DIRECTIONS FOR DIVERSIFICATION WITH AN APPLICATION TO SASKATCHEWAN*

ABSTRACT. Traditional models of regional diversification do not capture the trade-off between stability and living standards. In this paper, we characterize regions as open activity models subjected to both productivity and price shocks. We then partially rank small diversification policies by the direction in which they point away from the current industrial structure in mean-variance space. Some general patterns emerge. In particular, diversification for regional self-sufficiency and away from regional comparative advantage may be undesirable.     

UNDERSTANDING LOCAL CONTENT DECISIONS: ECONOMIC ANALYSIS AND AN APPLICATION TO THE AUTOMOTIVE INDUSTRY*

ABSTRACT In industrializing regions, foreign investments often generate spillovers through regional backward links. This situation may create a gap between private and social valuations of resources, resulting in a level of local content below what would be optimal for the economy. This situation creates an opportunity for the enactment of domestic content regulations. This paper presents a model to understand how these policies condition the decisions of the economic agents and affect economic welfare. Then, it simulates the model using a case study of the automotive sector. Results suggest that, in certain conditions, this local content regulation can be welfare enhancing.     

BAYESIAN MODEL AVERAGING IN THE CONTEXT OF SPATIAL HEDONIC PRICING: AN APPLICATION TO FARMLAND VALUES

ABSTRACT Specification uncertainty arises in spatial hedonic pricing models because economic theory provides no guide in choosing the spatial weighting matrix and explanatory variables. Our objective in this paper is to investigate whether we can resolve uncertainty in the application of a spatial hedonic pricing model. We employ Bayesian Model Averaging in combination with Markov Chain, Monte Carlo Model Composition. The proposed methodology provides inclusion probabilities for explanatory variables and weighting matrices. These probabilities provide a clear indication of which explanatory variables and weighting matrices are most relevant, but they are case specific.     

SPATIAL ASYMMETRIC DUOPOLY WITH AN APPLICATION TO BRUSSELS' AIRPORTS*

ABSTRACT In this paper, the problem of a city with access to two firms or facilities (shopping malls, airports, commercial districts) selling a differentiated product (shopping, flights) and/or offering a differentiated workplace is studied. Transport connections to one facility are congested. A model is presented for this asymmetric duopoly game that can be solved for a Nash equilibrium in prices and wages. A comparative statics analysis is used to illustrate the properties of the equilibrium. A numerical model is then applied to the two Brussels airports. Three stylized policies are implemented to address the congestion problem: expansion of transport capacity, congestion pricing, and a direct subsidy to the uncongested facility. Our results indicate that the degree of intrinsic differentiation between the two firms is crucial in determining the difference in profit and market share. Price and wage differences also depend on trip frequency and consumer preferences for diversity. Congestion pricing is the most effective policy tool but all three options are shown to have attractive attributes.     

MODELING SPATIAL AUTOCORRELATION IN SPATIAL INTERACTION DATA: AN APPLICATION TO PATENT CITATION DATA IN THE EUROPEAN UNION*

ABSTRACT Spatial interaction models of the gravity type are widely used to model origin–destination flows. They draw attention to three types of variables to explain variation in spatial interactions across geographic space: variables that characterize an origin region of a flow, variables that characterize a destination region of a flow, and finally variables that measure the separation between origin and destination regions. This paper outlines and compares two approaches, the spatial econometric and the eigenfunction‐based spatial filtering approach, to deal with the issue of spatial autocorrelation among flow residuals. An example using patent citation data that capture knowledge flows across 112 European regions serves to illustrate the application and the comparison of the two approaches.     

中国旅游业地域不平衡分析

由于多种因素:中国自然地理条件、社会历史文化、经济状况等的区域差异,使我国旅游业表现出地域差异。因此本文根据三大地区的划分,着重比较了各地区的供给与需求的差异,并分析了其差异性的根源。在旅游供给的地域不平衡部分,对旅游供给的四个部分:旅游资源及其开发阶段与趋势、旅游设施、旅游服务、旅游基础设施进行分析。在需求的地域不平衡部分,对国内旅游、海外旅游、出境旅游逐个进行了分析。最后提出了我国区域旅游业发展的策略。