International Regional Science Review recent issues

University-educated Labor, R&D and Regional Export Performance

Grasjo, U. — 2008-06-11

The main purpose of the study in this paper is to establish to what extent accessibility to R&D and university-educated labor can explain regional export performance. This is done by estimating knowledge production functions, with total export value and number of high-valued exports in Swedish municipalities from 1997 to 1999 as outputs. The results in the paper indicate that accessibility to university-educated labor has the greatest positive effects. The value of exported products is mainly affected by local accessibility to university-educated labor (and company R&D). The intra- and inter-regional accessibilities play a more important role when the number of high-valued export products in Swedish municipalities is the output.

Ports and Highways Infrastructure: An Analysis of Intra- and Interstate Spillovers

Cohen, J., Monaco, K. — 2008-06-11

U.S. ports serve a vital role in the nation's supply chain and international trade. While the areas surrounding these ports bear the external costs of port expansion (congestion, air and noise pollution), neighboring regions feel the benefits and additional costs from port activity. Given the current debate over external costs from port activity, it is important to quantify the costs and benefits of ports on industry in the home state and neighboring states. This study assesses the role that transportation infrastructure plays in production and employment in the manufacturing industry. Using state-level data from the 48 contiguous states, the authors model manufacturing production and cost, incorporating state and local investment in port and highway infrastructure as variables. The authors find lower manufacturing costs in states with increased ports infrastructure. However manufacturing firms experience higher costs if a neighboring state increases its ports infrastructure, perhaps because productive resources (firms and workers) are drawn to states that increase ports infrastructure.

Poverty in Michigan Small Communities: Demand Versus Supply of Labor

Nizalov, D., Schmid, A. A. — 2008-06-11

This article assesses the effect of labor demand and labor supply conditions on distribution of poverty across small communities in Michigan. The poverty model used for the analysis is based on the production behavior of the communities' residents, and is estimated using Census 2000 data. The difference in regional poverty rates is explained primarily by variation in the quality and quantity of communities' labor supply. Significant differences among rural, metropolitan, and metropolitan-adjacent communities are detected in determinants of poverty. In particular, a weak labor demand contributes to higher rates of rural poverty. Moreover, poverty rates are more persistent in rural areas and small towns. A higher average age of labor force is associated with a decrease in poverty rates. However, this effect becomes evident only after the ages of thirty-five to thirty-seven in rural areas, implying a slower accumulation of experience than in urban areas. Results imply that urban and rural poverty should be treated with area-specific policies that accommodate the difference in sources of poverty.

The Left Brain of North American Cities: Scientists and Engineers and Urban Growth

Beckstead, D., Brown, W. M., Gellatly, G. — 2008-06-11

Using pooled Census of Population data for 242 metropolitan areas, this paper evaluates the link between long-run employment growth and the supply of different types of skilled labor. It also examines factors related to the growth of a particular type of skilled labor—workers in science and engineering occupations. The first part of the article investigates the contribution of broad and specialized forms of human capital to long-run changes in urban employment from 1980 to 2000. It places particular emphasis on workers in science and engineering and culture occupations. The second part of the article focuses on factors that influence the growth of science and engineering employment across metropolitan areas. It examines whether the scientific capabilities of cities are influenced by amenities such as the size of the local cultural sector.

Integrating Survey and Remote Sensing Data to Analyze Land Use at a Fine Scale: Insights from Agricultural Households in the Brazilian Amazon

Caviglia-Harris, J. L., Harris, D. W. — 2008-03-07

The ability to model factors influencing land use can be significantly improved by incorporating variables derived from geographic information systems with more detailed survey data. While remote sensing data have the advantage of providing land cover measurements for large areas, survey data collected from households provide a more detailed account of land use. We estimate land use decisions in the Brazilian Amazon with land cover data derived from satellite images merged with observations from a household panel. We focus on the rapidly expanding cattle industry or ``pecuarizaçao'' (cattleization) as well as a potentially competing land use strategy: the planting and harvesting of annual and perennial crops. We identify spatial error in our initial estimations and as a result use corrected models of land use with greater explanatory power and efficiency. Estimation results indicate that both pasture creation and agriculture are determined by similar household and spatial characteristics; however, the impacts of these determinants are in opposing directions for both land uses estimated. We conclude from our survey and satellite comparisons that while remote sensing data may overestimate the extent of pasture, the overestimation is minor. Finally, based on the current extent of pasture, we also conclude that policy that focuses on reducing deforestation within these long-established settlements is most likely inefficient. Rather, policy that addresses the land use practices employed by recent settlers may be more effective in reducing further pasture creation.

Trade and the Industrial Specialization of Canadian Manufacturing Regions, 1974 to 1999

Brown, W. M. — 2008-03-07

Using a longitudinal micro data file of manufacturing plants (1974 to 1999), this study tests the relationship between trade and industrial specialization experienced by regional manufacturing economies. Consistent with trade driven by comparative advantage, the analysis demonstrates that export intensity (exports as a share of output) is positively associated with industrial specialization. This association is strongest in cross-section but remains, albeit weaker, when the data are differenced throughout time. The association between trade and specialization is strongest outside of urban areas and Ontario and Quebec, regions where trade is most likely driven by access to resource endowments. The association between trade and specialization weakens significantly after 1990, a period that corresponds with the rapid integration of the Canadian economy into the U.S. market resulting from trade liberalization.

Testing Heckscher-- Ohlin--Vanek Model Using Spanish Regional Data

Requena, F., Artal, A., Castillo, J. — 2008-03-07

The authors conduct an empirical study of the Heckscher—Ohlin—Vanek (HOV) model of trade using regional data rather than country data. Findings for Spanish regions suggest that relaxing the assumption of world factor price equalization alone is not enough to improve the performance of the HOV model. The supposition of world identical and homothetic preferences must also be relaxed. The authors also test whether Spanish regions share the same production techniques. Allowing for productivity-adjusted factor price equalization across regions or region-specific input—output matrices contributes very little toward improving the HOV model's predictive power, suggesting that the state of technology and choice of techniques is similar across Spanish regions.

The Shape of Ideas Production Function in Transition and Developing Economies: Evidence from China

Long Gen Ying, — 2008-03-07

This article contributes to the empirical understanding of ideas production in transition and developing economies from an international knowledge spillover perspective. Based on an extended form of the ideas production function of a nonscale endogenous growth model, the article estimates the shape of the Chinese ideas production function using a time-series pattern of Chinese patenting. While the empirical results corroborate recent findings on the shape of the ideas production function for Organization for Economic Cooperation and Development economies, the estimate also captures the positive evidence of foreign knowledge spillovers in the domestic production of new-to-China ideas. This evidence is important since it has empirically proved the possibility for the technological latecomer to grow depending on spillovers of the pioneer research and development (R&D). It also implies that Chinese R&D productivity growth depends on the simultaneous expansion of the domestic R&D-producing sector as well as the foreign knowledge stock in the Chinese market.

A General Equilibrium Assessment of the Impact of a Fall in Tourism Under Alternative Closure Rules: the Case of the Balearic Islands

Polo, C., Valle, E. — 2007-12-27

A look at the 1997 input-output table shows the Balearic Islands as a service-oriented economy, highly specialized in the production of services for tourists. The main goal of this article is to evaluate with alternative multisectoral models the impact on the Balearic Islands economy of a 10 percent permanent fall in tourism demand. First, we estimate the impact of the reduction in nonresident consumption using a rather standard input-output model. Then, we estimate its effects using an extended general linear model implemented with a social accounting matrix elaborated by the authors. Finally, we use an applied (computable) general equilibrium model using alternative closure rules to those encountered in other regional studies.

Shared Resources in Industrial Districts: Information, Know-How and Institutions in the Spanish Tile Industry

Molina-Morales, F. X., Martinez-Fernandez, M. T. — 2007-12-27

The aim of this article is to measure the effect of shared resources on individual firm performance. Using the Industrial District as a definition of the interorganizational context, the authors propose a model that includes a set of factors that are associated with the endowment of external resources, that is, collective information and know-how, and involvement in local institutions. To illustrate the theoretical argumentation, they develop an empirical study using a one hundred—firm sample from the Spanish ceramic tile industry to search for a statistical association between resource variables and performance of the firms. Finally, findings of the article suggest that to increase performance, firms must develop a distinct capacity so as to be able to shape and exploit shared or collective resources.

New Estimates of Returns to Scale and Spatial Spillovers for EU Regional Manufacturing, 1986 2002

Angeriz, A., McCombie, J., Roberts, M. — 2007-12-27

This article presents some new estimates of the degree of returns to scale for European regional manufacturing, for the period 1986—2002. To obtain these estimates, the article makes use of a Verdoorn law framework, estimating both demand- and supply-side versions of the law. Estimation is further embedded within a spatial econometric framework that allows for both ``substantive'' and ``nuisance'' sources of spatial autocorrelation. The former arises from cross-regional spillovers in the growth process, while the latter is a result of the use of the administrative NUTS1 definition of regions. Whereas the demand-side version of the Verdoorn law yields estimates of substantial increasing returns, the supply-side version is unable to refute the hypothesis of constant returns. It is argued, however, that the demand-side version is to be preferred on a priori grounds. The article also considers the static-dynamic Verdoorn law paradox and successfully confirms a recently proposed explanation of this paradox.

Comparative Approaches for Assessing Network Vulnerability

Grubesic, T. H., Matisziw, T. C., Murray, A. T., Snediker, D. — 2007-12-27

A common theme in analysis and evaluation of network-based critical infrastructure is the assessment of system vulnerability. Graph theoretic, simulation, and optimization-based techniques have played a significant role in examining potential network vulnerabilities given the insights they can provide for mitigating facility loss and prioritizing fortification efforts. Central to these approaches is the concept of facility (arc—node) importance or criticality to system survivability. Assessments of network vulnerability can dramatically differ based on how facility importance is characterized. In this review, various approaches for assessing facility importance and network vulnerability are examined. The key differences in these approaches are the ways in which a facility's role in maintaining network operability is evaluated given arc—node disruption. Comparative results suggest significant differences exist among measures of facility importance and network performance. Furthermore, the subsequent incongruities in these measures and their implications need to be clearly understood to support interdiction risk and vulnerability assessment for critical infrastructures.

Mobility and Mean Reversion in the Dynamics of Regional Inequality

Beenstock, M., Felsenstein, D. — 2007-09-10

The literature on regional growth convergence and economic disparities has tended to confound four interwoven measurement phenomena: 1) mean reversion (so-called beta convergence)—richer regions move towards the average from above and poorer regions from below; 2) diminishing inequality (so called sigma convergence)—the horizontal or spatial distribution of income becomes more equal; 3) mobility—the rank of a region in the overall distribution of income changes either upwards or downwards; and 4) leveling—the richer regions become poorer (leveling-down) or the poorer regions become richer (leveling-up). We use a new statistical methodology that treats these four phenomena on an integrated basis. The methodology is applied to Israeli regional earnings. We show that regional earnings are Gini divergent, but after adjusting earnings for regional cost-of-living differential, this picture is reversed. In the absence of genuine cost-of-living data, a simple and practical method is proposed, whereby regional house price data are used to proxy regional cost-of-living differentials.

Production Chains in an Interregional Framework: Identification by Means of Average Propagation Lengths

Dietzenbacher, E., Romero, I. — 2007-09-10

When linkages between industries are studied from the perspective of production chains, sequencing is important. In this respect, both the strength of the linkages and the distance between industries are relevant. Distance is measured by the average propagation length, defined as the average number of steps it takes a stimulus in one industry to propagate and affect another industry. Using the 1985 intercountry input—output table for six European countries, we present three applications—visualizing the production structure by graphing its production chains, analyzing intercountry linkages between industries, and determining the role that each country plays within the system.

Spatial Inequality in Productivity in the European Union: Sectoral and Regional Factors

Ezcurra, R., Pascual, P., Rapun, M. — 2007-09-10

To gain a deeper insight into territorial imbalances existing in the European Union, the authors analyzedthe evolution of regional disparitiesin productivity between 1977 and 1999. The results obtained reveal an overall decrease in regional inequality in productivity throughout the study period, even though the density functions estimated suggest the existence of some degree of polarization in the regional distribution of output per worker. The article also examines the role played by sectoral and regional factorsin productivity convergence, using a combination of shift-share analysis and various theoretical results obtained in the literature on personal income distribution. The analysis shows that regional inequality in output per worker in the European Unionis closelylinkedtointrinsic dif ferences between regions. Likewise,the empirical evidence highlights the importance of the national component and spatial location in accounting for observed dif ferences in sectoral productivity across the European regions. Finally, the findings supportthe relevance of one-sector growth modelsto explain per capitaincome disparitiesinthe European context.

Urban and Rural Differences in Use of Earned Income Credits: A Study of Minnesota's Working Family Credit

Hirasuna, D. P., Stinson, T. F. — 2007-09-10

This article examines receipt rates of Minnesota's earned income credit program by households on welfare from 1992 through 1999. We examine urban and rural differences in the rate of receipt throughout time and in the factors contributing to receipt. Our tabulations show that the central counties of the Minneapolis—St. Paul standard metropolitan statistical area (SMSA) have the lowest receipt rates, although rates are increasing for all regions and the disparities are diminishing through time. We find that a number of policy variables, household characteristics, and local labor market variables differentially affect receipt probabilities. Information from this research might help policy makers and designers of low-income programs construct improved policies that help families more quickly exit poverty.