Territorial (In) Coherence: Labour and Special Economic Zones in Laos's Border Manufacturing

This article engages literature on special economic zones and territory in global development. I suggest a focus on labour's spatial class composition as constitutive of territorial coherence provides insights into how the Savan‐Seno Special Economic Zone in Lao PDR operates as an economic border territory bridging Laos to the regional and global economies. The distanciated global connections which special economic zones aim to create are predicated on zones gaining internal coherence for capital accumulation. I suggest zones’ internal coherence depends on zone firms reworking the local class composition of labour, itself constituted by workers’ spatial practices. In the Savan‐Seno zone this occurred through immobilising a mobile labour force and taking advantage of its continuing embeddedness within a subsistence rice‐producing village economy. The argument aims to illustrate how zones producing for global markets act as territories of complex spatiality which span and connect multiple spaces of production and workers’ social reproduction.     

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.     

Location and Growth in the Brazilian Northeast

Abstract Clustering of economic performance across jurisdictions has generated considerable research on the spillovers and linkages among geographical neighbors. Much of this work, however, has been aspatial, implying that the influence of location attributes on growth has been largely ignored. In this paper, we examine the contribution of location to regional economic growth using municipio‐level data for the Brazilian Northeast—a historically lagging region of the country. We test if productivity among northeastern municipios is converging to a steady state and whether spatial externalities are linked to productivity growth in individual municipios. We find that, conditional on structural characteristics, productivity among municipios is converging at about 3 percent per year. Further, productivity in individual municipios is positively associated with own‐structural characteristics but negatively associated with productivity growth in neighboring municipios. This means that there are negative spatial externalities coming from productivity improvements in neighboring regions.     

THE DETERMINANTS OF LOCALIZATION AND URBANIZATION ECONOMIES: EVIDENCE FROM THE LOCATION OF NEW FIRMS IN SPAIN

The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries. First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. Then, we regress these estimates on industry characteristics related to the potential importance of labor market pooling, input sharing, and knowledge spillovers. Urbanization effects are high in knowledge‐intensive industries, suggesting that firms locate in large cities to benefit from knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry‐specific, suggesting that industries locate in specialized economic environments to share a common pool of specialized workers.     

KNOWLEDGE SPILLOVERS,ABSORPTIVE CAPACITY,AND SKILL INTENSITY OF CHILEAN MANUFACTURING PLANTS*

ABSTRACT Knowledge spillovers are an important source of economic growth. In this study, we identify a mechanism through which knowledge spillovers occur among plants in the Chilean manufacturing industry. A plant‐level production function is estimated with the absorptive‐capacity hypothesis, that is, employment of skilled workers is a key channel through which knowledge is transmitted across plants. Results show that a plant's productivity from spillovers increases with its skill intensity, which is measured by the share of skilled workers in total employment. We also find that plants in a region with a large knowledge stock increase their skill intensity to benefit more from spillovers. Our results suggest that an increase in regional knowledge stock is the most effective policy to improve a plant's productivity. However, policies that encourage a plant to employ high skill‐intensive production also enhance its productivity.     

Intermodal freight terminals: locality and industrial linkages

The areas around eight Canadian intermodal freight terminals form the focus of this study. Two basic research questions are addressed: What is the character of the zones adjacent to the terminals and what is the functional tie between industries located in these zones and the terminals themselves? There are three seaports (Halifax, Montreal and Vancouver), three airports (Dorval‐Montreal, Pearson‐Toronto and Vancouver) and two rail yards (both in the Toronto region) in the study. In total, 196 manufacturing and wholesaling firms were part of the study. Transportation land use is areally most extensive in six of the eight terminal zones. Industrial land use, while significant in area, is not the most dominant land use surrounding any of the terminals. No one socio‐economic characteristic defines the areas around the terminals. Businesses in close proximity to the terminals make rather modest use of the terminals. Less the 30 percent of the interviewed firms used the nearby terminal for their freight shipments; only 3 percent of the firms indicated that proximity to the terminal was a primary locational consideration. The relationship between industrial location and the terminals is more indirect, than direct, based on the high level of accessibility found in the terminal zones.     

ANTIAGGLOMERATION SUBSIDIES WITH HETEROGENEOUS FIRMS*

ABSTRACT This paper studies antiagglomeration subsidies in a core–periphery setting when firms are heterogeneous in labor productivity, focusing on the effects of a relocation subsidy on firm location in various tax‐financing schemes (local vs. global). I discuss how a subsidy can enhance welfare and average productivity in the periphery. As a result, I find that a subsidy proportional to profits can induce the relocation of high‐productivity firms and thus increase welfare and average productivity in the periphery. Concerning tax‐financing schemes, a local tax‐financing scheme has an optimal level of subsidy.     

GLOBALIZING KNOWLEDGE: HOW TECHNOLOGICAL OPENNESS AFFECTS OUTPUT,SPATIAL INEQUALITY,AND WELFARE LEVELS

Using an analytically solvable model, we study how the spatial distribution of economic activities and the ensuing welfare levels are affected by pecuniary externalities, depending on transportation costs, and localized technological externalities, due to the cost saving effect of intra‐ and interregional knowledge spillovers. Under the assumption of capital mobility and labor immobility, we show that increasing interregional knowledge spillovers, i.e., promoting technological openness, favors a smoother transition between different levels of firms concentration, makes trade globalization less likely to generate catastrophic and irreversible agglomeration, and ultimately leads to a less uneven distribution of welfare.     

Economic statecraft in China's new overseas special economic zones: soft power,business or resource security?

China's rapidly growing economic engagement with other developing countries has aroused intense debates, but these debates have often generated more heat than light. The Chinese government is clearly pushing its companies to move offshore in greater numbers, and state‐owned firms figure prominently in many of the major investments abroad. Yet relatively little research exists on when, how and why the Chinese government intervenes in the overseas economic activities of its firms. China's state‐sponsored economic diplomacy in other developing countries could play three major strategic roles: strengthening resource security, enhancing political relationships and soft power, and boosting commercial opportunities for national firms. This article examines China's programme to establish overseas special economic zones as one tool of Beijing's economic statecraft. It traces the process by which they were established and implemented, and investigates the characteristics of the 19 zones initially selected in a competitive tender process. The article concludes that even in countries rich in natural resources, the overseas zones were overwhelmingly positioned as commercial projects. Particularly in the Asian zones, China is following in the footsteps of Japan. The zone programme, and the Chinese foreign investment it hoped to foster, represents a clear case of the international projection of China's developmental state. However, in Africa (but not generally elsewhere) discourse surrounding the zones publicly positions them as a transfer of China's own development success, thus potentially enhancing China's political relationships and soft power on the continent.     

AGGLOMERATION,URBAN WAGE PREMIUMS,AND COLLEGE MAJORS

The aim of this paper is to examine the manner and extent to which worker skill type affects agglomeration economies that contribute to productivity in cities. I use college majors to proxy for skill types among workers with a bachelor's degree. Workers with college training in information‐oriented and technical fields (e.g., STEM areas such as engineering, physical sciences, and economics) are associated with economically important within‐field agglomeration economies and also generate sizeable spillovers for workers in other fields. In contrast, within‐field and across‐field spillovers for workers with college training in the arts and humanities are much smaller and often nonexistent. While previous research suggests proximity to college‐educated workers enhances productivity, these findings suggest that not all college‐educated workers are alike. Instead, positive spillover effects appear to derive mostly from proximity to workers with college training in information‐oriented and technical fields.     

AGGLOMERATION ECONOMIES: MICRODATA PANEL ESTIMATES FROM CANADIAN MANUFACTURING*

ABSTRACT This paper identifies the main sources of urban increasing returns, after Marshall. The geographical distance across which externalities flow is also examined. We bring to bear on these questions plant‐level data organized in the form of a panel across the years 1989 and 1999. Plant‐level production functions are estimated across the Canadian manufacturing sector as a whole and for five broad industry groups, each characterized by the nature of its output. The panel data overcome selection bias resulting from unobserved plant‐level heterogeneity that is constant over time. A related set of estimates using instrumental variables allay persistent concerns with endogeneity. Results provide strong support for Marshall's claims about the importance of buyer‐supplier networks, labor market matching and spillovers. We show that spillovers enhance plant productivity within industries rather than between them and that these spillovers are highly localized.     

Comparative localization of academic and industrial spillovers

This paper studies geographic localization of academic and industrialknowledge spillovers. Using data on US research and developmentlaboratories that quantify spatial aspects of learning aboutuniversities and firms as well as the locations of closely affiliateduniversities and firms, I find that academic spillovers aremore localized than industrial spillovers. I also find thatlocalization is increased by nearby stocks of R&D, but reducedby laboratory and firm size. These results on localized academicspillovers reflect the dissemination of normal science and theindustry–university cooperative movement, which encouragefirms to work with nearby universities, so that geographic localizationcoincides with the public goods nature of academic research.This situation contrasts with relations to other firms, wherecontractual arrangements are often needed to access proprietaryinformation, often at a considerable distance.     

The Italian industrial districts and the crisis of the cooperative form: Part I

The theory of the industrial districts—spatial clusters of mutually supporting, mostly small and medium‐sized, flexibly specialized enterprises, held together by virtue of their deep local embedding and relations of trust—is now a well‐developed part of regional planning doctrine and folklore. The canonical cases are those located in the so‐called Third Italy’. In Part I of this paper, I review the theory, and present the first of three case studies, each of which challenges one or another fundamental element of the district model. Here, I consider evidence of penetration into the Emilian food packaging machinery district by outside financial interests, which have proceeded to impose hierarchical order on what had previously been more collaborative relations among more or less symmetrically powerful firms. The remaining two cases—on the emergence of vertical production systems in the clothing sector of the Veneto, and on the contradictions of excessive fragmentation in the production of Pratese woolen textiles—will be presented in Part II. These cases do not point to economic failure, per se, but they do (I think) point to an underlying contingency and ultimate instability of the canonical district form.     

VERTICAL INDUSTRY RELATIONS,SPILLOVERS, AND PRODUCTIVITY: EVIDENCE FROM CHILEAN PLANTS*

ABSTRACT We use disaggregated data on Chilean plants, and the Chilean input–output table to examine the impact of agglomeration spillovers on total factor productivity (TFP). In common with previous studies, we find evidence for intraindustry spillovers, but none for general cross‐industry spillovers. This picture changes when we take vertical industry relations into account. There are important productivity spillovers from plants in upstream industries. Interestingly, a similar effect cannot be found from plants in downstream industries. The number of plants in these sectors has no effect on plant‐level TFP, just as the number of plants in other industries that are neither important upstream suppliers nor downstream customers also has no effect.     

Globalisation Lived Locally: A Labour Geography Perspective on Control,Conflict and Response among Workers in Kerala

Abstract: Supported by the labour geography framework, I analyse how spatial practices of labour shape the economic geography of capitalism, by looking into a model not at a global but at a very local scale of organisation and showing its effectiveness while confronting social actors organised at global or extra‐local scales. Questioning global stereotypes on economic responses to globalisation, I argue that labour becomes actively involved in the very process of globalisation and the expansion of capital, empirically demonstrating the relevance of this in the globalisation literature. I deal with one region—Kerala—and processes in its labour markets, taking the case of apparel workers in an export‐promoting industrial park.     

Knowledge Spillovers and Total Factor Productivity: Evidence Using a Spatial Panel Data Model

This article investigates the impact of knowledge capital stocks on total factor productivity (TFP) through the lens of the knowledge capital model proposed by Griliches (1979) , augmented with a spatially discounted cross-region knowledge spillover pool variable. The objective is to shift attention from firms and industries to regions and to estimate the impact of cross-region knowledge spillovers on TFP in Europe. The dependent variable is the region-level TFP, measured in terms of the superlative TFP index suggested by Caves, Christensen, and Diewert (1982) . This index describes how efficiently each region transforms physical capital and labor into output. The explanatory variables are internal and out-of-region stocks of knowledge, the latter capturing the contribution of cross-region knowledge spillovers. We construct patent stocks to proxy annual regional knowledge capital stocks for N =203 regions during 1997–2002. In estimating the effects, we implement a spatial panel data model that controls for spatial autocorrelation as well as individual heterogeneity across regions. The findings provide a fairly remarkable confirmation of the role of knowledge capital contributing to productivity differences among regions and add an important spatial dimension to discussions in the literature by showing that productivity effects of knowledge spillovers increase with geographic proximity.     

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.     

THE OPTIMAL DISTANCE TO PORT FOR EXPORTING FIRMS*

ABSTRACT Success in international trade depends, among other things, on distance from markets. Most new economic geography models focus on the distance between countries. In contrast, much less theorizing and empirical analysis have focused on how distances within a country—for instance, due to the location behavior of exporting firms—matter to international trade. In this paper, we contribute to the literature on the latter by offering a theoretical model to explain the optimal distance that an export‐oriented firm would locate from a port. We present empirical evidence in support of the model.     

Economic development and industrial policy in Baden — Württemberg: Small firms in a benevolent environment

Baden‐Württemberg is one of the strongest regional economies in Germany. Quite commonly, its success is explained by the technological competence of its industry, by the flexibility and ingenuity of its many small and medium‐sized firms, and by the impact of an active industrial policy. Today, however, the region has to cope with severe economic problems, and there is some evidence that these problems — at least partially — are due to its praised specific industry structure. On the other hand, there is reason to believe that the region will manage the required structural adjustment — not at least because of its well developed institutional profile. Thus, although the story of success of Baden‐Württemberg has to be revised somewhat, there are lessons to be learned with regard to industrial policy and the promotion of (regional) economic development.     

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.