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The Analysis of Location, Co-location and Urbanisation Economics

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Author Info

  • Johansson, Börje

    ()
    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Forslund, Ulla

    ()
    (JIBS, Jönköping International Business School)

Abstract

Using the taxonomy by Anselin (2003), this paper investigates how the inclusion of spatially discounted variables on the ‘right-hand-side’ (RHS) in empirical spatial models affects the extent of spatial autocorrelation. The basic proposition is that the inclusion of inputs external to the spatial observation in question as a separate variable reveals spatial dependence via the parameter estimate. One of the advantages of this method is that it allows for a direct interpretation. The paper also tests to what extent significance of the estimated parameters of the spatially discounted explanatory variables can be interpreted as evidence of spatial dependence. Additionally, the paper advocates the use of the accessibility concept for spatial weights. Accessibility is related to spatial interaction theory and can be motivated theoretically by adhering to the preference structure in random choice theory. Monte Carlo Simulations show that the coefficient estimates of the accessibility variables are significantly different from zero in the case of modelled effects. The rejection frequency of the three typical tests (Moran’s I, LM-lag and LM-err) is significantly reduced when these additional variables are included in the model. When the coefficient estimates of the accessibility variables are statistically significant, it suggests that problems of spatial autocorrelation are significantly reduced. Significance of the accessibility variables can be interpreted as spatial dependence

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Bibliographic Info

Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 46.

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Length: 28 pages
Date of creation: 28 Dec 2005
Date of revision:
Handle: RePEc:hhs:cesisp:0046

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Keywords: accessibility; spatial dependence; spatial econometrics; Monte Carlo Simulations; spatial spillovers;

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References

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  1. Philip McCann & Daniel Shefer, 2003. "Location, agglomeration and infrastructure," Economics of Governance, Springer, vol. 83(1), pages 177-196, October.
  2. Starrett, David, 1978. "Market allocations of location choice in a model with free mobility," Journal of Economic Theory, Elsevier, vol. 17(1), pages 21-37, February.
  3. Börje Johansson & John Quigley, 2003. "Agglomeration and networks in spatial economies," Papers in Regional Science, Springer, vol. 83(1), pages 165-176, October.
  4. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1992. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," NBER Working Papers 3993, National Bureau of Economic Research, Inc.
  5. Henderson, J V, 1974. "The Sizes and Types of Cities," American Economic Review, American Economic Association, vol. 64(4), pages 640-56, September.
  6. James D. Adams, 2001. "Comparative Localization of Academic and Industrial Spillovers," NBER Working Papers 8292, National Bureau of Economic Research, Inc.
  7. Takayama, T, 1994. "Thirty Years with Spatial and Intertemporal Economics," The Annals of Regional Science, Springer, vol. 28(3), pages 305-22, September.
  8. Barbara J. Spencer & James A. Brander, 1982. "Tariff Protection and Imperfect Competition," Working Papers 517, Queen's University, Department of Economics.
  9. Andersson, Martin & Karlsson, Charlie, 2005. "Knowledge Accessibility and Regional Economic Growth," Working Paper Series in Economics and Institutions of Innovation 40, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  10. Weibull, Jorgen W., 1976. "An axiomatic approach to the measurement of accessibility," Regional Science and Urban Economics, Elsevier, vol. 6(4), pages 357-379, December.
  11. Acs, Zoltan J & Audretsch, David B & Feldman, Maryann P, 1992. "Real Effects of Academic Research: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 363-67, March.
  12. Roberta Capello, 2002. "Entrepreneurship and spatial externalities: Theory and measurement," The Annals of Regional Science, Springer, vol. 36(3), pages 387-402.
  13. Audretsch, David B & Feldman, Maryann P, 1995. "Innovative Clusters and the Industry Life Cycle," CEPR Discussion Papers 1161, C.E.P.R. Discussion Papers.
  14. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
  15. Andersson, Martin & Karlsson, Charlie, 2004. "The Role of Accessibility for the Performance of Regional Innovation Systems," Working Paper Series in Economics and Institutions of Innovation 9, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
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Cited by:
  1. Liargovas, Panagiotis & Daskalopoulou, Irene, 2011. "Capital allocation in the Greek regions," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 866-888.
  2. Klaesson, Johan & Johansson, Börje, 2008. "Agglomeration Dynamics of Business Services," Working Paper Series in Economics and Institutions of Innovation 153, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  3. Hans Lööf, 2011. "R&D-Persistency, Metropolitan Externalities and Productivity," ERSA conference papers ersa11p1396, European Regional Science Association.

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