Geographical Concentration, Comparative Advantage, and Public Policy

This paper analyzes the geographical concentration and diversification of industries in the Continuum-of-Goods Trade Model in the presence of labor migration, comparative advantage, and external increasing returns to scale. In the model, higher transportation costs lead to concentration in one region, and lower transportation costs lead to diversification between the regions. For intermediate transportation costs, asymmetric diversification becomes a stable equilibrium through a reduction in the range of nontraded goods due to external increasing returns to scale and transportation costs. However, asymmetric equilibrium is an inefficient outcome: Pareto dominated by the other equilibria. To prevent this inefficient equilibrium, subsidies may be useful to sustain symmetric diversification.Concentration; Diversification; Transportation Costs; Comparative Advantage; Nontraded Goods; External IRS; Production Subsidy

Geographical Concentration of Rural Poverty in Bangladesh

This paper was presented at the dialogue on Mapping Poverty for Rural Bangladesh: Implications for Pro-poor Development. The dialogue was organised as part of CPD's ongoing agricultural policy research and advocacy activities with IRRI under the PETRRA project. The study reported geographical concentration of rural poverty in Bangladesh for 425 upazilas in 2000-01. The study measured and mapped incidence of poverty (using Headcount Index), intensity of poverty (using Poverty Gap Index) and severity of poverty (using Squared Poverty Gap Index). It has analyzed factors contributing to the spatial concentration of poverty. It is hoped that the findings of the study would be helpful in identifying target areas and priorities for agricultural R&D interventions and poverty reduction programmes.Poverty, Rural Poverty, Bangladesh

Social Overhead Capital Development and Geographical Concentration

In recent economic geography, it is emphasized that the effect of cost decreasing in transportation on agglomeration is nonlinear. It is said that the influence of traffic infrastructure investment and the change in transportation cost on urban agglomeration does not appear until the cost is below a certain amount, and that once agglomeration arises that effect would be kept with higher probability. In theoretical models such as Krugman (1991) and Fujita, Krugman and Venables (1999), multiple equilibria and path dependence are emphasized, as well as non linearity. Those models are intuitive, but it is hard to have a statistical analysis because of the non linearity. About the macroeconomic effect of social overhead capital investment, starting from the analysis by Aschauer (1985, 1989), a lot of empirical research has been done on the productivity effect of social capital. For example, we have Asako et al. (1994), Mitsui and Ohta (1995). Moreover, Roback (1982) uses the Hedonic approach to find the effect of amenity-based social overhead capital (related to waste disposal plants, or sewage facilities), followed by Mitsui and Hayashi (2001) for a Japanese case. In these Japanese studies, they are only concerned about the topic about inefficiency of the social overhead capital distribution but not about theoretical progress in urban economics. If Krugmans model is true, however, there is a possibility that rural traffic infrastructure investment for the purpose of redistribution will experience both a decline in rural areas and agglomeration into urban areas. In the following, we will examine general theory about how we should observe the effect of traffic network provision in section II. We will estimate a market potential function and an index with which the geographical concentration degree is measured, and see how the agglomeration degree has changed historically. In section II we will conduct analysis through using prefecture data and municipal data, particularly in the Kyushu district 2 .capital development, potential function, geographical concentration degree, Kyushu district, Japan, Public Policy, network effect

Geographical Concentration and Economic Growth: Do Externalities Matter?

Regardless of the reasons leading to its formation, it is widely accepted that geographical concentration of economic activity triggers increases in productivity. However, there are almost no studies that analyze the relationship between geographical concentration and economic growth. Moreover, when looking at the relationship between geographical concentration and productivity, past research almost unanimously modeled the underlying externality based on a scale measure (size) or an index. Starting from the assumption that the influence of geographical concentration on growth can be best modeled taking in consideration an intensive measure, such as population density, as an indicator of externalities, this study uses a growth accounting framework to assess the effect of geographical concentration on economic growth. It finds population density to be a good candidate for evaluating the externality influence, since a significant portion of the variation in economic growth over U.S. counties and BEA regions is explained by differences in population density.Economic growth, Externalities, Geographical concentration, Spatial models

Geographical Analysis of US Green Sector Industry Concentration

This paper analyzes the geographic distribution of “green energy” sector clustering in the lower 48 United States using recent developments in industry concentration analysis. Evidence suggests that the ten green energy subsectors and the aggregate of the firms comprising the green energy sector are regionally concentrated. Positive changes in industry concentration from 2002 to 2006 tended to be greatest in non-metropolitan counties, suggesting comparative advantage with respect to site location for the composite of firms making up these sectors.Agglomeration, Location Quotient, Renewable Energy, Community/Rural/Urban Development, Industrial Organization, Research and Development/Tech Change/Emerging Technologies,

Regional integration and specialisation patterns in Spain

The aim of this paper is to analyse how economic integration in Europe has affected industrial geographical concentration in Spain and explain what the driving forces behind industry location are. Firstly, we construct regional specialisation and geographical concentration indices for Spanish 50 provinces and 30 industrial sectors in 1979, 1986 and 1992. Secondly, we carry out an econometric analysis of the determinants of geographical concentration of industries. Our main conclusion is that there is no evidence of increasing specialisation in Spain between 1979 and 1992 and that the most important determinant of Spain¿s economic geography is scale economies. Furthermore, traditional trade theory has no effects in explaining the pattern of industrial concentration- L'objectiu d'aquest treball és analitzar com la integració econòmica a Europa ha afectat a la concentració geogràfica de les indústries a Espanya i explicar quines són les forces determinants de la localització industrial. En primer lloc, construïm índexs d'especialització regional i de concentració geogràfica per a les 50 províncies espanyoles i per 30 sectors industrials el 1979, 1986 i 1992. En segon lloc, realitzem una anàlisi economètrica dels determinants de la concentració geogràfica de les indústries. Les nostres conclusions més importants són que no existeix evidència d¿un augment en l'especialització a Espanya entre 1979 i 1992 i que el determinant més important de la geografia econòmica espanyola són les economies d'escala. A més a més, la teoria tradicional del comerç no explica el patró de concentració industrial

The geographical concentration of unemployment: A male-female comparison in Spain

This paper aims at complementing the approach presented by Johnston et al. (2003) with tools from the literature on economic geography and income distribution in order to perform a thorough analysis of the spatial concentration of unemployment. Apart from using such empirical procedures in the field of labour economy, the paper shows the complementarities that both approaches have when trying to look into distributive issues from a spatial perspective. For that purpose, the paper analyses the spatial distribution of unemployment in Spain, with a thorough analysis of the differences between male and female patterns.unemployment; spatial concentration; municipalities.

European Integration and Regional Specialization Patterns in Turkey's Manufacturing Industry

The dynamics of industrial agglomeration across the regions and the reasons for such agglomeration have been the focus of interest particularly in exploring the effects of economic integration of regions on the spatial distribution of economic activity. In this context, following the predictions of the literature on economic geography, Turkey’s integration with the European Union as a candidate member is a likely cause of changes in economic dispersion of the economic activity over the years. The major objective of the study is to complement the findings of the studies on industrial agglomeration in Turkey’s manufacturing industry by exploring whether specialization and concentration patterns have changed over time and to expose the driving forces of geographic concentration in Turkey’s manufacturing industry, particularly during Turkey’s economic integration process with the European Union under the customs union established in 1996. Industrial concentration and regional specialization are measured by GINI index for NUTS 2 regions at the 2-digit level for the years between 1992 and 2001. To investigate which variables determine industry concentration, the systematic relation between the characteristics of the industry and geographical concentration is tested. A regression equation is estimated, where the dependent variable is GINI concentration index and the independent variables are the variables that represent the characteristics of the sectors. The major finding of the study is that Turkey’s manufacturing industry has a tendency for regional specialization. Increase in the average value for regional specialization supports the prediction developed by Krugman that regions become more specialized with regional integration. But there is no evidence for increased industrial concentration in Turkish manufacturing industry, contrary to the expectations. As for the answer to which variables determine industry concentration, the analysis supports the hypothesis that the firms tend to cluster in regions where there are economies of scale and there are significant linkages between firms, supporting the predictions of new trade theory and economic geography.Regional specialization, geographical concentration, economic integration, geographical economics

The geographical concentration of labour market disadvantage

This paper argues that British ‘welfare to work’ policies are inadequate given the geographical concentration of worklessness in northern regions and in cities and former coalfields. While unemployment has been converging geographically, inactivity has not. All the ‘welfare to work’ target groups – youth unemployed, long-term unemployed, lone parents, the long-term sick and partners of the unemployed – have closely similar geographical distributions. Official arguments that there are adequate job vacancies everywhere are shown to be flawed. The geography of worklessness is largely explained by the weakness of adjustment through migration and commuting to the loss of jobs in manufacturing and mining, the cities being particularly affected by “urban-rural manufacturing shift”. Policy needs to promote more relevant employment in high unemployment areas, through increased spending on derelict land reclamation, transport and other infrastructure. The case for more supportive policies towards manufacturing should also be considered