The Spatial Dispersion of Informal Investment at a Regional Level: Evidence from the UK

Although there have been various studies on the geographical specialization of venture capital in the UK, there remains a gap in the research on regional differences in the behaviour of those informal investors who make a significant contribution to the funding of entrepreneurial ventures. Utilizing a unique data set from the Global Entrepreneurship Monitor project, this study will estimate the level of informal investment activity across the different regions of the UK. The relationship between informal investment and early stage formal venture capital availability is also examined to determine which areas display the greatest funding gaps in the provision of equity finance. It shows that while formal and informal investments are heavily concentrated in highly prosperous areas such as London and the South East of England, informal investments make a larger relative contribution to early stage and expansion equity capital within poorer regions.     

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.     

Venture Investments in Israel—a Regional Perspective

This paper analyses the geographic distribution of venture investments in start-ups in Israel, using data for the period 1995–2004. The findings show that their location behaviour differs from that of high-tech activities: they show a pattern of “dispersed concentration” (as compared with a pattern of “concentrated concentration” of high-tech activity), with high levels of concentration in focal places, but at a commuting distance from the main metropolis. This is explained by the fact that venture investors also play the role of entrepreneurs and managers. The comparison between different types of venture investors shows that local venture capital funds lead to the heaviest concentration in the metropolis, in comparison with foreign venture investors. This heavy concentration of venture investments implies increasing regional gaps, with a minimal participation of peripheral regions, even those that enjoy some high-tech activity.     

Grounded capital: venture financing and the geography of the Internet industry, 1994-2000

Despite the rhetoric in the popular and business press trumpetingthe removal of ‘the limitations of geography’, anumber of researchers have demonstrated that rather than simplydispersing, the Internet in fact exhibits an uneven spatialpattern throughout the United States and world. Using a combinationof interview and regression methodologies, this article arguesthat the regional distribution of venture capital investingplayed a central role in determining the location of new Internetstartups. This was largely due to the premium that entrepreneursplaced on one of the hallmarks of venture capital, i.e. speed,and the reliance of venture capitalists upon local networksand knowledge for their investments. The ability to providethese types of value-added inputs in a timely manner is greatlyassisted by geographic proximity. Rather than being an easilymoved and fungible commodity, venture capital investing dependsupon non-monetary inputs such as knowledge about possible investmentsand prefers to be close to companies in order to monitor andassist them. Thus, despite telecommunications technologies andglobal financial markets that have vastly expanded the geographicrange of economic interaction, regions remain central to economicdevelopment in the current economy.     

The Development of Geographical Specialization of Venture Capital

Many regions have realized that access to capital is an important prerequisite for establishment and growth of businesses, and have therefore focused policies to ensure an adequate supply of risk capital. The growth of the venture capital industry in the 1990s put pressure on venture capital firms (VCFs) to act more strategically. Many VCFs have thus specialized along one or more dimensions: certain industries, stages of development of the firm, or geographical areas. A theoretical dichotomy is developed in this paper to explain regionally focused venture capital. A competence-based theoretical view sees increased competition in the industry as promoting the growth of geographical specialization, while, according to financial theory, it would lead to diversification in order to spread risk. The empirical analysis illustrates the development in the average distance between VCFs and their Danish portfolio firms. All venture capital investments are included. Findings suggest that the process of geographical specialization follows an inverted V-shaped curve. This is interpreted in light of the developments in competition and in the competencies in the market. VCFs search broadly for investment opportunities in the first phase of the emergence of the venture capital industry, but when competition increases they tend to confine themselves to investments within a closer geographical distance. The implications of these findings are important both for funds-of-funds, regional governments, and VCFs.     

1982-2000年中国人力资本受教育程度空间变化研究

1982-2000年三次人口普查反映中国人口受教育程度具有较大的变化,但其在时空上分布具有其特点:在时间上大学、高中非义务教育人口增长速度呈加速趋势,人口的受教育程度在质和量的明显改善;在空间上具有南北、东西发展差异,以东西差异为主,东西地带性差异比南北地带性差异大,人口的受教育程度空间差距正在逐渐缩小,南北差距的收敛速度快于东西。在运动趋势上,1980年代受教育人口的运动趋势与经济运动方向一致,1990年代出现受教育人口的运动趋势与经济运动方向在南北方向一致,而东西方向相反的趋势。     

SOVIET ASIAN-PACIFIC TRADE AND THE REGIONAL DEVELOPMENT OF THE SOVIET FAR EAST

During the 1970s and early 1980s it was generally accepted, by both Soviet and Western specialists, that in the Soviet Far East the expansion of exports to the nations of the Pacific Basin offered a solution to the region's economic problems. However, recent policy statements suggest the rejection of this export-led development strategy. This study examines the changing structure and dynamics of Soviet trade with the Asian-Pacific region. At present, for a combination of economic and political reasons, Soviet trade with the Asian-Pacific region is dominated by exports of machinery and equipment and petroleum to the socialist nations of the region, inasmuch as Japanese demand for Soviet natural resources is stagnant. Therefore, because of the resource orientation of the Far Eastern economy, contemporary trade relations do not favor the expansion of the Soviet Far Eastern export base. Consequently, the future role of the region in the national economic system will be determined largely by the availability of domestic capital investment funds.     

Anchoring of Firms in the Neighbourhood: Does Local Social and Physical Order Affect Local Firms' Investment Strategies?

An increasing number of small- and medium-sized firms, whose low relocation propensity seems to point to strong local anchors, have moved to residential neighbourhoods. On the one hand, the neighbourhood context, an attractive production milieu with rich social network potential, may enable entrepreneurs to increase investments in either human capital (personnel) or physical capital (premises, production goods). These investments further anchor firms in a neighbourhood, where they contribute to a thriving local economy. On the other hand, high crime rates, a deteriorated physical environment and a lack of social capital can discourage entrepreneurs from investing locally. In this study, we conducted a multilevel analysis on the relative contribution of neighbourhood characteristics to entrepreneurial investment strategies and controlled for firm and entrepreneur characteristics. We found that neighbourhood cohesiveness and liveability—but not local market characteristics—make a small but significant contribution to explaining local entrepreneurs' investments. This contribution is even stronger for the smallest firms. Therefore, a spatially targeted policy aimed at improving social cohesion and safety is likely to benefit both residents and small local firms.     

Empire,Colonial Enterprise,and Speculation: Cape Breton’s Coal Boom of the 1860s

ABSTRACT

During the 1860s Cape Breton Island’s Sydney coalfield, at the northeastern tip of Nova Scotia, experienced dramatic economic expansion. Historical interpretation of this understudied coal boom has emphasised the transition towards a liberal era of competition and growing dependence upon American capital and markets. This article presents a revised interpretation, and reflects a renewed engagement with empire in the writing of the history of Canadian capitalism. Drawing upon the work of James Belich and John Darwin, it locates this coal boom in an evolving and expanding ‘Angloworld’ and ‘British world-system,’ and demonstrates how the Sydney coalfield was shaped by the social and economic configurations that developed in the region under the British Empire. During this period, established colonial elites captured coal property and sought to integrate Cape Breton coal into the Atlantic economy in which their region had historically operated. They treated coal as a new commodity to trade and profit from, but coal mining required the mobilisation of credit and infrastructure expenditures that exceeded what was typically required to participate in the region’s traditional staples trades. Large fixed investments engendered economic and political commitments that spurred growth even under highly volatile circumstances, as promotion and speculation drove growth from the supply side and attracted London capital. Overcapacity, ruinous competition, and social crisis eventually resulted, as the Atlantic economy that gave rise to the boom fell apart. This episode reveals the operation of colonial networks and an ‘empire effect’ that produced a distinctive pattern of development on the Sydney coalfield whose legacy would be lasting.     

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.     

Promoting Investment in Russia's Regions

The paper, based on extensive field interviews in 2009, examines regional investment policies in Russia, focusing on the Novgorod and Kaluga regions. The author, a Finland-based geographer specializing in Russia's economy, argues that some Russian regions (including the ones not well endowed with natural resources) can succeed in promoting investments despite the generally unfavorable economic environment. He also questions the ability of so-called regional "growth machines" to be sustained over the long term, by contrasting the cases of Novgorod and Kaluga, whereby Novgorod represents a region transformed from a leader in promoting investment into a corrupted autarchic regime. Kaluga, on the other hand, is presented as a successful region on the basis of an innovative but somewhat risky investment promotion strategy.     

DESIGN SPACES: AGGLOMERATION AND CREATIVITY IN BRITISH DESIGN AGENCIES

Although there is a growing body of research into the cultural and creative industries, little work has focused specifically upon on the geography of design and its role in regional economies. The relative neglect of the geography of the UK design industry is surprising given recent assertions about the sector's role in national economic competitiveness; its contribution to product innovation; and its importance as an urban regeneration resource. This paper explicitly considers the extent to which existing conceptualizations of agglomeration and creativity provide insights into the realm of design. Our discussion reflects upon recent surveys of the design sector and analyses current design organization membership data, both of which reveal an overwhelming concentration of design activities in London and the South East. Our analysis of the strategies, organization and practices of agencies in London reveals that a number of the key features associated with cultural industries in general are significantly less discernible within design.     

The German-Owned Manufacturing Sector in the North-East of England

The north-east of England is one of the most successful regions in attracting foreign investment in the UK-Germany being the most important European investor. This article seeks to provide a detailed account of the underlying motives and linkage effects of German direct investment in the manufacturing sector in the north-east of England. The study of 19 of the 29 German-owned manufacturing companies found that market-orientation was by far the most important pull-factor. The direct effects in terms of associated jobs and capital spending created a solid and persistent structure with six companies even expanding. However, to be more beneficial to the restructuring of the regional economy the existing linkages of the German-owned manufacturing sector have to be consolidated and additional networks built up. A separate discussion of the rise and fall of the Siemens semiconductor plant at Wallsend reveals the volatility of flagship investments and stresses the need for a regional industrial policy combining Foreign Direct Investment (FDI) with endogenous economic development.     

外资流动的动力学研究——以广东省为例

资本流动受推力、引力和阻力作用,在空间上先向中心城市和交通干线集聚,然后沿城市体系和交通干线作"蛙跳"式、点线式推进,最后向乡村面状扩散。资本流动对流入地区产生正负两方面的影响。投资环境建设和引资工作应针对不同阶段资本流动的特点和驱动因素,采取相应的政策,调控外资流动,减少负面影响,使利用结构合理化。     

The Role of Universities in Regional Development: Conceptual Models and Policy Institutions in the UK,Sweden and Austria

The literature on universities’ contributions to regional development is broad and diverse. A precise understanding of how regions may draw advantages from various university activities and the role of public policy institutions in promoting such activities is still missing. The aim of this paper is to provide a framework for analysing universities’ contributions to regional economic and societal development in differing national contexts and the policy institutions that underpin them. To do this, we review four conceptual models: the entrepreneurial university model, the regional innovation system (RIS) model, the mode 2 university model and the engaged university model. The paper demonstrates that these four models emphasize very different activities and outputs by which universities are seen to benefit regional economy and society. It is also shown that these models differ markedly with respect to the policy implications and practice. Analysing some of the public policy imperatives and incentives in the UK, Austria and Sweden, the paper highlights that in the UK, policies encourage all four university models. In contrast, in Sweden and Austria, policy institutions tend to privilege the RIS university model, whilst at the same time, there is some evidence for increasing support of the entrepreneurial university model.     

The Interregional Location of Foreign Investors in Turkey

There are several dynamic factors that contribute to the reinforcement of the commercial relationships of Turkey. That is to say not only the strategic regional importance of Turkey, placed on the axis extending from the Far East to the Mediterranean side, Middle East and Europe, but also the new opportunities arising from the continuously developing relationships with the Balkan countries and the newly-established Turkish Republics, since the beginning of the 1990s, have been strengthening Turkey's commercial contacts. Istanbul has the communication networks and infrastructure required to develop into a regional centre. The major investments made in the communication sector during the 1980s have acted to develop the telecommunications infrastructure, thus supporting Istanbul's development into a regional communications centre. Today Istanbul has one of the world's most developed telecommunications infrastructures and this has given the city advantages in terms of expanding into international markets.     

区域生态经济规划若干问题研究

区域生态经济规划的研究工作在我国始于20世纪80年代,起步较晚,仍处于初级阶段。本文从规划的主要对象、指导思想、理论依据、追求目标、所处阶段等方面比较了区域生态经济规划的差异,指出区域生态经济规划必须遵循整体性、区域性、市场经济、技术进步与创新、三效益并重统一、以人为本等基本原则,论述了区域生态经济规划的基本内容和编制程序,最后对编制好区域生态经济规划提出了三条建议,即:①加强领导,组织强有力的规划队伍;②抓住关键问题,不要面面俱到;③因地制宜,从实际出发。     

The Effect of Public Infrastructure on the Private Productive Sector of Spanish Regions

In this paper we analyze the effect of infrastructure on the cost and productivity performance of the private productive sector of Spanish regions over the period 1980–1993. We use a dual approach based on cost functions that allows us to recover the usual parameters estimated with production functions. In addition, we obtain rates of return and cost elasticities of production factors at the regional level. Our framework explicitly considers that some factors are quasi-fixed and their volume can differ from their optimal endowment levels. Our results indicate that the public sector has contributed significantly to enhance productivity and reduce costs in the private sector of almost every Spanish region. Nevertheless, there is still scope for the government to continue its investment efforts, given that there remains an appreciable gap between observed and optimal public capital, and we find that in the long run, public capital promotes private investment.     

Grafts: Feminist cultural criticism

This article provides information about Berne's financial situation at the time the Economic Society was founded. The canton was in an exceptionally fortunate position, having accumulated a sizeable cash reserve that was in part used for loans and investments on the London capital market. Throughout the century, the Bernese government followed a very cautious investment strategy. The main reason for purchasing overseas securities was that they helped the patricians to become independent from tax-paying subjects. Economic imperatives ruled out increases of the cash reserve or further involvement in the overcrowded domestic capital market. However, by investing abroad Berne became increasingly dependent on the goodwill of its debtors, for which it was criticised by the Economic Patriots amongst others.     

Balancing London? A Preliminary Investigation of the “Core Cities” and “Northern Way” Spatial Policy Initiatives Using Multi-City Corporate and Commercial Law Firms

This paper reports a preliminary investigation into the economic efficacy of two spatial frameworks—English Core Cities and the Northern Way—recently promoted by national policy makers. We ask whether they are consistent with contemporary economic process in the UK space economy through analyses of commercial multi-city law firms. The latter are treated as an “indicator sector” to define the contemporary UK space economy as practised by law firms. Within this new space of flows, the location strategies of the law firms do confirm the salience of the Northern Way (as trans-Pennine corridor) and Core Cities as part of a larger UK metropolitan space of flows. Conflating the two spatial frameworks leads us to identify hints of a rebalancing of London within a metropolitan UK space. A Manchester polycentric mega-city region is found to be the likely candidate for this role. This finding in no way impinges on London's dominant global role, and we conclude that perhaps mutuality between London and provincial cities is beginning to replace past negative dependency relations.