany, Italy, Portugal, and Spain. We find that firms' labor productivity growth is higher in areas with a better social capital endowment. The positive returns of social capital are, nevertheless, unevenly distributed across firms, with smaller, less productive, less capital-endowed, and low-tech firms benefitting the most from operating in strong social capital ecosystems.     

TECHNOLOGICAL CATCH‐UP AND GEOGRAPHIC PROXIMITY*

ABSTRACT This paper examines productivity catch‐up as a source of establishment productivity growth. We present evidence that, other things equal, establishments further behind the industry frontier experience faster rates of productivity growth. Geographic proximity to frontier firms makes catch‐up faster. Our econometric specification implies a long‐run relationship between productivity levels, where nonfrontier establishments lie a steady‐state distance behind the frontier such that their rate of productivity growth including catch‐up equals productivity growth at the frontier. We use our econometric estimates to quantify the implied contribution to productivity growth of catch‐up to both the national and regional productivity frontiers.     

产业联系与外资溢出效应-对浙江省制造业的实证研究

本文探讨水平联系、前向联系和后向联系对外商直接投资溢出效应的影响。利用浙江省制造业数据,通过实证分析发现,浙江省制造业外资总体上具有水平负向溢出效应,同时通过后向联系产生正向溢出效应。水平负向溢出效应主要是外资企业带来的激烈竞争所导致的,产业后向联系产生的正向溢出效应主要通过外资企业的本地采购发生。浙江省内资制造业企业并没有从购买外资企业中间投入品而显著提升效率。     

Cluster Dynamics: New Evidence and Projections for Computing Services in Great Britain*

Abstract. This paper tests some of the main hypotheses about the importance of horizontal clusters for the growth of employment in small firms using data from Computing Services in Great Britain. In the main section of the paper, spatial econometric models are estimated controlling for supply‐ and demand‐side conditions to isolate the effect of initial cluster intensity. The paper then projects cluster development using the fitted model, showing how clusters are likely to emerge and intensify. One aspect of the paper is the existence of a de‐clustering mechanism due to congestion effects.     

Supplier linkages of foreign-owned manufacturing firms in the UK: the influence of entry mode,subsidiary autonomy and nationality

This article tests the hypothesis that the supplier linkages which subsidiaries of foreign-owned companies make with indigenous firms in the UK are influenced by entry mode, the amount of autonomy which is granted to the subsidiary which is established and the nationality of the parent company. Data were collected from foreign-owned firms in the UK and an ordered probit model with the change in supplier linkages as the dependent variable was devised and tested. The results provide support for the hypothesis in terms of entry mode and subsidiary autonomy, but not in terms of parent nationality. This study represents a new approach to the study of supplier linkages and integrates concepts and studies from both regional science and international business. Foreign-owned firms which entered the UK by means of a greenfield entry tend to have a relatively positive effect on the creation and growth of supplier linkages, whereas those which entered by way of a merger or acquisition tended to have a relatively negative effect on the growth of such linkages. This finding has important implications for academics and policy-makers alike. Although the potential impact which the creation of supplier linkages can make upon the host country's economy has long been recognised, little research has been undertaken to identify the key factors which affect such growth. With increased levels of globalisation it is important that governments are able to maximise the impact which foreign direct investment makes upon the economy of their countries.     

(Un)related variety,urban milieu and tourism-company differentiation

High tourism growth in single-asset tourism cities is often associated with a standardization of supply of products and services by tourism entrepreneurs. However, and in contrast to this common-sense view, tourism growth in specific urban tourism milieus in the ‘sun-sea-sand’ tourism city of Antalya has stimulated tourism entrepreneurs to differentiate their products. Contrary to most economic-geography literature on spatial clusters, evolutionary economic geographers argue that inter-industry relations of (un)related variety are crucial in inter-firm differentiation. The aim of the paper is to define the factors that influence tourism-firm differentiation in the single-asset tourism city of Antalya. The empirical research is theoretically informed by evolutionary economic-geography literature, and pays much attention to the role different urban sub-milieus play in tourism-firm differentiation. It is the first research on the relation between (un)related variety and tourism-firm differentiation in tourism studies. The empirical research is based on primary data collected by a firm-level survey (hotels, restaurants, jewellery- and retail-trade firms) in the city of Antalya. The factors that influence tourism-firm differentiation are explored by using quantitative methods of analysis (an econometric logit-regression model and a correspondence analysis). The main result of the empirical research is that investments in firms in related sectors, in our case jewellery companies and hotels, are positively and significantly related to tourism-firm differentiation. In addition, the location tourism firms in areas visited by a mix of consumers (tourists and locals) also is positively and significantly related to inter-firm differentiation whereas urban milieus visited by locals only have a negative effect.     

The last laugh: Western Australia's elections and the executive state, 1983–89

Aside from bribery and corruption associated with the police and organized ‘vice and crime’, Mr Tony Fitzgerald Q.C. highlighted in his ‘Report’ five criteria as areas of concern over the health and future of parliamentary democracy in Queensland. They were: 1. Decline of Parliament in terms of (a) sitting hours, and (b) consistent refusal by the Premier and Ministers to answer parliamentary questions and to be fully accountable and responsible to Parliament for public expenditures, ministerial expenses and extra‐parliamentary executive decisions; 2. Business deals, joint ventures and other financial transactions between government, its agencies and government favourites; 3. Lavish funding of the governing political party by recipients of its favours; 4. Political ‘stacking’ of the public service; 5. Use of taxpayers’ funds by Premier and Ministers to finance writs against critics.