THE EFFECTS OF COLLATERALIZABLE INCOME AND DEBT OVERHANG ON ENTREPRENEURIAL INVESTMENT IN AN OPEN REGIONAL ECONOMY*

ABSTRACT We use a two‐period model to analyze the contractual relationship between entrepreneurs and venture capitalists in an open regional economy. First, we describe the first best investment contract, we study the second best investment contract in the presence of private information, and then we examine the impact of an exogenous second‐period income endowment (collateralizable income) on investment by entrepreneurs. Next, we analyze the interaction between entrepreneurs and venture capitalists when the regional government (RG) must pay off a per capita debt (debt overhang) which it finances by taxing successful second‐period entrepreneurs. We show that a rise in the per capita debt has an effect on investment that is analogous to a fall in the second‐period income endowment. In addition, the overhang of the RG's debt discourages entrepreneurial investment.     

THE EFFECTS OF METROPOLITAN JOB GROWTH ON THE SIZE DISTRIBUTION OF FAMILY INCOME*

ABSTRACT. This article examines how a metropolitan area's job growth affects its income distribution, using CPS data from 1979 to 1988. Metropolitan growth increases the poorest quintile's income by a greater percentage than for the average family. Metropolitan growth also increases the value of property owned by the richest quintiles. Economic development programs to increase local growth will have a net progressive effect if the cost per job created is low, and these costs are financed by personal taxes. But programs with a high cost per job, or financed by cutting welfare, will reduce the net income of the poorest quintile.     

THE EFFECTS OF REGIONAL SCIENCE AND TECHNOLOGY POLICY ON THE GEOGRAPHIC DISTRIBUTION OF INDUSTRIAL R&D LABORATORIES*

ABSTRACT. The determinants of the geographic distribution of industry R&D activity are examined with particular emphasis on the role of university research as well as state science and technology programs. An analysis of a cross section of metropolitan areas indicates that industry R&D labs are located in areas with state science and technology programs, as well as in areas with higher levels of university research, larger quantities of non-welfare related local government spending, a better educated workforce, and a greater population density.     

基于不同区划系统的中国区域经济差异分解研究

基于不同区划系统,采用锡尔系数分解方法来定量测度中国区域经济差异。首先,基于省级空间单元,通过一阶段锡尔系数分析1978年以来中国区域差异的格局及其动态演变;然后,分别基于三大地带--省(直辖市、自治区)--地(市、区、自治州)或者县(市辖区、县级市、县)这两类三级结构的地域行政单元,运用二阶段嵌套锡尔系数分解方法,将差异进一步分解至省内差异水平上,由此揭示出不同于省际分析的区域经济差异特征:省内差异是全国总体差异的重要组分,对于总体差异的影响较地带间差异和省间差异显著得多。     

EXITS FROM HOMEOWNERSHIP: THE EFFECTS OF RACE,ETHNICITY, AND INCOME*

ABSTRACT This paper examines the extent to which populations experiencing low homeownership rates in the U.S. also experience high homeownership exit rates. We determine whether low‐income Hispanic and black households that achieve homeownership are as likely as white and high‐income households to sustain it. Using the Panel Study of Income Dynamics spanning the years 1970–2005, we find that low‐income homeowners consistently have higher homeownership exit rates, Hispanic households have higher raw exit rates prior to but not subsequent to 1997, and a black/white sustainability gap appears to arise post‐1997.     

REGIONAL LABOR PRODUCTIVITY IN THE NETHERLANDS: EVIDENCE OF AGGLOMERATION AND CONGESTION EFFECTS*

ABSTRACT This paper studies the impact of localization, urbanization, and diversification on regional labor productivity levels and growth. We find substantial effects, accounting for roughly half of the explained variation in the labor productivity differences within the Netherlands in the 1990s. Diversification, urbanization, and localization effects are significant and positive for productivity levels. These levels appear cointegrated. The error correction specification of productivity growth surprisingly reflects negative agglomeration effects. From the theoretical model it follows that congestion effects must have taken precedence over agglomeration effects during this period. Both agglomeration and congestion effects are dampened by job density in neighboring regions. Finally, policy simulations with the estimated model show that spatial concentration is more harmful to national productivity growth than spatial dispersion.     

TRANSBOUNDARY INCOME AND EXPENDITURE FLOWS IN REGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Nearly all regional input-output models have been constructed without a proper accounting of inflows and outflows of personal income and personal consumption expenditures. Typically invoked is a no cross-payments assumption, analogous to the no cross-hauling assumption for commodities. We present a new accounting framework based on the classification of flows according to the location of income generation, receipt, and spending, and argue that only flows endogenous in all three respects should be part of a closed regional I-O model. We use the framework to compute the upward bias in multipliers in a typical regional I-O model. We also present several methods for estimating transboundary flows.     

EDUCATION AND INCOME INEQUALITY IN THE REGIONS OF THE EUROPEAN UNION*

ABSTRACT This paper provides an empirical study of the determinants of income inequality across regions of the EU. Using the European Community Household Panel dataset for 102 regions over the period 1995–2000, it analyses how microeconomic changes in human capital distribution affect income inequality for the population as a whole and for normally working people. The different static and dynamic panel data analyses conducted reveal that the relationship between income per capita and income inequality, as well as between a good human capital endowment and income inequality is positive. High levels of inequality in educational attainment are also associated with higher income inequality. The above results are robust to changes in the definition of income distribution and may be interpreted as a sign of the responsiveness of the EU labor market to differences in qualifications and skills. Other results indicate that population ageing, female participation in the labor force, urbanization, agriculture, and industry are negatively associated to income inequality, while unemployment and the presence of a strong financial sector positively affect inequality. Finally, income inequality is lower in social‐democratic welfare states, in Protestant areas, and in regions with Nordic family structures.