Regional investment under uncertain costs of location

Due to political and economic integration, firms face increasing opportunities for locating their activities in countries, regions and cities that provide the best business environment for their specific needs. In our study, we focus on the impact of economic risk and risk preferences upon regional allocation of capital investments. The source of risk stems from the difference in costs of location and the business cycle across regions. Firms are seeking ways to reduce their exposure of regional shocks. As a result, regional concentration of investment of capital is endogenous. A comparative static analysis shows that regional capital allocation depends upon the firm’s risk preferences. Our findings demonstrate the suitability of the two-moment approach with multiple risks as an alternative to the expected utility approach. The impact of changes in distribution parameters, such as the expected costs of location, the variance of costs of location and the correlation between locational costs (or the business cycle), can be fully characterized by the elasticity of risk aversion. Elements of risk preferences beyond risk aversion prove to be important to evaluate regional policies. This insight is of interest for empirical research in regional economics.     

The world city network: Evaluating top-down versus bottom-up approaches

The growth of the knowledge economy has led to new forms of business networks linking cities and towns across different spatial scales. Various attempts have been made to analyse these networks empirically using the interlocking network model of the Globalization and World Cities (GaWC) research network. Two approaches can be distinguished from a spatial perspective: a global ‘top-down’ approach that studies the world city network from the perspective of the largest advanced producer service firms, and a macro-regional ‘bottom-up’ approach that starts with the most important knowledge-intensive firms located within specific territorial boundaries. This paper compares and critically assesses the methodological implications and empirical outcomes of both approaches with reference to case studies of the German space economy. Both approaches pursue similar objectives: to investigate external relations of cities, both transnationally and on the national scale. Differences exist in the theoretical argumentation: the top-down approach is grounded in world city research; the bottom-up approach is anchored in debates in regional science and economic geography. In this paper, we argue for the need of scale-sensitive interpretations of connectivity patterns resulting from different approaches to the interlocking network model and conclude with some tentative recommendations for the methodological direction of future research in world city network studies.     

The Economic Geography of South Africa’s Call Centre Industry

Over the past two decades, scholarship on call centres has grown with contributions from a range of disciplines including management science, urban studies, organisation studies and sociology. One aspect of call centres that has received only limited attention is their location or economic geography. This article contributes to the growing body of scholarship on call centres by investigating locational issues in the case of the developing economy of South Africa. The study highlights the critical importance for call centre location of access to labour, labour costs, public transport and availability of suitable premises. Current government incentives have little significance on location, a factor which underlies the strong concentration of call centres in South Africa’s major cities, in particular Johannesburg and Cape Town.     

Agglomeration economies, inventors and entrepreneurs as engines of European regional economic development

In economic agglomeration studies, the distinction of various externalities circumstances related to knowledge spillovers remains largely unclear. This paper introduces human capital, innovation and several types of entrepreneurship as potential drivers of regional economic performance with an impact of agglomeration economies. We use measures of specific types of entrepreneurship, discerned at the individual level, as well as human capital and invention through patenting activity for the period 2001–2006. The empirical application on 111 regions across 14 European countries investigates their relation with observed regional productivity rates in 2006. Our main findings indicate that (i) human capital, patenting activity and entrepreneurship are all linked to regional performance, more so in regions containing large as well as medium-sized cities; (ii) they act as complements rather than substitutes, facilitating productivity differently; and (iii) accounting for patenting activity and entrepreneurship captures agglomeration externalities effects previously subscribed only to the density of resources of regional performance. The particular role of regions with medium-sized cities next to regions with large cities complies with observed growth trends as well as recently proposed place-based development approaches that assume that interactions between institutions and geography are critical for regional economic performance.     

Retrofitting cities: Local governance in Sydney,Australia

Transforming cities to a lower carbon future is one of the key challenges of contemporary urban governance. Retrofitting the city – or modifying existing urban infrastructures, buildings and daily life to suit different energy sources and different expectations of energy consumption – is essential to this transformation. In urban studies, little focus has yet been applied to the shape and character of urban governance frameworks and mechanisms required to successfully retrofit cities. In this paper we address this lacuna by exploring the logics, practices and dynamics of retrofitting governance in the Australian city. Using a governmentality perspective, the paper identifies the involvements of different scales of government in retrofitting policies and mechanisms and connections between them. Based on a unique survey of carbon reduction initiatives involving government, business and community actors across Australia’s capital cities, we outline the types of retrofitting solutions being proposed and enacted. Using a focus on local initiatives from Sydney, Australia’s largest city, the paper documents four key techniques through which retrofitting is being governed – self-governing, holistic, facilitative and educative. The findings suggest that governance gaps remain in attending to the daily life of technologies and the materiality of daily life.     

Creative and science oriented employees and firm-level innovation

This paper examines the link between innovation and the endowments of creative and science oriented STEM – Science, Technology, Engineering and Mathematics – workers at the level of the firm and at the city-/regional-level in Germany. It also looks into whether the presence of these two groups of workers has greater benefits for larger cities than smaller locations, thus justifying policies to attract these workers in order to make German cities ‘smarter’. The empirical analysis is based on a probit estimation, covering 115,000 firm-level observations between 1998 and 2015. The results highlight that firms that employ creative and STEM workers are more innovative than those that do not. However, the positive connection of creative workers to innovation is limited to the boundaries of the firm, whereas that of STEM workers is as associated to the generation of considerable innovation spillovers. Hence, attracting STEM workers is more likely to end up making German cities smarter than focusing exclusively on creative workers.     

Bern's positioning strategies: Escaping the fate of a secondary capital city?

Bern is a classic example of a so-called secondary capital city, which is defined as a capital city that is not the primary economic center of its nation. Such capital cities feature a specific political economy characterized by a strong government presence in its regional economy and its local governance arrangements. Bern has been losing importance in the Swiss urban system over the past decades due to a stagnating economy, population decline and missed opportunities for regional cooperation. To re-position itself in the Swiss urban hierarchy, political leaders and policymakers established a non-profit organization called “Capital Region Switzerland” in 2010 arguing that a capital city should not be measured by economic success only, but by its function as a political center where political decisions are negotiated and implemented. This city profile analyses Bern's strategy and discusses its ambitions and limitations in the context of the city's history, socio-economic and political conditions. We conclude that Bern's positioning strategy has so far been a political success, yet that there are severe limitations regarding advancing economic development. As a result, this re-positioning strategy is not able to address the fundamental economic development challenges that Bern faces as a secondary capital city.     

Innovation in urban systems: The interrelationships between urban and national economic development

The theoretical basis for analysing the role of innovation in economic development is assessed, as is the application of such theories to urbanisation processes. It is concluded that innovation lies at the heart of economic development and that urban development has important feedback effects on national economic development. Analysing these feedbacks requires a sophisticated data set allowing the analysis of input-output relationships in urban systems over time. In the absence of such data, industry employment classifications are used as a proxy for economic structure in an analysis of United States and Australian cities. Particular kinds of cities in the urban hierarchy can be analysed in terms of their economic structure and this can then be related to national economic development trends. The contributions of categories of city (particularly by size class) to economic development can then be explored. Obviously, results will vary with the era of economic development covered by the data. However, in all eras, certain kinds of cities will emerge as leaders in the process of urban economic development and will also play a crucial role in national economic development.     

创意城市:概念问题和政策审视

本文代表对创意城市的性质和重要性所进行的一种宽泛而偶然的辩证性思考。作者试图将创意城市放在所谓新经济的背景下,追索这些现象与技术、生产结构、劳动力市场和区位集聚动力之间的联系。我特别希望揭示新经济的结构是如何释放现代城市中的经济和文化创新的特定历史形式的。本文关注各种政策问题,而且更重要的是决策者在企图建立创意城市时面临的一般可能和局限。本文也探讨了全球化的影响,特别提及全球范围的与竞争和合作密切相关的创意城市网络的预期出现。在结论部分,我特别指出创意城市的实际和潜在的某些黑暗面。     

Urban Tourism and Evolutionary Economic Geography: Complexity and Co-evolution in Contested Spaces

Urban tourism is an important research topic whether in mass tourism resort areas where tourism is the economic staple or in metropolitan areas where it is one (or more) development path(s) among many. Urban areas are dynamic and fast-paced environments but are also places where social and economic inequalities are most stark. Economic geography is one theoretical perspective through which researchers address urban tourism. The recent “evolutionary turn” in economic geography is finding its way to tourism studies but has only been applied to a few urban tourism cases. This paper sets out the potential of evolutionary economic geography (EEG) as a conceptual framework for urban tourism studies. The analysis draws on recent studies of urban tourism from an evolutionary perspective to highlight the strengths of taking such an approach and a number of avenues yet to be explored are put forward. Urban tourism affects large numbers of residents and businesses as well as influencing labour flows, and so understanding the dynamic nature of its development paths is vital. Tourism development does not occur in a vacuum, and urban tourism is one area where the complexity of the tourism economy and its place within broader regional development strategies is most obvious. Under recent neoliberal policies of urban development, tourism has become closely associated with place-based competition and large capital investments. Urban tourism also enters the fray in matters of contested urban spaces with issues of local governance, such as privatisation of public space, moving increasingly to the fore. The paper concludes with a list of future approaches to evolutionary studies of urban tourism to broaden the scope beyond the dominant financial metrics of tourism success.     

当代中国城市形象及内部空间结 构变迁 ——基于空间生产理论视角的分析

文章从剖析空间生产的理论入手,以"空间生产"的视角揭示出全球化过程中空间生产的运转机制及特点、中国城镇的空间形态重构、城市化进程中城市特色消失、文化消费符号化等现象。本文最后对新马克思主义"空间生产"理论的批判性姿态做了部分质疑,认为空间生产应该是人类发展固有的矛盾,而不仅仅是资本运作的矛盾,城市设计师应该尽自己努力均衡经济、政治、社会三方利益,促进城市空间生产的健康、持续发展。     

INFORMATION,SPACE, AND THE CONTROL OF LOCAL DECISIONS

Policy scientists have long recognized that economic institutions located far from cities can manipulate resources to affect local policies and politics. Too often, however, these same students have failed to consider the implications of these same actors' control over the production and manipulation of information used to affect economic and political issues. This article assesses the current balance of control over information between cities and the economic and political institutions city officials must deal with to plan for the future of their communities. After detailing the declining ability of cities to control their own information environment and the factors leading to this state of affairs, a series of recommendations is proposed to help local decision makers regain control over their local economic space.     

空间过密化与反过密化——中国大城市空间演化的一个解释框架及初步验证

基于经济社会系统演化的过密化理论,论文从城市公共性的角度出发,以公共资源物质积累——即基础设施替代原理论中的经济产出要素,提出大城市空间演化中基础设施边际供给随人口递减的"空间过密化"假设。借助上海中心城区、深圳关内地区人口与基础设施关系的演化实证,论文认为,中国大城市在边际规律作用下经历了若干轮空间过密化进程,且通过"疏解"和"就地更新"两类手段实现空间反过密化。论文为解释中国大城市空间发展的过程机理提供了理论框架与实证案例。     

An empirical analysis of competing explanations of urban primacy evidence from Asia and the Americas

This paper tests the relationship between primacy and economic development for countries in Asia and the Americas. It tests explanations for primacy drawn from several social-science disciplines – demography, economics, geography, political science, and sociology. The study is one of the first to use panel-data estimators for the tests. Economic and domestic political variables are found to be important determinants of primacy. In particular, rent-seeking and dictatorial governments are associated with primacy, but the association exists independent of the level of economic development. The implication from dependency and world-system theories that current international economic interactions promote primacy is not supported. It also examines the hypothesis that primacy first increases and then decreases with GDP per capita.     

ON THE POWER OF FINANCE CAPITAL OVER CITISES: A REJOINER TO THE POLITICAL POWER OF FINANCE AND CAPITAL AND URBAN FISCAL CRISES: CLEVELAND'S DEFAULT, 1978

ABSTRACT: The banks precipitated Cleveland's 1978 default for political reasons. Default, however, was not the result of a struggle between the capitalist class, led by finance capital, and a working class, led by populist Mayor Dennis Kucinich. Instead, each side represented class factions. Moreover, the power by the banks through their control over credit WBS limited. Kucinich's experiment in urban populism ended primarily because he failed to organize a broad coalition and made key errors in political strategy. In addition, the Cleveland example of banks blackmailing a city administration by threatening to withdraw credit is not broadly generalizable because most cities do not rely on banks for their lending needs. Those who are interested in progressive urban policies must focus more on the ways that economic constraints on city decisionmaking are filtered by political variables.     

The impact of related variety on the creative employment growth

Cultural and creative industries (CCIs) have recently become highly relevant with regard to creative economy research, as they are considered drivers of regional and urban innovation policies and economic growth. CCIs are a priority sector on the European agenda and represent an excellent opportunity to exit the current economic crisis. In the literature, the most discussed aspect of CCIs is their value creation ability, which is due to a high degree of diversity/variety, and their impact on innovation within the wider economy, which results from the activation of cross-fertilisation processes between different sectors. Evolutionary economic geography (EEG), adopting the recently established approach based on related variety, also emphasises the issues of diversity/variety as determinants of local and urban development and innovation. This interesting and complex theoretical framework has produced a considerable number of empirical studies, none of which has been specifically applied to the creative sector. With the present study, we intended to contribute to the debate on creative economy research and EEG by investigating the impact of variety in CCIs in Italy, following the related-variety approach and using a long-term employment perspective (1991–2011). The results indicated that related variety has an important effect on the growth of creative industries, characterised by high internal connections between different creative activities. Our outcomes also led us to reassess the view held by some, namely, that creative industries can actually make a strong impact on economic growth in the wider economy; this did not appear to emerge in the Italian context, according to the methodologies we used.     

Capitalist dynamics and New Urbanist principles: junctures and disjunctures in project development

Both conservatives and liberals have criticized the New Urbanist movement with respect to its built outcomes and underlying theory. Conservatives admit that New Urbanism represents a particular market segment, but contend that most Americans prefer the traditional auto‐oriented suburb. Many critics on the left argue that New Urbanism is a false hope for improving urban life because it is limited to physical design, deals inadequately with issues of social justice and political economy, and is easily appropriated by the real estate industry as just another consumer product. The existing literature offers little systematic discussion of how the capitalist system matches up with New Urbanist principles and practices. This paper explores this issue by creating a framework for understanding the intersection of the three circuits of capital – finance capital, fixed capital, and research and technology capital – with three key New Urbanist principles – design fit; sustainability; and a composite principle encompassing civility, diversity, and equity. Given the three circuits of capital and the three design principles, there are nine points of interaction between New Urbanism and capitalism. Rather than taking capitalist principles for granted when evaluating the challenges facing New Urbanism, the authors use a critical perspective of this economic system. The conclusion suggests some changes in finance, regulation, politics, and design philosophy that may be needed before the full benefits of New Urbanism can be realized.     

City Spending on Economic Development Versus Affordable Housing: Does Inter‐City Competition or Local Politics Drive Decisions?

Public choice theory predicts that interjurisdictional competition and the need for a strong tax base severely limit local policy making. City decision makers must pursue developmental or economically advantageous policies such as economic development initiatives and avoid redistributive or fiscally harmful policies such as affordable housing programs. Many social scientists object to the deterministic argument of public choice theory and emphasize the importance of politics in the policy making process. Using regression analysis, I investigate the factors that influence cities to pursue a limited strategy as predicted by public choice theory versus a balanced or more progressive approach favoring affordable housing programs over economic development programs. The results show that inter‐city competition increases the likelihood cities will pursue a limited strategy versus a balanced or more progressive approach. However, political variables also influence local policy decisions. In fact, this analysis indicates that political factors are more important than inter‐city competition in explaining city policy choices.     

CREATIVE CITIES: CONCEPTUAL ISSUES AND POLICY QUESTIONS

Abstract: This article represents a broad and occasionally polemical meditation on the nature and significance of creative cities. I seek to situate the concept of creative cities within the context of the so‐called new economy and to trace out the connections of these phenomena to recent shifts in technologies, structures of production, labor markets, and the dynamics of locational agglomeration. I try to show, in particular, how the structures of the new economy unleash historically specific forms of economic and cultural innovation in modern cities. The argument is concerned passim with policy issues and, above all, with the general possibilities and limitations faced by policymakers in any attempt to build creative cities. The effects of globalization are discussed, with special reference to the prospective emergence of a worldwide network of creative cities bound together in relations of competition and cooperation. In the conclusion, I pinpoint some of the darker dimensions—both actual and potential—of creative cities.     

Planning trajectories in post-socialist cities: patterns of divergence and change

This article explores the new planning regimes and planning processes in post-socialist countries and their ability to influence the spatial transformation of cities. It views planning institutions as culturally embedded in the overall process of economic, social, and political transition, while recognizing the power of specific local imperatives and market pressures to shape their response. The research draws on empirical evidence in four countries and their capital cities to highlight the links between the transition to democracy, markets, and decentralized governance on the spatial transformation in post-socialist cities. The main argument is that the new planning institutions have different ability to direct these processes of change, depending on the legal framework, the availability of plans, and the institutionalization of the plan-implementation process. Despite the diverse mosaic of urban experiences in Prague, Riga, Belgrade, and Tirana, planning institutions are viewed as path dependent, influenced by a common socialist legacy. Further, changes in the exogenous environment – economic, social, and institutional – are perceived to be important sources of convergence, but tend to shape different planning responses and policy choices. The research explores these differences as well as the new patterns of spatial transformation in three principal domains: (1) spaces of production/consumption reflecting the economic transition; (2) differentiation in residential spaces associated with the social transition; and (3) new approaches to planning and service delivery resulting from the transition in governance. Central to the arguments in the article is that transition of this magnitude has created a complex urban world in which the patterns of divergence are going to become more explicit in the future, producing spatial and temporal differentiation among post-socialist cities.