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Spatial Externalities and Empirical Analysis: The case of Italy

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Author Info
Giuseppe De Arcangelis () (Dipartimento di Scienze Economiche, Universit`a degli Studi di Bari and CIDEI.)
Giordano Mion () (Dipartimento di Scienze Economiche, Universit`a degli Studi di Bari, and CORE and CERAS.)

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Abstract

In the last ten years the space issue, i.e. the study of the role played by space in economic phenomena, has attracted a lot of interest from many economic fields. Both the suitability of spatial economics to address questions posed by globalization, and improves in modeling techniques are at the basis of this revolution. The combination of increasing returns, market imperfections, and trade costs creates new forces that, together with factor endowments, determine the distribution of economic activities. These spatial externalities makes agents' location choice highly interdependent, thus allowing to understand the empirical spatial correlation between demand and production previously observed by the market potential literature. Despite their theoretical relevance, there is still little evidence, especially at large scale level, on the effective contribution of this new identified forces to agents' location decisions. The aim of this work is to directly estimate a model of economic geography on some Italian regional data in order to both test the empirical relevance of this theory and try to give a measure of the geographic extent of spatial externalities.

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Paper provided by Dipartimento di Scienze Economiche - Università di Bari in its series series with number 0006.

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Keywords: Economic Geography Spatial Externalities Market Potential

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
R32 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Other Production and Pricing Analysis

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Paul Courtney & Denis Lépicier & Bertrand Schmitt, 2005. "Rural firms, farms and the local economy - a focus on small and medium-sized towns," ERSA conference papers ersa05p128, European Regional Science Association. [Downloadable!]
  2. Candau, Fabien, 2006. "The Spatial and Public Economics of Regions, a Theoretical and Empirical Survey," MPRA Paper 1153, University Library of Munich, Germany. [Downloadable!]
  3. Maarten Bosker & Harry Garretsen, 2007. "Trade Costs, Market Access and Economic Geography: Why the Empirical Specification of Trade Costs Matters," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
  4. Mion, Giordano & Naticchioni, Paolo, 2007. "The spatial sorting and matching of skills and firms," MPRA Paper 1721, University Library of Munich, Germany. [Downloadable!]
  5. Head, Charles Keith & Mayer, Thierry, 2005. "Regional Wage and Employment Responses to Market Potential in the EU," CEPR Discussion Papers 4908, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Thijs Knaap, 2005. "Trade, Location, and Wages in the United States," Working Papers 05-30, Utrecht School of Economics. [Downloadable!]
    Other versions:
  7. Pedro Vasconcelos Amaral & Mauro Borges Lemos & Rodrigo Ferreira Simões & Flávia Chein Feres, 2007. "Regional imbalances and market potential in Brazil," Textos para Discussão Cedeplar-UFMG td324, Cedeplar, Universidade Federal de Minas Gerais. [Downloadable!]
  8. Annekatrin Niebuhr, 2005. "The Impact of EU Enlargement on European Border Regions," ERSA conference papers ersa05p114, European Regional Science Association. [Downloadable!]
  9. Dominique Peeters & Isabelle Thomas, 2005. "Does the Shape of a Territory Influence the Locations of Human Activities? a Numerical Geography Approach," ERSA conference papers ersa05p56, European Regional Science Association. [Downloadable!]
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