Agglomeration and networks in spatial economics

Abstract. We consider the parallel developments in the economics of agglomeration and the economics of networks. We explore the complementarities between the productivity benefits of agglomeration and those of network linkages, arguing that networks of actors dispersed over space may substitute for agglomerations of actors at a single point.     

Comparing China's city transportation and economic networks

The urban system has been a prevailing research issue in the fields of urban geography and regional economics. Not only do the relationships between cities in the city system exist in the form of rankings, but also in a more general network form. Previous work has examined the spatial structure of the urban system in terms of its separate industrial networks, such as in transportation and economic activity, but little has been done to compare different networks. To rectify this situation, this study analyzes and reveals the spatial structural features of China's urban system by comparing its transportation and economic urban networks, thus providing new avenues for research on China's city network. The results indicate that these two networks relate with each other by sharing structural equivalence with a basic diamond structure and a layered intercity structure decreasing outwards from the national centers. A decoupling effect also exists between them as the transportation network contributes to a balanced regional development, while the economic network promotes agglomeration economies. The law of economic development and the government both play important roles in the articulation between these two networks, and the gap between them can be shortened by related policy reforms and the improvement of the transportation network.     

Relational competence in complex temporary organizations: The case of a French hospital construction project network

Large and complex project networks are characterized by the collaboration of heterogeneous organizations and individuals. In addition to project management techniques and complementary skills, relational competence, i.e. the ability to actively create and develop collaborative relationships is an essential asset for managing project networks. Networks represent structured role systems which may be a substitute for stable organizational structures and routines. This study investigates relational competence in the network of a large construction project of a French hospital. Based on network data and qualitative interviews, we compare the formal roles and positions of actors in the network to their actual roles and positions and analyze how relational competence promotes the coordination of project work. We find several actors whose network position and relational competence correspond to the formal organization and several actors with a mismatch between the formal organization and the actual role and position. In the latter cases, other network members step in and contribute to an effective coordination. The concept of relational competence in combination with network analysis contributes to a better understanding of the functioning of project networks. In particular, it reveals dysfunctions in the project network and allows for identifying the reasons for failure.     

Inter-regional networks and productive efficiency in Japan

Traditional agglomeration theories cannot explain Japan's sustained reduction of regional disparities. This study employs stochastic frontier analysis to investigate the role of inter-regional networks in improving productive efficiency using the concept of “borrowed size.” Improved inter-regional networks are a driving force for strengthening local economies and converging regional disparities. Borrowed size from large city agglomeration was highly effective in local areas. The development of transportation networks has enabled local areas to catch up to large metropolitan areas. The results suggest that the development of high-speed transportation networks can help to reduce regional disparities in the Japanese economy.     

Megaprojects as organizational platforms and technology platforms for value creation

Megaprojects are multi-actor and multi-technology constellations that create value for society. Previous research on joint and coordinated activities to create value for multiple actors in megaprojects over system lifecycle is scarce. This study explores how the actors in a megaproject jointly create value. We analyze value creation in megaprojects by theorizing on the research on organizational platforms, which draws together knowledge from research on other types of platforms, ecosystems and networks. In our empirical study, we analyze a city district renewal megaproject, by focusing on the actors' joint activities that contribute to synergetic project processes, solutions and outcomes both tangible and intangible that participating actors find beneficial. We derive five propositions that explain how actors in a megaproject create value through jointly planned and governed design principles, and through value-leveraging activities. Jointly planned and governed design principles include inter-organizational coordinating bodies and joint activities that share ownership and decision-making. In value-leveraging activities, leader actors facilitate megaproject actors' competition and value capture that determine most suitable participants to value-creating activities.     

The spatial distribution of inventor networks

Inventor networking has become both more feasible with improved telecommunication and more important as it usually produces research of higher quality. Despite overwhelming evidence on the benefits of collaboration, patent data from 1994 to 2001 in Sweden demonstrate that inventor networks are not very common. Moreover, the spatial distribution of inventor networks is not uniform. It appears that agglomeration measured both as employment density and as industry diversity, plays a role in explaining networking. Our results indicate that inventor networks are more likely to exist in densely populated areas with a diversified industry. Market size has a negative impact on networking in that we can observe that inventor networks are less common in large metropolitan areas, ceteris paribus. Hence, it supports the proposition that networking can act as a substitute to agglomeration. Our results also suggest that researchers in dense areas will not only collaborate more; they will also collaborate over longer distance.     

THE IMPACT OF CHANGING BUSINESS AGGLOMERATION ECONOMIES ON METROPOLITAN GROWTH

ABSTRACT This paper aims to determine the impact of changes in the parameters measuring economies of scale in production on metropolitan growth. The degree of spatial concentration of sectoral economic activity and patterns of trade between two metropolitan areas are explained with a two-sector model borrowed from the international trade literature. It is shown that sectoral production will become more concentrated as the importance of intrasectoral economics of scale relative to intersectoral scale economics increases. An increase in the relative size of intrasectoral business agglomeration economics will not necessarily lead to complete specialisation by either metropolitan area.     

DIVERSITY IN URBAN LABOR MARKETS AND AGGLOMERATION ECONOMIES

ABSTRACT A modern economy is characterized by diverse mid specialized urban labor markets. In this paper, agglomeration economics are explained by labor specialization in these markets. With increasing returns to scale and with heterogeneous labor and technology. I show that average productivity increases with the size of the market because of better matches between workers and firms. Thus, the net wage increases as the size of the market increases.     

城市群新认知:一种中间体组织

城市群是城镇化发展到一定阶段的客观产物,具有地理接近性与关系接近性两大核心特征。作为一种介于市场经济组织和行政科层组织之间的中间体组织,城市群的出现与成长为解决城市间分工演进与交易费用之间的两难选择提供了一种有效率的交易体系、市场结构与制度安排。在中国,城市群具有双重战略角色:对内是区域空间演变与联系深化的有机整体;对外是接轨全球经济和参与全球竞争的重要单元。     

Determinants of courses of action in bioenergy villages responding to changes in renewable heat utilization policy

The Energiewende in Germany includes organizational innovations for the provision of renewable energy to rural communities, often referred to as “bioenergy villages”. These villages have dealt with frequent regulatory and economic changes, but little is known about what determines their response to such changes. We investigate courses of action in five villages in the federal state of Brandenburg (Germany) in response to changes in the regulatory framework promoting better utilization of surplus heat from biogas facilities. Our comparative case study method draws on interviews with village stakeholders and complementary material to scrutinize action situations and focal transactions in bioenergy value chains. A framework combining institutional economics and value-chain approaches guides our analysis. The findings suggest that linkages between action situations in bioenergy villages can facilitate accommodation of conflicting expectations of village actors in their responses to future changes, as they create opportunities and enhance capabilities to balance interests of actors and promote cooperation and coordination across value chains. Village and higher-level policy aiming to future-proof villages’ facilities against challenges of the Energiewende could capitalize on linkages of action situations across bioenergy value chains.     

Does the high-speed rail network improve economic growth?

This paper discusses whether high-speed rail (HSR) construction in China promotes urban economic growth, and it uses social network analysis (SNA) and a panel threshold model. We provide robust evidence that HSR networks have non-linear effects on the urban economy. Urban location and transportation hub status change as the density of HSR networks increases, and from 2008 to 2017, the national average annual growth rate of the weighted degree centrality (WDC) was 44.93%. We find the WDC and betweenness centrality (BC) have positive influences on urban economic growth. However, HSR network expansion reduces the economic benefits of HSR because the marginal contribution of new HSR lines to economic productivity decreases and there is a crowding out effect caused by excessive agglomeration. HSR networks can promote the economy of Western China to a greater extent and can promote the economy more in small cities than in large and medium-sized cities. These findings can help the government rationalize its strategy for designing HSR lines in various regions.     

Production technology and agglomeration for Japanese prefectures during 1991–2000*

We analyse the seemingly unrelated regression (SUR) models with spatial dependencies from a Bayesian point of view and estimate the parameters of the models using a Markov chain Monte Carlo (MCMC) method. Further, we analyse the production technology and the economics of agglomeration in Japanese prefectures from 1991 to 2000, simultaneously taking into account spatial and serial correlation. Model comparison is done via log‐marginal likelihoods, and it is found that the spatial error SUR model is the best model and that the economics of agglomeration and spatial heterogeneity decreased over this decade. Resumen. Analizamos modelos de ecuaciones aparentemente no relacionadas (SUR, siglas en inglés) con dependencias espaciales desde un punto de vista bayesiano y estimamos los parámetros de los modelos utilizando el método de Monte Carlo basado en cadenas de Markov (MCMC). Además, analizamos la tecnología de la producción y las economías de aglomeración en prefecturas japonesas desde 1991 a 2000, teniendo en cuenta simultáneamente la correlación espacial y serial. La comparación de modelos se realiza mediante verosimilitud log‐marginal, y se encontró que el error espacial del modelo SUR es el mejor modelo y que las economías de aglomeración y la heterogeneidad espacial disminuyeron durante esta década.      

关于土地和房地产开发过程中结构与能动作用的研究思路

本文对当前针对土地和房地产开发过程的研究以及研究方法进行了评论；指出包括制度分析、新古典区位理论、土地经济学以及马克思经济学在内的研究方法，尽管有助于我们理解土地和房地产的开发过程，却无法对上述问题的一个最基本层面做出解释，即开发者配置资源以实现特定投资目的的行为（这一点在众多房地产研究文献中被提及）以及促使不同参与者制定战略和谋求利益的更广泛的过程两者之间的关系。本文提出了一种研究方法，将有关结构与能动作用两者的理解联系起来，将问题的焦点置于资源、规则以及被参与者所认同的观念上，以便更好地了解土地和房地产开发过程，并总结了一些由此观点引申而来的关键性研究课题。     

Interregional economic growth with transportation and residential distribution

The paper proposes a model of interregional economic growth model with travel time, housing, residential distribution, and amenity. The economy consists of multiple regions and each region consists of the CBD and the residential area (like in the standard Alonso model). All the markets are perfectly competitive. The paper demonstrates a way to integrate some important models in the literature in transportation research, economic growth theory, urban economics, and regional economics. The simulation results for a 3-region economy provide some interesting insights into national economic development, regional agglomeration, and urban configuration. We demonstrate, for instance, that when the technologically most advanced region improves its transportation conditions, the national output is increased, the advanced region attracts more people from the other two regions, the advanced region’s industrial and housing output levels are increased, the other two regions’ output levels are reduced, the land and housing rents and residential distribution in the advanced region are reduced near the CBD and increased far away from the CBD, and the land and housing rents and residential distribution in the other two regions are reduced over the entire residential areas.     

Understanding urban sub-centers with heterogeneity in agglomeration economies—Where do emerging commercial establishments locate?

This paper investigates the formation of employment sub-centers from a new perspective of heterogeneity in agglomeration economies. Using highly granular commercial and residential land-use data (2001–2011) in Chicago, we measure how the locations of jobs, population, quality-of-life amenities, and transportation networks shape specific and heterogenous sub-centers. First, the results suggest that the CBD as it was traditionally defined is no longer the primary source of agglomeration externalities for the new economic sectors; sub-centers with sector-specific positive agglomeration externalities have stronger correlations with new commercial establishments. Secondly, residents appear to give the highest weight to quality-of-life amenities in choosing where to live. Both trends imply dis-incentives for CBD agglomeration. These findings connect the heterogeneous production theories with land use planning and urban design, through new empirical insights into how urban sub-centers grow. Furthermore, we put forward a method for forecasting of future sub-center growth through measuring changes in the probability of commercial development, and discuss its practical implications for planning and design in Chicago.     

Network governance in action: the case of Groningen complex decision-making in urban regeneration

Theories on network governance constitute a promising approach to a better understanding of complex decision-making and problem-solving. Network theories are increasingly used in housing research. In this paper we present case-study findings on urban regeneration decision-making in Groningen, a medium-sized city in the North of the Netherlands. We used a network governance approach as an analytical framework. Social landlords and local government in Groningen have been collaborating in urban regeneration processes for many years. In 2006 negotiations between these actors on a renewal of the Local Urban Regeneration Covenant ran into difficulties and encountered seemingly insurmountable differences of opinion. These difficulties were largely caused by the increased complexity of the decision-making process, the large number of actors involved and a shift in focus from ‘bricks-and-mortar’ investments to a more balanced approach including social and economic aspects of urban regeneration. In this paper we analyse decision-making on urban regeneration policy in Groningen over the past 10 years. The outcomes of the case study demonstrate the usefulness of the network approach as a framework to analyse decision-making processes. The paper also identifies strategies used by actors in the field to successfully deal with complexities and uncertainties in networks.     

Preserving Community through Radical Collaboration: Affordable Housing Preservation Networks in Chicago,Washington, DC,and Denver

Collaborative planning efforts to address complex problems such as affordable housing and climate change traditionally manifest as government-led processes meant to gain legitimacy and engage with multiple types of expertise. These types of processes, however, can leave nonprofit actors constrained by the policy priorities of government-led collaborations due to their ability to reproduce existing power relations. Using a qualitative case-study approach of affordable housing preservation networks in Chicago, Washington, DC, and Denver, we argue that preservation of affordable housing can benefit from what we call radical collaboration. We define radical collaboration as an animated network of actors working towards a shared frame of collective action. It is an approach, often led by community-oriented non-governmental organizations, that seeks to transform the ways disadvantaged groups access the city. Actors in the collaboration bring diverse resources that include funding, data, regulatory power, and portfolio-wide information to solve building-level and broader policy challenges.     

Analysing construction project coalitions: exploring the application of social network analysis

The construction industry is currently in transition as a result of innovations in procurement and project management approaches, in particular, the utilization of supply chain management, and technology or work clusters in the context of partnering relationships between project coalition actors and the client organization. These new strategies require an analytical method that deals with actor interdependence and provides an appropriate level of detail and quantitative data in relation to the non‐linear, complex, iterative and interactive process that construction projects comprise. The construction project is conceptualized as a number information exchange networks, classified according to the principal project functions and supported by performance incentive and contractual relationship networks. The point centrality of the project actors within these various networks provides quantitative data and graphical representation of the governance of construction projects and the changes brought about by innovations in procurement and project management techniques. Social network analysis (SNA) provides an important new quantitative approach in the comparative analysis of procurement and project management of construction projects. SNA enables traditional project coalition management approaches to be compared with those associated with innovative management approaches. Quantitative analysis relates to the appropriateness and effectiveness of both financial incentives and contractual conditions involved in the governance of construction projects.     

Rethinking the city and innovation: A political economic view from China's biotech

The city is arguably where innovations concentrate. Agglomeration and diversity are two major explanations for why innovations concentrate in the city. Existing studies tend to focus on knowledge dynamics, in particular interfirm networks, while paying insufficient attention to the process of urban development in which knowledge dynamics are materialized. We concur that the city itself does not possess such a power for innovation (Shearmur, 2012). Rather, it is an arena where various actors exert impacts on knowledge dynamics. In a view from China, we reveal why bio-tech innovations concentrate in particular places and what political economic processes contribute to such concentration. We highlight the need for a political economic analysis in economic geographical studies of innovation.     

Defining resilience for the US building industry

ABSTRACT

Initiatives to operationalize the concept of resilience in the building industry are rapidly emerging. The concept of resilience has introduced a way to explore solutions to some important problems in the building industry. However, much of the work that has taken place to date represents activities generally assigned to risk management, which is discussed as being inherently insufficient for sustaining the functions of the built environment under stresses. This commentary considers the opportunities and limitations for mainstreaming resilience into building industry processes and actors. Barriers include indeterminate analytical meaning, event and performance uncertainty, immature regulatory standards setting, and untested enterprise economics. Further, the multiple outcomes of recovery and the relationship between building recovery and adaptation are discussed and, along with economics of resilience investments, a research need highlighted. A simple heuristic is presented to illustrate the complement of resilience to risk management and advance the integration of resilience into existing industry workflows.