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In this paper we study the distribution of power in the Basque Parliament since the restoration of the Spanish democracy. The classic simple games do not fit with the particular voting rule that it is used to invest the president of the regional government. In order to model this voting mechanism we incorporate coalitional externalities to the game. We use the extensions of the most popular power indices to games with externalities that have been proposed in the most recent literature. Moreover, we propose a method to estimate the probability of a given coalition based on the ideological positions of its members in a two-dimensional political spectrum. [ABSTRACT FROM AUTHOR]

This paper explores the age-dependent reliance on agglomeration externalities from a dynamic perspective by investigating the determinants of manufacturing establishments’ relocation decisions at the stages of the initial and the post-initial relocations. The relocation decisions are conceptually split into those on whether to relocate and where to relocate, specified by a nested-logistic model structure. The results indicate that manufacturing establishments’ preference to intra-industry agglomeration changes non-monotonically during their lifetime. While they prefer to stay in or move into municipalities characterized by the own-industry agglomeration in their initial relocation decision, they shun the intra-industry agglomeration in the stages of post-initial relocation. These findings suggest that to achieve the goal of industrial decentralization, policies to induce incumbent firms to relocate into rural areas could be more effective than those to attract start-up firms in peripheral area because they have lower dependence on agglomeration externalities. [ABSTRACT FROM AUTHOR]

This paper studies role of agglomeration externalities and market structure in determination of total factor productivity (TFP) of Ukrainian firms, having controlled for individual firm characteristics. We use micro-level data for manufacturing and service sectors in years 2005 and 2013. Our empirical results confirm the importance of various agglomeration externalities as well as competition in determination of TFP of Ukrainian firms. In addition, we find the statistically significant link between the total factor productivity, intangible assets, capital intensity, firm size, ownership status and firm internationalization (exports and imports). [ABSTRACT FROM AUTHOR]

This paper analyses region-level technical efficiency in nine European countries over the 1995-2007 period. We propose the application of a nonparametric conditional frontier approach to account for the presence of heterogeneous conditions in the form of geographical externalities. Such environmental factors are beyond the control of regional authorities, but may affect the production function. Therefore, they need to be considered in the frontier estimation. Specifically, a spatial autoregressive term is included as an external conditioning factor in a robust order- m model. Thus we can test the hypothesis of non-separability (the external factor impacts both the input-output space and the distribution of efficiencies), demonstrating the existence of significant global interregional spillovers into the production process. Our findings show that geographical externalities affect both the frontier level and the probability of being more or less efficient. Specifically, the results support the fact that the spatial lag variable has an inverted U-shaped non-linear impact on the performance of regions. This finding can be interpreted as a differential effect of interregional spillovers depending on the size of the neighboring economies: positive externalities for small values, possibly related to agglomeration economies, and negative externalities for high values, indicating the possibility of production congestion. Additionally, evidence of the existence of a strong geographic pattern of European regional efficiency is reported and the levels of technical efficiency are acknowledged to have converged during the period under analysis. [ABSTRACT FROM AUTHOR]

The shortage of studies on spatial spillovers of capital subsidy policies is rather surprising, considering that such policies are usually designed to generate spatial externalities. We propose a new framework that allows positive agglomeration effects to be contrasted with the negative cross-sectional substitution and the crowding-out effect. The global evaluation of the ATT and the spillover parameters shifts the spotlight from the policy effect on subsidised firms to the global effect of capital subsidy policies on the targeted territory. The empirical evaluation of a policy in Italy mainly directed towards small- and medium-sized firms shows that the impact on investments, turnover and employment is positive and large, but is negative on TFP. However, the employment growth is partially determined to the detriment of the untreated firms. [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]

This paper adopts multilevel analysis to study the agglomeration-performance nexus for domestic firms in sub-Saharan Africa. We show that contextual factors can explain up to 30 % of the variance in firms' productivity, more than half of which depends on the geographic location. Our results show also that African firms' productivity is positively correlated to the size of the agglomeration when they locate in larger cities specialized in different sectors, while the relation turns negative when they face direct competition from firms in the same industry. These effects are similar in the services and the manufacturing industries, even if in the latter positive spillovers are found to be conditional to the presence of backward and forward linkages with nearby firms. Finally, we are able to show that these effects are also confirmed when domestic firms locate close to foreign multinationals, especially those coming from the South. [ABSTRACT FROM AUTHOR]

This paper examines the links and interactions between the formal and informal employment growth as well as their determinants in 264 Tunisian delegations from 1996 to 2013. The empirical analysis based on non-spatial and spatial simultaneous equations models reveals that an increase in the informal employment growth in industry is positively associated with an increase in the formal employment at the same delegation, and vice versa. For the construction activities, the results show that the formal and informal sectors are opposite. With respect to agglomeration externalities, we find positive effects of local competition on employment growth for both formal and informal sectors. Furthermore, we find that formal employment is higher in delegations with higher average monthly wage and high levels of net migration. [ABSTRACT FROM AUTHOR]

Although the theoretical framework on agglomeration externalities and the channels through which they influence the regional economy appear well established, the empirical evidence on their magnitude and impact has been rather ambiguous and inconclusive. Applying the concepts of related and unrelated variety to an interregional European dataset and using spatial panel analysis, this paper provides critical information on the type and functioning of agglomeration externalities in relation to regional heterogeneity in knowledge intensity and innovation. We demonstrate that modeling this regional heterogeneity in a spatial panel setting is a crucial condition for identifying the positive agglomeration effects of (un)related variety on regional growth. The outcomes have substantial implications for European regional policy: We argue that policies should be both conceptually enriched and more empirically informed. [ABSTRACT FROM AUTHOR]

We examine potential heterogeneity in the capacity to benefit from knowledge spillovers in metropolitan areas between foreign-owned and domestic multinational enterprises, and between small and large firms. The study is restricted to R&D firms in the manufacturing sector and utilizes an unbalanced sample of 1073 Swedish firms covering a 16-year period with close to 11,000 observations. We apply linear and nonlinear approaches to test the importance of knowledge spillovers on labour productivity and patent applications. The overall result shows that not all R&D firms benefit from knowledge spillovers as a result of their presence in an agglomeration area. [ABSTRACT FROM AUTHOR]

The aim of the present work is to estimate an aggregate production function for the 20 Italian regions by emphasizing the role that agglomeration externalities (localization externalities and urbanization externalities) and spatial spillovers have in influencing the technical efficiency of the production process. To this purpose, we use the stochastic frontier approach. The results highlight the relevance and the positive impact that localization and urbanization externalities have in improving the efficiency level of the production process of Northern and Central Italy regions. Furthermore, spatial spillovers represent a source of development and growth both for Northern-Central regions and Southern regions. Finally, we show that the beta-convergence analysis of regional performance depends on the structural characteristics of each economy (Northern-Central Italy and Southern Italy), and these structural differences imply that Northern-Central and Southern macro-areas will have different steady states with regard to production performance. [ABSTRACT FROM AUTHOR]

In this paper, the productivity spillovers from efficient factories have been investigated using factory-level data of Japan's Census of Manufactures. The following three steps have been performed by estimating: first, efficiency of each factory using a nonparametric data envelopment analysis model for each industry, second, geographical distances to the most efficient factory in the prefecture and Japan overall are third, determinants of factories' performance. Results suggest that clustering occurs in each industry and efficient factories concentrate in certain regions. The share of efficient firms in total firms is particularly high in the Chubu and Tohoku regions. For many industries closeness to the most efficient factories plays a statistically significant positive role in the efficiency of manufacturing factories in Japan. However, this is not the case in high-tech industries. [ABSTRACT FROM AUTHOR]

This study analyzes the logic behind the development of environmental responsiveness in companies that are located in geographical clusters. Drawing on previous research, we contend that competitiveness and legitimation are important sources of variation in these companies' environmental responses. In particular, the companies' perceived rivalry, competition tracking capabilities, interaction with industry associations and network embeddedness influence their competitiveness and legitimation motivations for environmental responsiveness. We used structural equation modeling to test these hypotheses on a sample of 251-clustered agricultural firms in Spain. The results support the hypotheses and provide a number of insights about the underlying motivations behind going green in geographical clusters. [ABSTRACT FROM AUTHOR]

Precise characterization of informational trade barriers is neither well documented nor understood. Using Russian customs data, we document that regional destination-specific export spillovers exist for developing countries, extending a result that was only known for developed countries. This result suggests behavior responding to a destination barrier. To account for this fact, we build on a monopolistic competition model of trade by postulating an externality in the international transaction of goods. We test the model's prediction on region-level exports using Russian data and find improvement over gravity-type models without agglomeration. This finding has important development implications in that export policy that considers current trade partners may be more effective than policy that focuses only on the exporting country's industries. Furthermore, our findings can be considered in the burgeoning literature refining transaction costs beyond the traditional iceberg cost. [ABSTRACT FROM AUTHOR]

In economic agglomeration studies, the distinction of various externalities circumstances related to knowledge spillovers remains largely unclear. This paper introduces human capital, innovation and several types of entrepreneurship as potential drivers of regional economic performance with an impact of agglomeration economies. We use measures of specific types of entrepreneurship, discerned at the individual level, as well as human capital and invention through patenting activity for the period 2001-2006. The empirical application on 111 regions across 14 European countries investigates their relation with observed regional productivity rates in 2006. Our main findings indicate that (i) human capital, patenting activity and entrepreneurship are all linked to regional performance, more so in regions containing large as well as medium-sized cities; (ii) they act as complements rather than substitutes, facilitating productivity differently; and (iii) accounting for patenting activity and entrepreneurship captures agglomeration externalities effects previously subscribed only to the density of resources of regional performance. The particular role of regions with medium-sized cities next to regions with large cities complies with observed growth trends as well as recently proposed place-based development approaches that assume that interactions between institutions and geography are critical for regional economic performance. [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]

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]