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This study develops two novel agglomeration indexes, combining the feature unbalance agglomeration index family and the distance-based agglomeration index family, to measure innovation agglomeration. We examine the positive effects of innovation agglomeration on the industrial total factor productivity (TFP). We discuss the factors driving the innovation agglomeration at the city level and analyze them in cities of the Yangtze River Delta (YRD). We find proximity to central cities and nearest ports has a positive impact, industrial level has an inverse U-shape impact, investment and commercial culture have positive impacts, and innovation policy has a negative impact. We identify five innovation agglomeration factors and discuss their effects on the theoretical and practical R&D management applications and strategies. [ABSTRACT FROM AUTHOR]

We revisit the natural experiments of division and unification of Germany. The negative shock to local market access following the division of Germany led to a fast and strong downward adjustment of the size of West German cities near the new border. In contrast, the positive shock of reunification did not lead to any change in their relative size. Even three decades after reunification, no convergence can be observed. We show that local subsidies to East Germany could have contributed to this asymmetry in time. [ABSTRACT FROM AUTHOR]

In recent decades, renewable energy cooperatives have substantially increased their share of renewable energy production. The operation of these cooperatives requires collective action, potentially supported by local social capital. We investigate whether municipal-level bonding and bridging social capital explain the differences in the prevalence of renewable energy cooperatives across Dutch municipalities. We measure social capital directly from social network structures within and between municipalities, thus overcoming limitations of using proxies. Our empirical results reveal that bonding rather than bridging social capital supports renewable energy cooperatives, shedding new light on the role these types of social capital play in regional development. [ABSTRACT FROM AUTHOR]

A growing body of urban research takes a natural science perspective on systems of cities as self-organising human clusters. From a systems perspective, this work, particularly the growing number of city scaling studies, introduces a determinism to studies of city size, efficiency and performance that may not sit well with regional science and urban economic planning models. It finds that agglomeration economies seem to follow regular scale-free power laws that reflect competitive dynamics within an entire interacting human system of cities and that a city's performance is therefore statistically bounded by the whole system. Where does this leave empirical models of individual city performance and behavioural models of urban political economy that underpin them? The paper links two seminal economic models of the 20th century that were motivated to demonstrate the possibility of preference revelation for the 'unpriceables' that give cities their value. Tiebout's and Coase's models of social order both concern natural clustering principles, governed by voting with feet, voice and price. Voting with feet is a much more animalistic social ordering mechanism than voting with voice and the paper introduces the idea of scale-free Tieboutian models—natural science models of revealed preference for local public expenditure. [ABSTRACT FROM AUTHOR]

This article offers new evidence on agglomeration economies by examining the link between total factor productivity (TFP) and employment density in Italy. We investigate whether and how the TFP–density nexus contributes to explaining a relevant share of the marked productivity gap between the northern and the southern Italian regions. We estimate TFP for a large sample of manufacturing firms and then aggregate it at the level of local labour market areas. We tackle the endogeneity issues stemming from the presence of omitted covariates and reverse causation with an innovative set of diagnostic tests and an instrumental variable approach that relies on geological and historical data. Our estimate of the TFP elasticity to the spatial concentration of economic activities is about 0.045, a magnitude comparable to those measured for other developed countries. We also show that no significant heterogeneity emerges in the intensity of agglomeration economies across the country and that the positive TFP difference in favour of the firms located in the North is not due to the tougher competition taking place in those areas. [ABSTRACT FROM AUTHOR]

Agglomeration externalities are the key factor explaining the existence of cities and their size. However, while the various micro foundations of agglomeration externalities stress the importance of total factor productivity (TFP), the empirical evidence on agglomeration externalities rests on measures obtained using firm revenue or value-added as a measure of firm output: revenue-based TFP (TFP-R). This article uses data on French manufacturing firms' revenue, quantity, and prices to estimate TFP and TFP-R and decompose the latter into various elements. Our analysis suggests that the revenue productivity advantage of denser areas is mainly driven by higher prices charged rather than differences in TFP. At the same time, firms in denser areas are able to sell higher quantities and generate higher revenues, despite higher prices. These and other results we document suggest that firms in denser areas are able to charge higher prices because they sell higher demand/quality products. In this respect, two key elements related to this capacity to sell more at higher prices are the degree of vertical differentiation and trade cost, with products characterized by higher vertical differentiation and/or lower trade costs featuring stronger patterns and driving overall results. [ABSTRACT FROM AUTHOR]

Digital platforms, such as Google, Amazon, or Instagram, provide a promising spatial fix to urban-economic problems by leveraging technology and data while connecting stakeholders and overcoming spatial barriers to make urban life, consumption, sales, and production more efficient. This article contributes to the debate on digital platforms in economic geography by advancing the emerging lens of the platform fix, adopting a critical standpoint concerning the solutionist viewpoint that presents platforms as a fix for various challenges. The article develops its perspective against the background of 57 semi-structured interviews, 200 conducted standardized questionnaires, and long-term on/offline observations. We aim to provide a platform fix perspective revealing how digital platforms redefine spatial interactions, addressing economic challenges through spatial fixes while becoming established as indispensable infrastructures; however, platform fixes often fail to address underlying issues, leading to platform dependencies and the instrumentalization of actors. Therefore, we suggest a cautious application of urban platforms as solutions and critically evaluate the formation of public–private platform partnerships. [ABSTRACT FROM AUTHOR]

Export performance is a highly debated topic in the literature, with no consensus on how to measure it or what factors determine it. Most studies divide these factors into internal and external determinants, with a focus on internal determinants. This study, however, focuses on external determinants, namely agglomeration economies such as localization and urbanization economies and export spillovers, and their impact on a firm's export intensity. Based on a large sample of Portuguese manufacturing SMEs over the period 2010 to 2018 (191,920 firm/year observations), the estimation results through the two-stage least squares method with fixed effects strongly indicate the existence of a positive relationship between agglomeration economies, particularly localization economies and export spillovers, and export performance. These findings suggest that firms located in areas with a high concentration of other firms in the same industry and other exporting firms tend to have better export performance, which has important implications for policymakers. [ABSTRACT FROM AUTHOR]

New firms have been regarded as one of the key elements for local development. Existing studies focus on the direct impact of new firms via labour markets and job creation. However, the impact of new firms on regional innovation is less investigated. Our analyses are conducted for a developing country, Turkey. Findings of the study show that new firms are crucial for the regional differences in innovation. Results are robust to spatial dependence, an alternative firm formation measure, various regional controls and endogeneity issues. Additionally, impact of the new firms is spatially non-homogenous reminding the ineffectiveness of one-size-fits-all type policies. [ABSTRACT FROM AUTHOR]

During the early days of the initial outbreak of the novel coronavirus disease 2019 (COVID-19) in Japan, preschools were exempt from nationwide school closures, which came into effect on March 2, 2020. In addition, Japan is unique in that it experienced preschool closures without any heavy restrictions on daily life activities, making it possible to separate the effects of preschool closures from those of other anti-COVID-19 policies such as lockdown measures. This study conducted a placebo test that revealed that the decision to close or keep preschools open was left to each facility and the municipality where they were located and was characterized by relatively high randomness. Based on these advantages, we explored the effects of children's preschool absence during March 2020 on mothers' psychological distress. Our results showed that preschool closures caused immediate deterioration in mothers' psychological states, with moderate psychological distress persisting for at least 5 months. [ABSTRACT FROM AUTHOR]

This article shows that inherited cultural diversity at the regional level generates a positive wage externality. We use administrative panel data on formally employed individuals in Rio Grande do Sul in Brazil from 2008 to 2013 and apply machine learning to infer the ancestry of workers from their surnames. We distinguish inherited diversity from birthplace diversity and use the plausibly exogenous location of former colonies to build an instrumental variable. The positive wage externality of inherited diversity withstands alternative explanations such as institutional quality, municipality size, human capital externalities, individual productivity differences, and sorting of workers. [ABSTRACT FROM AUTHOR]

Low interest rates were introduced in the global economy to support the weak economic growth that followed the global financial crisis. In the real estate sector, low interest rates usually lead to a boom in investment and prices. This boom, however, is not spread throughout the economy, but rather concentrated in major cities. We demonstrate this phenomenon on the example of the office market in Warsaw (Poland). While it would be beneficial for the Polish economy to develop office space in smaller cities that have an insufficient supply of modern office space, investors have focused mainly on the capital. This has not only led to an increase in the cost of building land and construction, but has also pushed some relatively new existing office buildings off the market. We call such behaviour uncreative destruction and explain why it was possible.

The existing stream of empirical literature on regional inequalities has always adopted a retrospective look by analyzing the past evolution. We depart from the main stream by adopting a future perspective: Will regional inequalities shrink over time? How will the shape of income distribution evolve? Will spatial dependency increase? In the current paper, we forecast the long-term trajectory of per capita real personal income for U.S. states using the ARIMA model. We estimate the future of disparity level (for 2050 and 2090), the shape and spatial pattern of income distribution, convergence trend and spatial dependence by the help of inequality indexes (Atkinson, Coefficient of Variation, Theil) Kernel probability density distributions, explorative maps and Moran's I test. The dataset includes 48 coterminous U.S. states over the period 1929–2022. A set of important results appeared to emerge as an outcome of the empirical analyses: First, income disparities are expected to increase over the long-term period that implies a divergence pattern. Second, the forecasted shape of the income distribution is bi-modal and polarized, therefore, pointing to a widening of the inequalities. Third, the geography of the prosperity is projected to change in a way that the geographical position of high and low-income areas will change. Fourth, spatial dependence in per capita income is expected to fade away in the future. From a political stand point, additional resources should be devoted to the states that are expected to become backward (for some states in Northeast and Southwest) in order to maintain territorial cohesion. [ABSTRACT FROM AUTHOR]

This paper analyses regional competitiveness at the subregional level through a novel methodological approach that adopts a matching design. By comparing the performance of similar firms in different parts of the region, it is possible to detect whether different places provide different competitive territorial assets. Using data for Lombardy, a large and competitive European region, the analysis shows that the different territories of the region are differently competitive in different industries, even when they are similar in terms of total GDP per capita or specialization. The paper also confirms that measuring competitiveness on different indicators (Labour Productivity, TFP, Profitability) can provide different results, and this especially happens when comparing static and dynamic indicators. The methodology presented here is especially relevant to the design of regional policies, that are mostly deployed at the NUTS-2 level but would benefit from accounting for the presence of strongly dis-homogeneous territories inside the same region. [ABSTRACT FROM AUTHOR]

Interest in regional convergence in mean incomes has been rekindled by findings that suggest a shift from convergence to divergence. While the majority of existing research has explored convergence in mean incomes, this research focuses specifically on the convergence/divergence of interpersonal income distributions across regions, referred to throughout the study as comparative inter-regional inter-personal income distributions (CIRIPID). The findings suggest that CIRIPID, as measured by the Gini coefficient, converge across countries, but that heterogenous trends are visible within countries. The results highlight that in some countries regions are becoming equally more unequal, while others see regional Gini coefficients trend towards a lower level of inequality. The study also explores the impact of systems of government on CIRIPID. In addition, the study draws on the convergence club methodology to identify heterogeneous CIRIPID convergence paths within countries. [ABSTRACT FROM AUTHOR]

We argue that trans-local knowledge connections positively impact local epistemic inventor communities in global cities, using patent citations as an indicator of global knowledge connectivity. Patented inventions have become more concentrated in the most internationally connected global cities, increasing inter-regional inequality. We identify two dimensions of knowledge connectivity: the compatibility of connections between similar profiles of technological knowledge, and the geographical diversity of knowledge connections between differently specialized global cities. We suggest that interaction between local and international inventor epistemic communities is now a vital driver of local innovation in global cities, and interregional inequality between these and other cities. [ABSTRACT FROM AUTHOR]

This paper investigates the growth and clustering of craft breweries in New Jersey. We compiled a historical dataset from 1995 to 2020 that allows us to measure the degree of geographic clustering among craft breweries in New Jersey. The number of craft breweries in New Jersey grew 491% from 2012 to 2020 (from 22 to 130 craft breweries). An impetus for this growth was that New Jersey enacted legislation in 2012 that made opening and operating a craft brewery in the state more economically viable. Our analysis finds that craft breweries in New Jersey are clustering in specific parts of the state and that this is likely due to co-location benefits such as building a culture of craft beer that drives innovation, knowledge sharing, customer sharing, and a thicker labor market. While distinct craft beer clusters have formed in New Jersey, we find there is still significant opportunity for growth. Our analysis confirms this using data on planned craft brewery openings to measure changes in the size and density of clusters and where, in New Jersey, new clusters are likely to form. [ABSTRACT FROM AUTHOR]

Limited access to regional and sectoral economic data hinders effective policy design in various countries. To address this issue, this study explores the potential of higher-quality nighttime light (NTL) data to predict economic activity across various sectors within regions. We analyze the relationship between NTL intensity and sectoral GDP in 81 Turkish provinces from 2004 to 2020. Our findings reveal that urban NTL data is most strongly correlated with non-agricultural GDP, particularly in the industrial sector. This suggests that NTL data, especially its urban component, can be a valuable tool for policymakers to identify economically disadvantaged regions and sectors, monitor the impact of economic development policies at a granular level, and allocate resources efficiently. However, this study also acknowledges limitations in capturing annual GDP changes, highlighting the need to combine NTL data with other economic indicators for a comprehensive understanding. [ABSTRACT FROM AUTHOR]

We investigate the economic effects of the Russia–Ukraine conflict – following the 2014 annexation of Crimea – on Russian border regions. While southern regions gained market access to Crimea, northern regions lost market access to Ukraine. Using nighttime lights data and geo-referenced plant-level data, we find that regions with deteriorating market access saw 43% less growth in lights – translating into 6–12% lower growth in GDP depending on the assumed lights-GDP elasticity – and a 35% increase in the exit probability for manufacturing plants after 2014. Exploiting variations in closed local border crossings in the northern regions, we find that these effects may be partly driven by less cross-border labour flows. [ABSTRACT FROM AUTHOR]

The literature on the impacts of transport corridors points to a tradeoff between income and environmental quality. We estimate the impacts of India's Golden Quadrilateral and North-South-East-West highways on income and environmental quality to test this tradeoff hypothesis. Applying the difference-in-difference method to district level data, we find that the highways increased both local income and particulate matter air pollution. The estimated increase in air pollution is robust to using an instrumental variables approach, while that in income is not. Examining heterogeneity in these impacts, we find that the income–environment tradeoff was less steep in districts with initially higher educational attainment rates because they experienced a smaller increase in air pollution due to the highways. [ABSTRACT FROM AUTHOR]

Based on the current reality of unbalanced and inadequate regional economic development in China, this study constructs a comprehensive index system to asses China’s economic development quality across six dimensions: innovation dynamic, coordinated development, market governance, green transformation, open economy, and people’s welfare. It employs the vertical and horizontal scatter degree approach that better captures the inherent characteristics of data to dynamically measure China’s high-quality economic development index (HQEDI) and unveils its spatial interaction patterns through a modified dynamic Spatial Durbin Model. Findings indicate that China’s HQEDI demonstrates a persistent upward trend and an expanding cycle, with significant spatial agglomeration effects. The spatial correlation structure portrays an imbalanced distribution of HQEDI, with Shanghai and Beijing as the center, the eastern coast as the secondary center, the central and western regions occupying subordinate positions. Under various spatial weights, China’s HQEDI exhibits conditional β convergence and positive spillover effect. Convergence rates decreases in the order of “Central-West-Northeast-East,” with corresponding convergence cycles increasing in this order. [ABSTRACT FROM AUTHOR]