Public capital, regional productivity and spatial spillovers

This paper examines the impact of infrastructure on productivity in the various regions of Spain. Using the duality approach and panel data, we estimate regional cost functions for the three main sectors of the economy for the period 1964–1991. Public capital is included as an unpaid factor of production, and two separate variables are used to establish whether the different categories of public capital have varying effects on costs. Results show that public infrastructure noticeably reduces private costs and increases overall productivity. We also estimate a production function with regional and time fixed effects. Finally, we include a study of spillover effects in transport infrastructure. Estimations suggest that such effects are of some relevance, a fact which may have serious implications for public policy on infrastructure. Received: January 2002 / Accepted: November 2004 All authors are members of the Academic Robotics Group. In listing The Academic Robotics Group, the authors are endeavoring to place each of the participant institutions on an equal footing in terms of effort and authorship. M. A. Talamini is serving as presenter.     

Modelling dynamics of knowledge networks and local connectedness: a case study of urban high-tech companies in The Netherlands

There are increasing doubts on the importance of localized knowledge and learning as benefits from a clustered location. Some empirical studies indicate that the influence of local proximity in knowledge networks stretches over larger distances than in previous times, while others suggest that local and global knowledge networks coexist. This study seeks to fill a gap in understanding how knowledge networks are shaped and how global networks may affect strength of local connectedness in a cluster. The study adopts an entrepreneurial view, drawing on a selected sample of urban innovators in the Netherlands, and employs rough set analysis and various other learning experiments. The results suggest that local/regional and global networks coexist in the urban places; this as a result of the interplay of spatial focus in the overall strategy, network capabilities and innovation intensity. With regard to local connectedness, our tentative results indicate a limited, but differentiated weakening of local linkages if knowledge networking is predominantly global. Overall, in balancing global with the local, young high-technology companies seek different ways dependent on progressing in their lifecycle and specific strategic choices.     

Entrepreneurial migration and regional opportunities in developing countries

This paper aims to investigate the entrepreneurial migrants' preferences for a location for business activities in developing countries. In the modelling framework six socio-economic and six socio-cultural variables are used in this study to investigate the migrants' propensity to stay at a particular region. The empirical research was carried out in East Nusa Tenggara, Indonesia. It appears that the presence of a supporting informal network is the most critical factor that attracts and keeps the entrepreneurial migrants in a particular region. Socio-cultural variables like experience and education play a less significant role in the migrants' decision to stay in a given region. RID="*" ID="*" Kees Gorter passed away in October 2001.     

Penetrating the ``knowledge filter' in regional economies

New knowledge in the form of products, processes and organizations leads to opportunities that can be exploited commercially. However, converting new ideas into economic growth requires turning new knowledge into economic knowledge that constitutes a commercial opportunity. A model introduces a ``knowledge filter' between new knowledge and economic knowledge and identifies both new ventures and incumbent firms as the mechanism that reduces the knowledge filter and increases regional growth. This paper tests the hypotheses that new venture creation is a better mechanism than the absorptive capacity of incumbent firms for converting new knowledge into economic knowledge. Our results support the contention that new venture creation is a superior method of penetrating the regional ``knowledge filter' than incumbent firms. The authors contributed equally to the article. We thank Attila Varga, Elaine Mosakowski, Jaehwan Kim, Tom Dean, Dean Shepherd, Joy Godesiabois, Mike Haynie, A. Mushfiq Mobarak, David Audretsch, Saras Sarasvarthy, David Deeds, and the participants at the Summer Institute at the Max Planck Institute for Study into Economic Systems for helpful comments and critiques. A version of this paper was presented at the 2004 Babson Kauffman Entrepreneurship Research Conference in Glasgow, Scotland. We also gratefully acknowledge the funding support provided by the Robert H. and Beverly A. Deming Center for Entrepreneurship at the Leeds School of Business, University of Colorado.     

Pan-European regional income growth and club-convergence

Club-convergence analysis provides a more realistic and detailed picture about regional income growth than traditional convergence analysis. This paper presents a spatial econometric framework for club-convergence testing that relates the concept of club-convergence to the notion of spatial heterogeneity. The study provides evidence for the club-convergence hypothesis in cross-regional growth dynamics from a pan-European perspective. The conclusions are threefold. First, we reject the standard Barro-style regression model which underlies most empirical work on regional income convergence in favour of a two regime [club] alternative in which different regional economies obey different linear regressions when grouped by means of Getis and Ord’s local clustering technique. Second, the results point to a heterogeneous pattern in the pan-European convergence process. Heterogeneity appears in both the convergence rate and the steady-state level. But, third, the study also reveals that spatial error dependence introduces an important bias in our perception of the club-convergence and shows that neglect of this bias would give rise to misleading conclusions.     

The role of universities in regional development Endogenous human capital and growth in a two-region model

This paper proposes a dynamic two-region model with human capital accumulation. This economic system is assumed to produce two commodities – one in each region. The only university in the economy which carries out higher education (=teaching) is located in region 1. The model describes the dynamic interdependence between human capital accumulation, regional division of labour, the spatial price structure under perfect economic competition, and the government intervention in higher education. Thus the analysis examines how differences in human capital improvements and environmental conditions between the two regions affect the economic geography. Received: October 1998/Accepted: April 2000     

Convergence and transition auspice of Chinese regional growth

This paper reconsiders the question of regional convergence in China. Barros convergence model and Theils regional inequality index are applied in the study. Analytical results reject the absolute convergence hypothesis in the Chinese case, but suggest a conditional convergence pattern. As for China as one system, it is further discovered that there exists a complex phenomenon that the three regions, the east, the mid and the west, converge to different equilibria respectively. Therefore, the mid and the west break through the existing system structure to reach the high level like that of the east is a crucial task of Chinese economic development. A detailed inversed U-shape analysis leads to two important findings. First, it discovers that the regional disparities between the east region and the rest of China are widening, while the regional disparity between the mid and the west is shrinking. Second, the Chinese regional economy has reached the critical point of divergence-convergence transition in terms of stages of national economic development according to Williamsons theoretical model. This gives the state government some room for doing something to make the convergence happen at an early possible time.Received: July 2002/Accepted: January 2003     

Impacts of regional development strategies on growth and equity of Korea: A multiregional CGE model

This paper is concerned with the assessment of major regional development strategies such as the three Coastal area development strategies (East Coast Development, South Coast Development, and West Coast Development) and the Seoul-Pusan development corridor strategy in terms of efficiency and equity. Multiregional Computable General Equilibrium for Korea is developed to capture the economic impact of regional investment expenditures, estimating the time-series influences of regional development alternatives on economic growth, inflation, welfare, income distribution, and interregional economic inequality for ten periods. In a sense that the main point of concern in the national development planning of Korea is with the question of improvement of national competitiveness with more equitable interregional income distribution, it is necessary to promote the West Coast region rather than the Seoul-Pusan development corridor. The West Coast regional development can lead to substantial gain in GDP and reduction in regional income disparity. In a multinational economic perspective, this regional development is expected to contribute to the economic cooperation of Northeast Asia and to enhancing the joint comparative advantages between China and Korea. However, it might worsen the income inequality in the long run. Received: September 1999/Accepted: September 2001     

Effects of digital transformation on electricity sector growth and productivity: A study of thirteen industrialized economies

This study examines growth patterns and sources of labour productivity growth and catch-up in the electricity sector. The study uses decomposition analysis to examine 13 industrialized economies from 2000 to 2015, a period of high growth in the sector. The study finds that total factor productivity and digital assets are the most powerful drivers of labour productivity growth and catch-up, while non-ICT assets have only a minor effect. Furthermore, labour quality outpaces R&D as a determinant of productivity. This study has implications for labour and industrial policy in the context of technological transformation and institutional restructuring in the electricity sector.     

Marshallian theory of regional agglomeration

Most models of regional agglomeration are based on the new economic geography (NEG) model in which returns to scale are pecuniary. We investigate the implications for regional agglomeration of a 'Marshallian' model in which returns to scale derive from technological externalities. Workers are assumed to have heterogeneous 'home region' preferences. The model is designed to explain how 'second nature' determines regional wage inequality and the regional distribution of economic activity. We show that agglomeration is not a necessary outcome of Marshallian externalities. However, if centrifugal or positive externalities are sufficiently strong relative to their centripetal or negative counterparts, the model generates multiple agglomerating equilibria. These equilibria multiply if, in addition, there are scale economies in amenities. A dynamic version of the model is developed in which external economies and inter-regional labour mobility grow over time. Regional wage inequality overshoots its long run equilibrium and, there is more agglomeration in the long run.     

Alternative regional specification and convergence of U.S. regional growth rates

We apply absolute beta convergence techniques to cross sectional per capita income data for alternative specifications of U.S. regions in order to detect whether U.S. regional growth rates are converging over relatively recent time periods. We also explore whether estimates of convergence differ between economic and political region specifications. We show that convergence of growth rates across regions of the U.S. has continued in modern times (1969–1997) for almost any regional specification and for all time frames considered. We do find, however, some difference in convergence rates between economic and political regions. Convergence coefficients, however, are remarkably similar across alternative economic region specifications. An earlier version of this paper was presented in February 2003 at the 42nd annual meetings of the Western Regional Science Association in Rio Rico, Arizona. We would like to thank our session participants in Rio Rico and three anonymous referees for helpful comments. Any remaining errors or oversights, however, are entirely our responsibility.     

When R&D matters for regional growth: A tripod approach

In modern economic growth theory, R&D and the subsequent production of new knowledge are the driving forces for long-term regional growth. Empirical evidence, however, does not always support this popular belief in the regional context. Using a simple growth accounting model, this study examines the role of R&D in regional growth. Estimation results from the proposed models show that knowledge commercialization and retention factors, such as entrepreneurship, university research, human capital, social capital, and industry structure, play significant roles in the regional R&D appropriation mechanism. Findings from this study suggest that R&D policy needs to be designed to take into account other regional factors.     

Network central: regional positioning for innovative advantage

This paper investigates the characteristics of regions that contribute to their positioning within the emerging innovative networks supported by the European Union’s Framework Program using a spatial-network approach. Although the importance of research collaborations in network formation has been generally recognized, relatively little research has investigated why some regions are able to attain prominent network positions, while others do not. We analyze a spatially detailed data base of EU Framework Program-supported research ventures in Austria to understand how specific geographical nodes come to occupy important positions within key research networks. The paper deploys what is termed here a network positioning function to investigate the question of network centrality and at the same time to illustrate the possibilities of combining network and spatial analysis to examine this or other research questions where similar approaches might be applicable. Findings reveal the factors important for understanding advantageous positions enjoyed by regional districts as measured by alternative centrality concepts. Concepts that distinguish innovation exploitation from exploration were used to interpret network positions, which further clarify positioning in highly localized versus distant member networks.     

Integrating models for regional development decisions: A policy perspective

This paper develops and demonstrates a combined set of models to capture regional development decision processes. The results of the models are then integrated along with other socio-political factors within a policy relevant decision methodology framework. The Haynes and Dinc (1997) extension of the shift-share model identifies regional industrial sectors for analysis based on their scale, productivity and sources of productivity change. By employing Data Envelopment Analysis (DEA), the efficiency of these lead sectors is investigated and the future competitiveness of these sectors is evaluated. By incorporating input-output analysis the impact of inter-sectoral transactions on sectoral efficiency is assessed. Since in most cases state economic development planning and implementation processes also involve political judgements, based on the findings of the above models, the study suggests a decision support framework which combines the above mentioned quantitative tools with other qualitative decision factors. An Analytical Hierarchy Process (AHP) is employed as a multi-objective decision making device to integrate the relevant policy components. Received: March 2001/Accepted: January 2002 The findings, interpretations, and conclusions are entirely those of authors, and do not necessarily represent the views of the World Bank, its executive directors, or the countries the represent.     

Telecommunications infrastructure and regional income convergence in China: panel data approaches

The conditional convergence framework constitutes the theoretical basis for different dynamic panel data approaches. But models with different specifications or estimated by different methods may have very different results. This study empirically tests the results by applying different panel data approaches to the study of telecommunications infrastructure in regional economic growth across China. Specifically, the pattern of regional economic growth across 29 regions in China from 1986 to 2002 is examined. The results suggest the system GMM estimation is more likely to produce consistent and efficient estimates than OLS and fixed-effect estimation. Findings indicate a significant and positive relationship between telecommunications infrastructure and regional economic growth in China and the empirical results from different estimations suggest robust results for this particular assessment. The authors wish to acknowledge the insightful and helpful comments of two anonymous referees that significantly raised the quality of this study. Any errors or misinterpretation are the responsibility of the author.     

Decomposing regional productivity growth using an aggregate production frontier

The main contribution of this paper is the implementation of a new model which combines the two parametric approaches most commonly used in the productivity literature: fixed effects and stochastic frontiers. This allows us to discuss whether it is better to use average or frontier functions to estimate regional productivity. The empirical section uses panel data of Spanish regions over the period 1980–1995. Additionally, we calculate and decompose total factor productivity growth for the Spanish regions.     

The two faces of R&D and human capital: Evidence from Western European regions

This paper investigates two channels through which R&D and human capital may affect regional total factor productivity growth in the manufacturing sector. Our model allows for both a direct effect on productivity growth, reflecting own innovation, and an indirect effect, reflecting imitation of frontier technology. The results provide evidence of a positive and significant direct effect of human capital, and a positive and significant indirect effect of R&D. Our estimates also suggest that R&D aids the imitation of technology from geographically close regions, while human capital raises productivity growth in regions that are closer to the frontier than their neighbours.