Defining and measuring urban regions: A sensitivity analysis

This paper evaluates the impact of alternative city boundary definitions on economic performance. First we discuss the theoretical background and motivate the empirical work. Then we present the methodological concept of the sensitivity analysis, which will be applied to a variety of data of Zürich and Bern (the financial and the administrative centres of Switzerland) in order to see how the values of different indicators vary depending on the definition adopted. Finally we will show whether the empirical patterns found are statistically significant. The analysis shows, that the delimitation of a city or city region indeed matters.     

The general urban model: Retrospect and prospect

The general urban model is viewed in brief retrospectively, mainly emphasizing the transition for the monocentric 'classical' elements of such a model to the multicentric. The emphasis of the paper, however, is on future prospects. It is argued that it could be developed as the basis of a model-based 'big picture' of urban development through five layers of disaggregation – from the global to the local. There are many opportunities for submodel development but the main future challenge is the modelling of urban and regional evolution. Progress in modelling urban and regional systems as complex nonlinear systems with particular reference to path dependence and phase transitions is reviewed. The idea of urban and regional 'DNA' is introduced which leads to a 'genetic medicine' view of aspects of planning.     

An empirical analytical framework for agglomeration economies

This paper proposes an empirical analytical framework for agglomeration economies based on a translog production-inverse input demand system. Estimation of the system allows us to identify effects on total factor productivity (TFP), partial factor productivity, factor prices and factor demands. It also provides a decomposition of the aggregate agglomeration elasticity into returns that arise from the increased efficiency of factor inputs and a “direct” agglomeration effect which exists over and above any factor augmentation. This enables us to indirectly address the problem of unobserved heterogeneity in factor “quality”. The paper provides an empirical application of the model using firm level data for UK manufacturing and service industries.     

Industrial clusters in Denmark: Theory and empirical evidence

Abstract.  This article tests the hypothesis that two industrial clusters exist in Jutland, Denmark. The article first discusses the theory of agglomeration economies in relation to industrial clusters, particularly with respect to spillover effects as a positive technological externality. Different methodological approaches to the identification of these effects are examined. In the light of this discussion, the article investigates the performance of two Danish industrial clusters that are frequently identified and examined in the literature. Little evidence is found to support claims concerning the existence and performance of the two clusters, raising wider doubts about cluster-based industrial policy.     

The economic effects of local authority mergers: empirical evidence for German city regions

Cooperation of neighbouring local authorities in the provision of regional public goods can be efficiency enhancing due to economies of scale, a better realisation of fiscal equivalence or dynamic efficiency gains. While the need for such cooperation between local authorities is undisputed, there are different positions concerning the form the cooperation should take. Some argue that local authority mergers are the most efficient and democratic strategy. Others argue that functional cooperation is more appropriate and that mergers reduce the welfare enhancing effects of competition between local authorities. Based on the conditions in Germany that can be interpreted as a natural experiment it is shown in a cross-section analysis that local authority mergers in monocentric city regions have indeed significant economic effects. All else equal the financial situation of city regions where the core and the hinterland are separate administrative districts is worse than in single district regions. Radical mergers of core cities and suburban towns in the 60s and 70s led to higher economic growth in the period 1980–1998.     

Rajin-Seonbong,new gateway of Northeast Asia

The economic zone of Rajin-Seonbong (Raseon) is located at the north-eastern border of North Korea, adjacent to China and Russia. Although its attractiveness to foreign investors has remained limited since its creation in 1991, Raseon is of growing interest as a transit port for Russian and Chinese trade. This paper reviews some theories on the constraints and advantages of remotely located ports, arguing that limited economic base can be overcome by a strategy based on transhipment flows to and from China, South Korea, Russia and Japan. In particular, it develops the idea that economic factors, such as remoteness from the nation’s core region, are not sufficient to explain the uneven success of the project. More likely is the mismatch between local industries and port facilities. Unlike the Chinese free-trade zone experiment, port and logistics development in North Korea may take place prior to industrial development, strengthening Raseon as a potential gateway and growth pole in Northeast Asia.     

Do localization economies derive from human capital externalities?

One of the most robust findings emerging from studies of industrial agglomeration is the rise in productivity that tends to accompany it. What most studies have not addressed, however, is the potential role played by human capital externalities in driving this relationship. This paper seeks to do so using data from the 1980, 1990, and 2000 US Census covering a collection of 77 (primarily) three-digit manufacturing industries across a sample of more than 200 metropolitan areas. The analysis generates two primary results. First, a variety of education- and experience-based measures of average human capital rise significantly as an industry’s employment in a metropolitan area increases. Hence, clusters of industry do tend to be characterized by larger stocks of human capital. However, second, even after accounting for the level of human capital in a worker’s own industry, the overall size of the industry remains strongly associated with wages. Such results cast some doubt on the notion that localization economies emanate from education- or experience-based knowledge spillovers. The views expressed herein are those of the author and do not represent the official positions of the Federal Reserve Bank of St. Louis or the Federal Reserve System.     

R&;D accessibility and regional export diversity

This paper examines the influences of accessibility to R&D on the export diversity in Swedish regions. A theoretical model with fixed R&D cost predicts that spatial knowledge spillovers generate external economies of scale in R&D activities. These external effects are presumed to increase regions’ innovative capacity. Moreover, the model implies that the effects of R&D on regional export performance are reflected by the size of the export base rather than by the export volumes. The empirical analysis focuses on three different indicators of export diversity: the number of exported goods, the number of exporting firms and the number of export destinations. The hypothesis that regional accessibility to R&D facilities in the private business sector, on the one hand, and university research departments on the other hand, increases the export diversity in regions is tested in a spatial cross-regressive model. Since knowledge cannot be regarded as a spatially trapped resource the empirical analysis includes two measures of R&D accessibility: intra-regional and inter-regional. The empirical results indicate that the three indicators of regional export diversity are positively affected by the intra-regional accessibility to company R&D in commodity groups that have a relatively high R&D-intensity in production. Inter-regional accessibility to company R&D has significant positive impacts on the number of export goods and the number of export destinations also in less R&D-intensive industries. In the case of university R&D, the empirical results are weaker, in particular in the case of intra-regional accessibility. Yet, the inter-regional accessibility to university R&D has a significant positive impact on the number of export goods and the number of export destinations in the majority of commodity groups.     

A multi-scale analysis of urban form and commuting change in a small metropolitan area (1990–2000)

Issues of growth, especially the spatial nature of recent urban development and its implications for travel patterns, have received a great deal of attention. In particular, questions persist as to how the spatial distribution of workers and jobs influences commute patterns. This paper investigates changes in commuting and land use patterns using measures of jobs–housing balance, commuting efficiency and other statistics. A smaller urban area is chosen for study (Tallahassee, FL, USA)and data on its workers, jobs, and commute patterns are obtained from the Census Transportation Planning Package for 1990 and 2000. The key research questions investigated probe whether there were substantial changes in urban form and commuting over the period. A two-tiered approach is taken where change is explored at the regional and local scales using GIS, optimization procedures, and inferential statistical techniques. The results reveal the extent of the spatial changes in the study area between 1990 and 2000. Major findings included stability in urban structure over the time period, as well as a persistent strong relationship between land use and commute patterns. These results are discussed in light of their implications for other cities and for future work.     

The impact of convergence in the industrial mix on regional comparative growth: Empirical evidence from the French case

The aim of this article is to explain heterogeneities in French regional labor productivities since the mid-seventies at both aggregate and sectoral level. This paper extends the works of Baumol and of Barro and Salai-Martin, firstly by pointing out sources of growth linked to the new growth theories (research effort, size effects) and secondly by emphasizing the impact of cross-sectoral labor reallocations through a shift-share analysis. Our results show the importance of regional asymmetries and the key role played by the dynamic of sectoral composition in the convergence of labor productivities within France.Received: November 2000/Accepted: February 2004     

The effects of trade openness on regional inequality in Mexico

This paper attempts to shed light on the debate about the effect of trade openness on regional inequality, by exploring the specific mechanisms through which this relationship might operate. It does so by testing the hypothesis, based on endogenous growth theory, that a region’s ability to capture the benefits of trade openness depends on key regional characteristics—its critical endowments—and therefore the degree to which trade will reduce regional inequality in a given country is mediated by the geographic distribution of its endowments. I test the hypothesis in Mexico, using statistical analysis of an original sub-national dataset that runs from 1940 to the present. The results indicate that opening up to trade benefits more those regions with lower levels of education, thereby tending to reduce regional inequality. However, opening up to trade also benefits more those regions with higher levels of income and infrastructure, thereby tending to increase regional inequality. This latter effect is greater than the former, so that the overall effect of trade openness is to increase regional inequality.     

Spatial monopoly of multi‐establishment firms: An empirical study for supermarkets in the Netherlands

Multi‐establishment firms can create local spatial monopolies in the form of clusters of own establishments without competition. This paper examines the existence of spatial monopolies for Dutch supermarkets in 2009. It is found that 23 percent of consumers can be qualified as being locked‐in in a spatial monopoly of a specific supermarket brand. Resumen. Las empresas con múltiples establecimientos pueden crear monopolios espaciales locales en forma de conglomerados de sus propios establecimientos sin que haya competencia. Este artículo examina la existencia de monopolios espaciales de supermercados en los Países Bajos en 2009. Se encontró que el 23 por ciento de consumidores pueden clasificarse como cautivos de un monopolio espacial de alguna marca de supermercado específica.      

Multinationals and regional indigenous development

We investigate in how far foreign multinationals have fostered regional indigenous development in Ireland. Specifically, we examine whether foreign presence has induced indigenous plant entry within the same regions and in bordering regions. To this end we employ an entry rate model on an exhaustive panel level data set for Irish manufacturing plants. Our results show that multinationals can foster local development both within and in surrounding regions, although the extent of these effects varies between policy preferential and non-preferential regions.Received: December 2002/Accepted: January 2004This research has benefited from financial support through the RTN research project Specialization versus diversification: the microeconomics of regional development and the spatial propagation of macroeconomic shocks in Europe of the European Commission (grant No. HPRN-CT-2000-00072). We would like to thank Rosella Nicolini for helpful comments. The second author gratefully acknowledges financial support from the Belgian FNRS and the third author acknowledges support from a Marie Curie grant. Usual disclaimers apply.     

Urban growth effects on rural population, export and service employment: evidence from eastern France

This paper examines how the spatial pattern of urban growth in functional economic regions influences the interplay of rural export employment, rural services employment, and population change in rural areas. Using an extension of the Boarnet’s model (Papers in Regional Science 73:135–153, 1994), we find that urban spread effects to rural areas in France are more likely than urban backwash effects, and that spatial urban (both dynamic and static) externalities affect rural population and employment growth. In the functional economic regions where the urban core is declining and the urban fringe is expanding, urban population growth involves an increase in rural export employment, and larger change in service employment favors rural population growth. However, urban export job growth reduces the growth in rural service jobs and expanding urban service jobs reduce rural export jobs, suggesting that expanding urban employment opportunities draws employees away from proximate rural communities. Conversely, where both urban core and fringe are growing, we observe an urban spread effect from the urban export sector to rural services—an export base multiplier effect with a spatial dimension—and from urban population growth to rural service employment.

An industry disaggregated analysis of the determinants of regional entry and exit

Empirical research by, among others, Armington and Acs (Reg Stud 36:33–45, 2002) show that regional determinants of new firm formation differ between industries. This paper reinvestigates the regional determinants of entry and exit considering these findings using panel data methods at three different levels of aggregation. Agglomeration, in terms of localisation economies, is unequivocally found to be positive for regional new firm formation, but does not necessarily prevent firms from exiting. The results also show that industry structure is a more important explanatory variable for differences between entry and exit rates across regions than regional factors.     

A model of urban growth with endogenous suburban production centers

This paper presents a theoretical model of the spatial growth of an urban area. Its primary contribution is that suburban production centers arise as small, independent landowners respond to market forces. Other models impose subcenters exogenously and require action by large developers or government agencies. The model predicts almost no undeveloped land is present in struggling cities, but urban sprawl is the hallmark of a growing metropolitan area. There is also anticipatory sprawl: even while all industrial development is concentrated in the central city, a leapfrog zone may sprout between two residential zones in the suburbs. Received: July 2000/Accepted: December 2000     

The new intra-urban dynamics: Suburbanisation and functional specialisation in French cities

This article examines the relationships between the employment suburbanisation from central cities towards their suburbs, and the process of intra-urban specialisation that occurred simultaneously in the fifty largest French metropolitan areas. A methodology is proposed to identify urban subcentres and to analyse the effects of the intra-urban specialisations on suburbanisation patterns. We conclude that the specialisation of both subcentres and central cities has a significant effect on suburbanisation rates. Lastly, an intra-metropolitan shift/share analysis provides additional insights into the employment dynamics of central cities and suburbs during the last twenty years. Received: 25 July 2000 / Accepted: 29 May 2001     

Beyond neoclassical orthodoxy: A view based on the new economic geography and UK regional wage data

Abstract.  The article examines the performance of two competing non-nested models of regional wage variations in Great Britain, one motivated by the Solow-Swann neoclassical growth model which assumes constant returns to scale, the other by new economic geography theory, which assumes internal and external increasing returns. Both models also include controls for labour efficiency variations across regions. The empirical analysis, which is based on the bootstrap J test, shows that the neoclassical model does not reject the new economic geography specification, but the converse is not true and the model with a basis in new economic geography has significantly superior explanatory power. This adds support to the notion that in order to correctly understand differential regional economic development, we should move beyond neoclassical orthodoxy and that an increasing returns stance is more appropriate. However, the article also highlights some limitations of new economic geography theory.