6,205 research outputs found
TESTING THE NEG MODEL : FURTHER EVIDENCE FROM PANEL DATA
No full textLocal wage variations in the UK are explained by two non-nested rival hypotheses. The first derives from new economic geography theory, in which wages depend on market access. The second come from urban economics theory, giving a reduced form with wage rates dependent on employment density. The paper examines whether one of these rivals is encompassed by the other by fitting an artificial nesting model using three alternative panel data estimators. The estimates indicate that neither hypothesis is encompassed by its rival, suggesting a need for new, more comprehensive, theory.PANEL DATA, SPATIALLY CORRELATED ERROR COMPONENTS, MARKET ACCESS, NEW ECONOMIC GEOGRAPHY, SPATIAL ECONOMETRICS, NON-NESTED HYPOTHESIS
New directions in economic geography
No full textThis book explores original and alternative directions for economic geography following the revolution precipitated by the advent of so-called 'new economic geography' (NEG). Whilst, to some extent, the volume could be regarded as part of the inevitable creative destruction of NEG theory, it does promote the continuing role of theoretical and empirical contributions within spatial economic analysis, in which the rationale of scientific analysis and economic logic maintain a central place. With contributions from leading experts in the field, the book presents a comprehensive analysis of the extent to which NEG theory is supported in the real world. By exploring whether NEG theory can be effectively applied to provide practical insights, the authors highlight novel approaches, emerging trends, and promising new lines of enquiry in the wake of advances made by NEG
Estimating spatial models with endogenous variables, a spatial lag and spatially dependent disturbances: Finite sample properties
No full textThis paper discusses estimation methods for models including an endogenous spatial lag, additional endogenous variables due to system feedback and an autoregressive or a moving average error process. It extends Kelejian and Prucha's, and Fingleton and Le Gallo's feasible generalized spatial two-stage least squares estimators and also considers HAC estimation in a spatial framework as suggested by Kelejian and Prucha. An empirical example using real estate data illustrating the different estimators is proposed. The finite sample properties of the estimators are finally investigated by means of Monte Carlo simulation. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.
Exploring Brexit with dynamic spatial panel models : some possible outcomes for employment across the EU regions
No full textStarting with a reduced form derived from standard urban economics theory, this paper estimates the possible job-shortfall across UK and EU regions using a time-space dynamic panel data model with a Spatial Moving Average Random Effects (SMA-RE) structure of the disturbances. The paper provides a logical rational for the presence of spatial and temporal dependencies involving the endogenous variable, leading to estimates based on a dynamic spatial Generalized Moments (GM) estimator proposed by Baltagi, Fingleton and Pirotte (2018). Given state-of-the art interregional trade estimates, the simulations are based on a linear predictor which utilizes different regional interdependency matrices according to assumptions about interregional trade post-Brexit
A Time-Space Dynamic Panel Data Model with Spatial Moving Average Errors
No full textThis paper focuses on the estimation and predictive performance of several estimators for the time-space dynamic panel data model with Spatial Moving Average Random Effects (SMA-RE) structure of the disturbances. A dynamic spatial Generalized Moments (GM) estimator is proposed which combines the approaches proposed by Baltagi, Fingleton and Pirotte (2014) and Fingleton (2008). The main idea is to mix non-spatial and spatial instruments to obtain consistent estimates of the parameters. Then, a forecasting approach is proposed and a linear predictor is derived. Using Monte Carlo simulations, we compare the short-run and long-run effects and evaluate the predictive efficiencies of optimal and various suboptimal predictors using the Root Mean Square Error (RMSE) criterion. Last, our approach is illustrated by an application in geographical economics which studies the employment levels across 255 NUTS regions of the EU over the period 2001–2012, with the last two years reserved for prediction
Economic Geography with Spatial Econometrics: A 'Third Way' to Analyse Economic Development and 'Equilibrium', with Application to the EU Regions.
No full textFDI: a difficult connection between theory and empirics
No full textEconomic theory has not been delving extensively and systematically into the strictly related phenomena of Foreign Direct Investment (FDI) and Multinational Enterprise (MNE) until the 1980s. Two distinct circumstances have been favouring this recent renewed interest: a big surge in the former and a new space for the latter in the mainstream economic theory. FDI – the main way through which MNEs act – has been growing recently at an impressive rate (more than world trade), and that this growth has had the puzzling feature of concerning particularly the industrialised countries, which have been reciprocally engaged in such capital movements. The emergence of a new body of trade and location theory made it possible to enhance the understanding of this phenomenon.
The overall theme is on the frontier of the research in international trade and applied industrial economics, and it is complex and unsettled. The subject of this work is just to fix up ideas about some selected topics. Since the main topic of this book is new directions in economic geography, we will concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. Thus, we will avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times, as we recalled earlier. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so widely that it is almost impossible to make a meaningful comparison.
We concentrate here on those aspects of FDI which are more closely related to spatial aspects and which either support or oppose the prescriptions of NEG theory. We avoid organizing the discussion around the home-host country effects of FDI, which would force us to take into considerations elements which are beyond the scope here, such as the effects on employment in the source country or those on growth in the destination countries. This last topic, which is highly controversial, has been surveyed many times. We will look very briefly at the internalisation issue - which has traditionally been part of business economics - since the new trade theory is starting to incorporate it. Some more attention will be devoted to a widely discussed topic - the relationship between FDI and trade - since it gives interesting insights on the more recent theory of FDI coming out of the NEG approach. Studies inquiring about ‘location’ will be considered for the same reasons. Furthermore, the studies on transition-economies will be more extensively reviewed since they might represent a ‘laboratory’ test of the NEG in-so-far as FDI is occurring in a vacuum: no trade, high NT barriers, adverse institutions, and no tradition of FDI at all. Last but not least, we will not enter into the technical aspects of empirical evaluation, since the methods used - tools, data, sample, time span, and others – vary so..
Interview with Bernard Cache, author of "Earth Moves: The Furnishing of Territories" (MIT Architectural Press)
No full textWhere is the economics in spatial econometrics?
No full textSpatial econometrics has been criticized by some economists because some model specifications have been driven by data-analytic considerations rather than having a firm foundation in economic theory. In particular, this applies to the so-called W matrix, which is integral to the structure of endogenous and exogenous spatial lags, and to spatial error processes, and which are almost the sine qua non of spatial econometrics. Moreover, it has been suggested that the significance of a spatially lagged dependent variable involving W may be misleading, since it may be simply picking up the effects of omitted spatially dependent variables, incorrectly suggesting the existence of a spillover mechanism. In this paper, we review the theoretical and empirical rationale for network dependence and spatial externalities as embodied in spatially lagged variables, arguing that failing to acknowledge their presence at least leads to biased inference, can be a cause of inconsistent estimation, and leads to an incorrect understanding of true causal processes
Employment Resilience in Europe and the 2008 Economic Crisis: Insights from Micro-Level Data
No full textDoran J. and Fingleton B. Employment resilience in Europe and the 2008 economic crisis: insights from micro-level data, Regional Studies. This paper analyses employment resilience to the 2008 economic crisis using individual-level data from the European Social Survey (ESS) combined with NUTS-1 regional economic statistics. It models employment outcomes for individuals for 2002–08 and generates counterfactual outcomes for 2010 for individual-level employment assuming there is no recession. A resilience index, based on the difference between employment outcomes assuming actual economic conditions and a no recession counterfactual, is generated. Resilience varies substantially and is higher in German and French regions than in peripheral regions. Highly educated individuals, middle-aged individuals, unionized workers and men are more resilient.</p
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