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Cross-border mergers and acquisitions (M&As) have grown rapidly in recent years and are a major part of foreign direct investment (FDI). However, M&A distribution is highly skewed, with most of the activity concentrated in certain countries and even in certain cities. The fact that only a handful of cities account for most M&As raises a research question as to what city attributes attract foreign investment. Unlike many previous studies that have relied on a gravity model approach using the bilateral volume of FDI, this study examines the determinants of cross-border M&As by applying an FDI gravity model to inter-city investment flows. The results based on panel data of M&A flow across 44 major cities in the world from 2010 to 2017, reveal that the gravity model fits well for even the inter-city data, and show that besides the basic attributes used in conventional gravity models, such as market size and distance between origin city and destination city, and urban-specific attributes such as the agglomeration of the world's top-ranked firms and international accessibility are positively associated with cross-border inward M&As. [ABSTRACT FROM AUTHOR]

Formal models of appearance and reality have proved fruitful for investigating structural properties of perceptual knowledge. This paper applies the same approach to epistemic justification. Our central goal is to give a simple account of The Preface, in which justified belief fails to agglomerate. Following recent work by a number of authors, we understand knowledge in terms of normality. An agent knows p iff p is true throughout all relevant normal worlds. To model The Preface, we appeal to the normality of error. Sometimes, it is more normal for reality and appearance to diverge than to match. We show that this simple idea has dramatic consequences for the theory of knowledge and justification. Among other things, we argue that a proper treatment of The Preface requires a departure from the internalist idea that epistemic justification supervenes on the appearances and the widespread idea that one knows most when free from error. [ABSTRACT FROM AUTHOR]

Productivity is largely estimated ignoring the potential impact of spillovers and common shocks in the literature, and therefore, the estimates may be subject to the omitted variable bias and internal inconsistency. In this paper, we estimate a nonparametric production function, in which technology spillovers and common shocks have persistent effects on productivity and are controlled for through spatial networks and a factor structure in the productivity evolution process. We synthesize the proxy variable method to structurally identifying the production functions using the semiparametric common correlated effect estimator. The proposed model is then applied to the Chinese computer and peripheral equipment firms. We find that the annual productivity growth rate in this high-technology sector is about 15%. While firms are cross-sectionally dependent via both spatial and non-spatial connections, the productivity growth is largely explained by firms' own effort, and mildly explained by the neighbors' activities. Productivity is found to be higher in the areas of agglomeration, and the common shock effects on productivity are not necessarily correlated with the spatial variables. [ABSTRACT FROM AUTHOR]

This study was aimed at the development of a better understanding of the agglomeration behavior of sulfated cellulose nanocrystals (CNCs) in the presence of sulfates with monovalent (NH4+, K+, Na+) and divalent (Ca2+) cations, and to demonstrate their potential in simple and efficient product separation. Protonated CNCs were counterion-exchanged and their ionic strength was increased by adding sulfates of the respective cation to trigger agglomeration. The critical concentrations of agglomeration (CAC) and peptization (CPC) were determined. We found that the agglomeration behavior of CNCs could be attributed to matching affinities between the cations and the sulfate half-ester groups on the CNC surfaces. Based on these findings, a facile and efficient downstream process was designed to separate CNCs from neutralized reactant solutions using CAC and CPC. This method provides colloidally stable CNCs at high yield provided by centrifugation. When salt concentrations in the product are maintained below the CAC, as prepared CNCs from neutralized reactant solutions might be used in hydrogels and emulsions. [ABSTRACT FROM AUTHOR]

In this article, the effectiveness of policy creating science parks is evaluated with respect to small- and medium-sized enterprises (SMEs). Science parks created to support innovation and regional growth often target productivity gains through agglomeration economies. However, spatial proximity of firms may also stimulate selection, less competitive firms being forced to exit, a cluster of high-productivity, surviving firms being observed at the regional level. Empirical studies also show that high- or low-productivity firms or both may spatially sort into a region. Using estimates of firm-level total factor productivity, the science park sorting and selection behavior of Taiwanese and South Korean SMEs is analyzed. The results indicate heterogeneity in location choice of SMEs arising from the economic environment of science parks. Overall, the empirical evidence suggests that science parks can generate real productivity improvements if the incentives are reinforced through national-level policies; otherwise, such incentives may end up protecting inefficient firms. [ABSTRACT FROM AUTHOR]

This study attempts to fill the literature gap regarding sustainable entrepreneurship viewed through geographical clustering lenses by examining how institutional factors such as local entrepreneurship and innovation climates, knowledge networks, policies, resource availability, and awareness affect entrepreneurial firm formation in the USA. Drawing from various theoretical views within the interdisciplinary literature on the topic, we develop cross-cluster hypotheses regarding firm formation and geographic clustering of clean-technology companies. We test them using a negative binomial random effects model in a panel sample of US clean-technology startup firms and find general support. [ABSTRACT FROM AUTHOR]

In recent decades, knowledge spillovers have taken the helm as the driving force of growth in cities. The ease of communicating ideas and the sheer density of large urban areas have made this a plausible explanation for continued growth of employment and population in cities. However, there is little consensus on the nature of the optimal conditions for stimulating knowledge spillovers. This paper identifies these optimal conditions by exploring the relative importance of industry specialization, diversity and competition across all industries and all metropolitan areas from 1970 to 2011 in the U.S. Long-term employment growth in cities is found to be driven by industry diversity combined with a high level of competition. This combination fosters the greatest amount of cross-industry fertilization of ideas and knowledge spillovers. [ABSTRACT FROM AUTHOR]

The present paper explores the role of the social structure of suburban areas on city dynamics. We focus on relative concerns in the form of conspicuous consumption and introduce them into a standard economic geography model a la Krugman. We show that the level of social integration within the suburban areas of cities and the level of economic integration across cities are crucial in determining the city sizes. An interesting case arises with moderate trade costs when relatively small shares of income are devoted to the consumption of the differentiated good: if classes of workers are segregated (as in homogenous suburban areas), relative concerns tend to generate dispersed, medium-size cities; when workers of different classes socially interact, relative concerns contribute to foster socially integrated megalopolises. This result shows that keeping-up-with-the-Joneses motives may generate counterintuitive results when agents are able to choose their location. [ABSTRACT FROM AUTHOR]

The accumulation of knowledge, human capital and agglomeration are indicated as prominent sources of externalities. Therefore, this study examines their contributions to the economic growth of regions in Europe, while accounting for non-linear and threshold effects as well as spatial dependence. The results highlight differentiated growth patterns for less and more developed regions with the effect of knowledge being considerable only in the latter group. The findings suggest that there is the potential for innovation and agglomeration in many less developed regions located in both the new member states (NMS) and the old member states (OMS). However, to reach sustained growth, structural change is necessary in these regions. We conclude that the existing gaps in the economic structure are deemed responsible for the persistence of income disparities. This reinforces the call for specific policy actions in catching-up regions, thus strengthening the arguments in favour of a place-based approach to regional policy. [ABSTRACT FROM AUTHOR]

Regional economic development has become a key topic of discussion among academics and policymakers. However, a key driver of economic activity is often overlooked. This study examines the importance of hospitals as regional exporters. A county-pair fixed effect spatial interaction model is developed to examine the determinants of the a region's ability to export hospital services. Results indicate agglomeration plays a large role in determining the flow of hospital patients between South Carolina counties. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of fiscal equalization on asymmetric tax competition when positive agglomeration externalities are present. It uses a model focusing on the strategic reason for capital taxes to demonstrate that per capita fiscal capacity equalization improves the spatial allocation of capital provided a sufficiently rich (marginally) larger region and sufficiently strong agglomeration externalities. If tax revenue is used to finance public goods, per capita fiscal capacity equalization generally cannot simultaneously eliminate public good inefficiency and spatial inefficiency. However, the achievement of full efficiency for ex ante identical regions requires excessive (full) equalization in the presence (absence) of agglomeration externalities. [ABSTRACT FROM AUTHOR]

This study investigated the determinants of business creation as a measure of entrepreneurship in European cities. It examined supply- and demand-side elements, actual and equilibrium rates of entrepreneurship, institutions and culture. These components were characterized using a dataset consisting of 21 indicators drawn from 184 cities in 20 European countries during the years 1999-2010. The study found that city size, self-employment, and tertiary education have a significant and positive impact on the number of new businesses registered. The implications of these findings are discussed in view of the European Commission's Small Business Act, which provides guidelines for the conception and implementation of entrepreneurship policies in the European Union. This paper's main contribution lies in the differentiation of factors that are context-specific (e.g., city-size) and others that can be influenced by policy (e.g., tertiary education). [ABSTRACT FROM AUTHOR]

This paper studies whether agglomeration benefits a clustering region through increased labor productivity by uniquely analyzing agglomeration effects in ecology oriented industries in Kitakyushu, Japan. Our empirical model further extends previous work by introducing a time dimension into the analysis. This enables us to incorporate technological progress and isolate the impact of interest rates on productivity. The past literature has not isolated these effects. Since our model explores whether higher productivity results from increased density over time, it provides policy implications, such as on the effects of labor immigrants and on aging communities. [ABSTRACT FROM AUTHOR]

Where firms cluster together, there are efficiency gains from outsourcing, labour pooling and knowledge spillovers. Earlier research into agglomeration in South Africa focussed on sub-national regions and found that capital stock, human capital, access to markets and exports are significant determinants of output growth. This paper examines whether location explains differences in efficiency at firm level. Data from the 2003 and 2007 World Bank Enterprise Surveys allow one to examine firms in the four major South African cities. This paper reports estimates of a firm-level production function that incorporates location-specific explanatory variables to examine the scope of agglomeration economies. The place-specific size of the home market, level of education and share of exports are found to be positively related to output per worker at firm level. A description of the survey data identifies possible indicators of the sources of agglomeration economies. The size and significance of the inland Gauteng Province's economy is reflected in its firms' use of intermediate inputs and skilled labour. [ABSTRACT FROM AUTHOR]

This paper examines the geographic determinants of firm bankruptcy. We employ hazard rate models to study the bankruptcy risk of a firm, allowing for time-varying covariates. Based on a large sample from all geographic areas and the major sectors of the Swiss economy, we find the following main results: (1) Bankruptcy rates tend to be lower in the central municipalities of agglomerations; (2) bankruptcy rates are lower in regions with favorable business conditions (where corporate taxes and unemployment are low and public investment is high); (3) private taxes and public spending at the local level have little impact on bankruptcy rates. [ABSTRACT FROM AUTHOR]

Regional policies that seek to reduce economic inequalities between regions are common. These policies normally involve subsidies or transfers to the poorest regions. Over any given short-term horizon such subsidies serve to reduce inter-regional inequalities, but as they also affect migration patterns the long-term effects are less clear. This paper demonstrates using a three-region general equilibrium model that subsidising the poorest region may be to the detriment of the periphery as a whole and even to the very region that receives the subsidy, if the subsidy draws firms away from a nearby region that would function better as a production centre. If the subsidy does not attract a sufficient number of firms to the subsidised region, then the long-term effect on the residents of that region would be negative. Though further research is needed to isolate the conditions under which such an effect would arise, this result has potentially important implications for the design of regional policy. [ABSTRACT FROM AUTHOR]

This paper investigates the impact of the shape of transport costs on the structure of spatial equilibria. We consider a racetrack economic model in which firms and workers freely locate on the continuous space of a circumference. We present “reasonably” weak conditions on the shape of transport costs under which continuous distributions of firms and workers are never stable equilibria. We also characterize conditions on the shape of transport costs under which discrete distributions are stable equilibria. The results confirm the idea that agglomeration of firms and workers in few cities is a natural outcome of economic interactions. [ABSTRACT FROM AUTHOR]

In this paper we aim at identifying stylized facts in order to suggest adequate models for the co-agglomeration of industries in space. We describe a class of spatial statistical methods for the empirical analysis of spatial clusters. The main innovation of the paper consists in considering clustering for bivariate (rather than univariate) distributions. This allows uncovering co-agglomeration and repulsion phenomena between the different sectors. Furthermore we present empirical evidence on the pair-wise intra-sectoral spatial distribution of patents in Italy in 1990s. We identify some distinctive joint patterns of location between different sectors and we propose some possible economic interpretations. [ABSTRACT FROM AUTHOR]

The New Economic Geography, as expounded by Krugman and others, highlights the importance of greater extent of agglomeration as incomes grow in the world economy. In this paper we suggest an alternative framework in which, as incomes grow, greater degrees of economic fragmentation and dis-agglomeration are encouraged. In both approaches increasing returns to scale are crucial, but in ours these are found in service sectors that allow separate production blocks to be coordinated instead of being found within separate production blocks. [ABSTRACT FROM AUTHOR]