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1 – 10 of over 15000Tay T. R. Koo and Andreas Papatheodorou
Airports and urban developments in their vicinity constitute a highly specialized type of agglomeration based on air connectivity that epitomizes the importance of mobility in the…
Abstract
Airports and urban developments in their vicinity constitute a highly specialized type of agglomeration based on air connectivity that epitomizes the importance of mobility in the modern service economy. However, in a frictionless world of backyard capitalism and perfect competition, such agglomeration of civil aviation services would not have been necessary. Thus, concepts such as imperfect markets, path dependence, and cumulative causation may be alternatively used to explain the spatial aspects of airport developments. Focusing on “second-nature” concentration, the “new geographical economics” (NGE) literature offers a potential theoretical framework that organizes these concepts into a coherent economic framework. This chapter aims to highlight the unique relevance of the NGE approach in developing an economics-based understanding of the spatial distribution of airports. Drawing from the existing NGE knowledge-base, this conceptual chapter explains that the NGE approach can be adopted as a micro-foundation to show how the spatial aspects of airport development, including core-periphery dynamics of regional disparity and parity, can emerge from economic mechanisms. The chapter concludes with potential implications for airport economics and regional policy, along with the discussion of some of the main critiques of the theory.
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Peipei Liu and Wei-Qiang Huang
This study is the first that aims to investigate international transmission channels of sovereign risk among G20 and explore its influential factors by applying the…
Abstract
Purpose
This study is the first that aims to investigate international transmission channels of sovereign risk among G20 and explore its influential factors by applying the multidimensional SAR model.
Design/methodology/approach
Multiple spatial weight matrices can capture the contiguity of spatial units from various dimensions, which could be exploited to improve the precision of inference as well as prediction accuracy. To the best of the authors’ knowledge, this is the first study to investigate international transmission channels of sovereign risk among G20 and explore its influential factors by applying the multidimensional SAR model.
Findings
With network structure analysis, this study finds that they contain different information content from the perspective of graphical display, node strength and correlation. Developed and emerging countries all play major roles in trade connection, while only developed countries play major roles in financial linkage. Second, by applying the multidimensional SAR model, only the spatial autocorrelation coefficients for trade and financial linkages are significant during the full sample period, which is in sharp contrast to published studies using the SAR model with a single matrix. Third, the spillover channels that play major roles in various periods are different. Only trade channel plays a role during crisis periods and it is the most important. Fourth, the spatial correlation among countries greatly amplifies the shock’s impacts on one market. And spatial effect for developed countries is larger than those for emerging countries, while the mean spatial effect of a unit shock in the USA on emerging countries is slightly greater than that on developed countries.
Originality/value
Multiple spatial weight matrices can capture the contiguity of spatial units from various dimensions, which could be exploited to improve the precision of inference as well as prediction accuracy. To the best of the authors’ knowledge, this is the first study to investigate international transmission channels of sovereign risk among G20 and explore its influential factors by applying the multidimensional SAR model.
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“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise…
Abstract
“It should also be noted that the objective of convergence and equal distribution, including across under-performing areas, can hinder efforts to generate growth. Contrariwise, the objective of competitiveness can exacerbate regional and social inequalities, by targeting efforts on zones of excellence where projects achieve greater returns (dynamic major cities, higher levels of general education, the most advanced projects, infrastructures with the heaviest traffic, and so on). If cohesion policy and the Lisbon Strategy come into conflict, it must be borne in mind that the former, for the moment, is founded on a rather more solid legal foundation than the latter” European Commission (2005, p. 9)Adaptation of Cohesion Policy to the Enlarged Europe and the Lisbon and Gothenburg Objectives.
Recently published studies stress the importance of trade in intermediate goods. The literature on determinants of trade, however, have largely focused on the sources of…
Abstract
Purpose
Recently published studies stress the importance of trade in intermediate goods. The literature on determinants of trade, however, have largely focused on the sources of comparative advantage in determining aggregate trade flows rather than trade in intermediate goods. The purpose of this paper is to examine the role of institutional quality and trade costs to explain the determinants of trade in intermediates.
Design/methodology/approach
The simple model is based on the model of comparative advantage in the gravity framework used by Eaton and Kortum (2002) and Chor (2010) to relate trade flows of intermediate goods to institutional parameters, factor endowments and geography. The empirical tests use a data set containing 172 countries and 17 industries spanning ten years.
Findings
The results confirm the theoretical prediction that a country with higher institutional quality has a comparative advantage in institution-intensive goods and trade costs have a negative effect on trade. The author further finds that these effects are stronger in share of trade in intermediate goods vis-à-vis final goods.
Originality/value
To highlight the distinct nature of trade in intermediate goods, the author separates industry trade flows as intermediate input trade and final goods (consumption goods) trade to compare the importance of different sources of comparative advantage among different types of trade flows. Unlike Eaton and Kortum (2002) and Chor (2010) who used cross-sectional data for final goods trade, the ten-year industry-level panel data are used to compare the relative importance of institutions and geography as determinants in trade in intermediate goods compared to final goods trade and capture the macroeconomic time variant factors as well as industry–country pair characteristics. A significant caveat in gravity regression is that an empirical finding may often be driven by omitted variables. Inclusion of a set of country variables such as GDP, production costs and institutional level may still allow omitted variables to bias the estimation. To avoid this problem, the author includes a fixed effect of exporter and importer as well as industry and year, instead of a set of country characteristics.
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Mudrajad Kuncoro and Sari Wahyuni
This paper attempts to examine which theory is best at explaining the geographic concentration in Java, an island in which most of the Indonesia’s large and medium manufacturing…
Abstract
This paper attempts to examine which theory is best at explaining the geographic concentration in Java, an island in which most of the Indonesia’s large and medium manufacturing industries have located overwhelmingly. Our previous studies on Java have found that there was a stable – albeit increasing trend – and persistent geographic concentration in Java over the period 1976‐1995. Yet some critical questions exist: Why geographic concentration in Java persisted during this period? To what extent relevant theories and empirical literature can be used as an explicit test of competing theories on agglomeration forces? In answering those questions, we compare the three major grand theories of geographic concentration: Neo‐Classical Theory (NCT), New Trade Theory (NTT) and New Economic Geography (NEG). Using the regional specialization index as a measure of geographic concentration of manufacturing industry and pooling data over the period 1991‐002, our econometric analysis integrates the perspectives of industry, region (space) and time. We further explore the nature and dynamics of agglomeration forces underpinning the industrial agglomeration in Java by testing some key variables. Our econometric results rejected the NCT hypotheses and showed that the NTT and NEG can better explain the phenomena. It’s apparent that manufacturing firms in Java seek to locate in more populous and densely populated areas in order to enjoy both localization economies and urbanization economies, as shown by the significance of scale economies and income per capita. The former is associated with the size of a particular industry, while the latter reflects the size of a market in a particular urban area. More importantly, the results suggest that there is a synergy between thickness of market and agglomeration forces. The interplay of agglomeration economies is intensified by the imperfect competition of Java’s market structure. We find that Java’s market structure may restrict competition so that firms tend to concentrate geographically. Instead of providing some important recommendations for local and central governments and practical implications for investors and manufacturing firms, this paper gives empirical evidence with respect to path dependency hypothesis. The finding supports the NEG’s belief that history matters: older firms tend to enhance regional specialization.
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Simona Iammarino, Philip McCann and Raquel Ortega-Argilés
This paper aims to explain how thinking regarding multinationals, competitiveness and location in cities has evolved over the past five decades and how our current understanding…
Abstract
Purpose
This paper aims to explain how thinking regarding multinationals, competitiveness and location in cities has evolved over the past five decades and how our current understanding and thinking about future challenges is contingent on these previous shifts.
Design/methodology/approach
The design of the paper is a conceptual piece linking different theoretical strands.
Findings
Global cities are not always necessarily the key locations for future multinational investments. It depends on the activities taking place. Knowledge and technology and how they interact with the firm’s capabilities and objectives are crucial.
Research limitations/implications
The implications are that future multinational location choices will be driven by diversity, demography, protectionism, automation and industrial policy.
Originality/value
This paper provides a roadmap for scholars in the international business and competitiveness fields to understand the current and future challenges facing multinationals and their location behavior.
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John D. Mittelstaedt, William A. Ward and Edward Nowlin
To examine the effects of urbanization and industrial concentration on the propensity of firms to export, and to determine whether these aspects of geography affect smaller firms…
Abstract
Purpose
To examine the effects of urbanization and industrial concentration on the propensity of firms to export, and to determine whether these aspects of geography affect smaller firms differently than larger ones.
Design/methodology/approach
Based on expectations from economic geography and organizational learning theories, logistic regression was used to assess the effects of firm size, urbanization and industrial concentration on the export choices of 43,707 manufacturing firms located in the Southeastern USA.
Findings
Results indicate that geography affects choices to export, and that these choices differ with firm size. The smallest manufacturers (fewer than 20 employees) were most likely to export from urban areas and in concentrated industrial sectors. Industry‐specific differences were also found.
Research limitations/implications
Results from the Southeastern USA are consistent with findings from China, though caution should be used in generalizing from these findings. The findings suggest that both internal and external scale economies must be considered in order to understand the export success of small firms.
Practical implications
These findings suggest that factors external to the firm affect the learning and decision process of smaller firms in very different ways than larger firms. Small firms are more dependent on their geographic environments than larger firms, when engaging the global economy.
Originality/value
This is the first paper to examine the simultaneous effects of internal and external scale economies on the propensity of firms (and particularly small firms) to engage in export activities.
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This paper draws attention to President Trump’s isolationist policies and aims to show that it is reminiscent of the era of the Smoot–Hawley Tariff of the 1930s. This paper posits…
Abstract
Purpose
This paper draws attention to President Trump’s isolationist policies and aims to show that it is reminiscent of the era of the Smoot–Hawley Tariff of the 1930s. This paper posits that the isolationism coupled with the Trump government’s brash and uneasy relationship with other governments of the world will only harm the US economy because history has shown that isolationism does not work.
Design/methodology/approach
This paper briefly discusses the relationship between conflict and international trade and whether trade and economic interdependence are tools that are relevant in preventing the initiation, escalation and settlement of conflicts. It also draws a comparison between President Trump’s increasingly isolationist policies and the political climate of the USA in the 1930s, with particular reference to the Tariff Act of 1930. This paper finally explores the present tensions with other countries and likely consequences for America.
Findings
A direct relationship exists between conflict and trade because the presence of good trade relationships does not take away from but only helps to maintain peace and friendly relationships among nations. Furthermore, Trump’s isolationist policies are certainly going to harm the USA in the long run and a big part of that is because of the personality of the President himself.
Originality/value
This paper is an original work of the author and it strives to remind us of a similar past in US history, and warn of the dangers of the present course of the Trump administration.
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New economic geography theorists, who have revived the importance of local roots and highlighted the significance of cities as a source of international competitiveness, have…
Abstract
New economic geography theorists, who have revived the importance of local roots and highlighted the significance of cities as a source of international competitiveness, have spurred the global marketing of Incheon. An examination of the new economic geography literature examines the nature of the new localism based on clusters, involving spatial proximity and concentrated face-to-face transaction, agglomeration economies and local knowledge networks. The territorial expression of these ideas is evident in competitive cities and knowledge cities. Both types of cities are embodied in civic attempts to market Incheon as an international city through the development of the international harbor and international airport and a knowledge city at Songdo. As there is no reference to Incheon in the place marketing literature there is a need to market it as Seoul-Incheon and itemize the Capital Region 's key assets and strategic advantages, including logistics and Pentaport - five ports in one - to build a presentation that attracts foreign direct investment and foreign expertise and provokes an energizing debate on the Korean Government's plan to position the country as the hub for international commerce in Northeast Asia. Critics of this place marketing approach designed to make Incheo'} a prosperously middle-class city suggest more evidence is needed before it can be assumed firms locate in cities as a base for export activities to boost their competitiveness. Perhaps there is need to give up the preoccupation with the local focus in cluster analysis and give equal attention to global connections.
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