Search

ABSTRACT This paper examines the effects of international remittances on regional economic development using spatial data from an original household survey carried out in the Republic of Moldova. I analyze remittance flows with a model that estimates regional (urban and rural) budget shares of consumption and investment expenditure categories for rural and urban households. An important contribution of the paper is that it analyzes the effect of remittances in the regions where spending takes place, which is not necessarily the same as the region where the households originating this spending reside. Using the multinomial logit approach, I control for potential selectivity and endogeneity biases of remittances. The results show that remittances lead to significantly increasing marginal productive investments in urban regions at the expense of rural regions. The fundamental finding of the study is that remittances influence the flight of productive capital out of rural areas into urban regions (a pattern similar to the crowding-out effect of the Dutch Disease). The analysis carried out in this paper can be applied to other temporary income transfers and exogenous spending injected in the region that affect households' regional expenditure patterns. [ABSTRACT FROM AUTHOR]

Despite the importance of predicting investment expenditures for regional economic forecasting and policy simulation, little has been published on predicting regional investment expenditures. The primary reason is the lack of data on regional investment and capital stocks. Using two constructed investment data sets, this paper specifies and econometrically estimates stock adjustment equations of residential and nonresidential investment for the fifty states plus Washington, D.C. Unique aspects of the approach include maximum use of United States and regional data, and pooled estimation. The estimated pooled equations provide satisfactory historical fits to investment for most states. Also, the paper presents out-of-sample forecasts and simulated investment responses to an exogenous production increase. [ABSTRACT FROM AUTHOR]

This paper evaluates the economic impact of the $14 billion preparatory infrastructure investments for the 2010 FIFA World Cup in South Africa. We use satellite data on night light luminosity at municipality and electoral district level as a proxy for economic activity, applying synthetic control methods for estimation. For the average World Cup municipality, we find significantly positive, short‐run effects before the tournament, corresponding to a reduction of unemployment by 1.3 percentage points. At the electoral district level, we reveal distinct effect heterogeneity, where especially investments in transport infrastructure are shown to have long‐lasting, positive effects, particularly in rural areas. [ABSTRACT FROM AUTHOR]

The role of amenities in the flow of migrants has long been a subject of debate. This paper advances an original model of amenities that work through household production instead of directly through utility. Area characteristics (amenities) affect household production, causing certain kinds of human capital investments to be rewarded more than others. Area heterogeneity thus makes such investments location-specific. This specificity—along with a period of exogenous location—increases the opportunity costs of moving, diminishes migration flows between dissimilar locations and increases valuation of amenities that were present in the originating area. These theoretical results emphasize people's sorting across areas and thus differ from the results of the standard model of compensating differentials. Empirical tests of the model's predictions using NLSY79 data show that childhood investments affect migration flows in the way proposed by the model. [ABSTRACT FROM AUTHOR]

This paper tests for spatial spillover effects of state-level telecommunications infrastructure investment on state output, using panel data for 48 U.S. states from 1970 through 1997. As information and communication technologies support more industrial locational freedom, states may use telecommunications infrastructure investment as a competitive tool for attracting factors of production. In a production-function framework, this effect would manifest itself as a negative output spillover effect from telecommunications infrastructure investment. Findings indicate that a state benefits from its own telecommunications infrastructure, but telecommunications investment by other states has a negative impact on its output growth path, and proximity amplifies this negative spillover effect. [ABSTRACT FROM AUTHOR]

Research in regional and labor economics has established that economic incentives play a significant role in the process of internal migration. The most common approach is to view migration as a form of human capital investment undertaken by individuals who expect to benefit from the standpoint of increased earnings. One of the central concepts in these models is self-selection. Individuals who self-select the option of migration tend to differ from the nonmigrant population in ways that are not measured in most data sets. The contribution of this paper is in its distinction between two aspects of migrant selection. On one hand, some workers possess unmeasured traits that might simultaneously affect their wages and their propensity to engage in risky human capital investment such as migration. On the other hand, measured earnings might exert a direct effect on migration. Based on samples of employed Swedish males and females at two points in time, this study seeks first to examine whether migration between the two periods occurs in the presence of correlation between unmeasured factors present in both earnings during the first period and the subsequent decision to migrate. Second, it looks for an explicit role of earnings per se in the migration decision. Results of the study provide support for selection based on unmeasured traits for both genders. For females, there is also evidence of selection based on measured earnings. [ABSTRACT FROM AUTHOR]

There is an increasing awareness of the potentials of nonlinear modeling in regional science. This can be explained partly by the recognition of the limitations of conventional equilibrium models in complex situations, and also by the easy availability and accessibility of sophisticated computational techniques. Among the class of nonlinear models, dynamic variants based on, for example, chaos theory stand out as an interesting approach. However, the operational significance of such approaches is still rather limited and a rigorous statistical-econometric treatment of nonlinear dynamic modeling experiments is lacking. Against this background this paper is concerned with a methodological and empirical analysis of a general misspecification test for spatial regression models that is expected to have power against nonlinearity, spatial dependence, and heteroskedasticity. The paper seeks to break new research ground by linking the classical diagnostic tools developed in spatial econometrics to a misspecification test derived directly from chaos theory-the BDS test, developed by Brock, Dechert, and Scheinkman (1987). A spatial variant of the BDS test is introduced and applied in the context of two examples of spatial process models, one of which is concerned with the spatial distribution of regional investments in The Netherlands, the other with spatial crime patterns in Columbus, Ohio. [ABSTRACT FROM AUTHOR]

ABSTRACT This study investigates the impact of expressway investment in China's counties. By identifying expressway accessibility through toll station locations, we estimate the manufacturing distribution along expressways for 2001-2005. We find that expressway accessibility promotes manufacturing employment for inland counties by around 41 percent; however, for coastal counties that already have high road density and dense manufacturing layouts, the returns from new expressways are small. Furthermore, counties close to large cities benefit more from expressway accessibility than do counties that are far from them. The gap first increases in the period of expressway construction and then decreases as expressway effects are smoothed. [ABSTRACT FROM AUTHOR]

ABSTRACT Contrary to the predictions of the basic spatial equilibrium model, the long-run distribution of population across rural U.S. counties with high-valued natural amenities has become relatively more concentrated versus dispersed. We provide an explanation by developing a two-region model with mobile labor, production externalities and endogenous natural amenities. We find that strong preferences for natural amenities generally foster population dispersion. However, such preferences can also lead to population concentration when ecological degradation is low and man-made capital is a relatively scarce input into natural amenity production. Investments that enhance natural amenities are found to reduce the divergence between the steady state and optimal outcomes. [ABSTRACT FROM AUTHOR]

ABSTRACT We provide a Bayesian spatial Markov Chain Monte Carlo model composition ( MC3) analysis of growth rates in European regional patenting activity. Based on theoretical models on innovation and growth, we identify a large set of candidate explanatory variables that characterize regional stocks of knowledge, including: human resources devoted to innovative activity, scientific and technical capabilities, public and private investments, government policies, as well as regional industry structure, and indicators of regional technology gaps that reflect distance from the technological frontier. Our analysis shows that accommodating spatial dependence and heterogeneity leads to different conclusions regarding factors important for technological transfer and knowledge spillovers. [ABSTRACT FROM AUTHOR]

The traditional law of leases imposed no duty on landlords to mitigate damages in the event of tenant breach, whereas the modern law of leases does. An economic model of leases, in which absentee tenants may or may not intend to breach, shows that the traditional rule promotes tenant investment in the property by discouraging landlord entry. In contrast, the modern rule prevents the property from being left idle by encouraging landlords to enter and re-let abandoned property. The model reflects the historic use of the traditional rule for agricultural leases, where absentee use was valuable, and the emergence of the modern rule for residential leases, where the primary use entails continuous occupation. [ABSTRACT FROM AUTHOR]

Foreign direct investment (FDI) is seen as a way to import technology and catch up with economic leaders. It is therefore important to understand why some countries attract more investments by multinationals than others. We expand the set of common determinants of FDI with urban agglomerations and ask the question whether the accessibility of market potential and the number of potential investment locations, in the shape of urban concentrations, matters, since the importance of urban agglomeration economies for FDI has not been investigated before. We show that countries with several medium-sized cities attract more foreign investment, especially if they are close to main agglomerations, but too much concentration (primacy) reduces the inflow of FDI. Moreover, we unbundle spatially lagged FDI by including spatial lags of the determinants of FDI. It is important to disentangle such third-country effects in order to understand how FDI flows depend on the complex ways in which multinationals fragment sales and production across countries. Using a panel of U.S. affiliates’ sales in foreign countries between 1984 and 1998, we find evidence that cities are important drivers of FDI. Furthermore, third-country effects suggest that horizontal and complex forms of FDI coexist. [ABSTRACT FROM AUTHOR]

It has long been surmised that firms controlled by different countries may have unequal effects on the host economies in which they locate. By looking at the seven major source countries of foreign direct investment (FDI) in the United States, we provide empirical evidence that the state growth effects of FDI differ by source country. We attribute these differential growth effects to the relative differences in factor endowments between the source country and the state. The implication of this result is that technology transfer, believed to be the engine of economic growth, becomes more costly the more dissimilar the endowments. [ABSTRACT FROM AUTHOR]

Understanding the impact of road investments on deforestation is part of a complete evaluation of the expansion of infrastructure for development. We find evidence of spatial spillovers from roads in the Brazilian Amazon: deforestation rises in the census tracts that lack roads but are in the same county as and within 100 km of a tract with a new paved or unpaved road. At greater distances from the new roads the evidence is mixed, including negative coefficients of inconsistent significance between 100 and 300 km, and if anything, higher neighbor deforestation at distances over 300 km. [ABSTRACT FROM AUTHOR]

Individuals' human capital investments in their regions, industries, and occupations are measured as a function of the years they spend in their current region, industry, or occupation, and these investments are shown empirically to influence migration. There is an interesting life cycle pattern to migration: it falls rapidly with new investments, but then resurfaces as an opportunity to renew investments and increase the growth rate of income. Income regressions substantiate the life cycle path of income growth implied by the migration model. [ABSTRACT FROM AUTHOR]