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Explaining the Location of Economic Activity. Is there a Spatial Employment Structure in Belgium?

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Author Info

  • De Bruyne, Karolien

    ()
    (Hogeschool-Universiteit Brussel (HUB), Belgium)

Abstract

This paper focuses on the importance of market access for firms location decisions. I estimate a structural parameters equation, a spatial wage and a spatial employment equation for Belgium, in line with the work of Hanson (1998, 2005) for the US, Mion (2004) for Italy, Garcia Pires (2005) and Paluzie et al (2009) for Spain and Brakman, Garretsen and Schramm (2002, 2004) and Roos (2001) for Germany. The findings suggest that linkages between firms and consumers are important for location decisions, as predicted by the New Economic Geography developed by (Krugman (1991)). However, conducting an Analysis of Variance on the estimation results, I conclude that firm-consumer linkages remain complementary with respect to other location theories. The last contribution of the paper is the estimation of spatial employment equations at regional and sectoral level. Firm-consumer linkages appear more important for the Northern than for the Southern part of Belgium while they turn out to be equally important for the service and manufacturing sector.

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File URL: https://lirias.hubrussel.be/bitstream/123456789/2798/1/09HRP28.pdf
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Bibliographic Info

Paper provided by Hogeschool-Universiteit Brussel, Faculteit Economie en Management in its series Working Papers with number 2009/28.

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Length: 30 page
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:hub:wpecon:200928

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Web page: http://research.hubrussel.be
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Related research

Keywords: location; new economic geography; regions; sectors;

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References

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  1. Fally, Thibault & Paillacar, Rodrigo & Terra, Cristina, 2010. "Economic geography and wages in Brazil: Evidence from micro-data," Journal of Development Economics, Elsevier, vol. 91(1), pages 155-168, January.
  2. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
  3. Overman, Henry G. & Ulltveit-Moe, Karen-Helene & Venables, Anthony J., 2000. "Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU," CEPR Discussion Papers 2618, C.E.P.R. Discussion Papers.
  4. MION, Giordano, . "Spatial externalities and empirical analysis: the case of Italy," CORE Discussion Papers RP -1839, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Haaland, J.I. & Kind, H.J. & knarvik, K.H.M. & Torstensson, J., 1998. "What Determines the Economic Geography of Europe?," Papers 19/98, Norwegian School of Economics and Business Administration-.
  7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  8. Armando Pires, 2006. "Estimating Krugman’s Economic Geography Model for the Spanish Regions," Spanish Economic Review, Springer, vol. 8(2), pages 83-112, June.
  9. 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.
  10. Steven Brakman & Harry Garretsen & Marc Schramm, 2004. "The Spatial Distribution of Wages: Estimating the Helpman-Hanson Model for Germany," Journal of Regional Science, Wiley Blackwell, vol. 44(3), pages 437-466.
  11. repec:hal:cesptp:hal-00633816 is not listed on IDEAS
  12. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
  13. Forslid, Rikard, 1999. "Agglomeration with Human and Physical Capital: an Analytically Solvable Case," CEPR Discussion Papers 2102, C.E.P.R. Discussion Papers.
  14. Knaap, Thijs, 2006. "Trade, location, and wages in the United States," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 595-612, September.
  15. Puga, Diego, 1999. "The rise and fall of regional inequalities," European Economic Review, Elsevier, vol. 43(2), pages 303-334, February.
  16. K.H. Midelfart & H.G. Overman & S.J. Redding & A.J. Venables, 2000. "The location of European industry," European Economy - Economic Papers 142, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  17. Laura Hering & Sandra Poncet, 2008. "The Impact of Economic Geography on Wages: Disentangling the Channels of Influence," Working Papers 2008-20, CEPII research center.
  18. Brakman, Steven & Garretsen, Harry, 2006. "New economic geography: Closing the gap between theory and empirics," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 569-572, September.
  19. LaFountain, Courtney, 2005. "Where do firms locate? Testing competing models of agglomeration," Journal of Urban Economics, Elsevier, vol. 58(2), pages 338-366, September.
  20. Kim, Sukkoo, 1999. "Regions, resources, and economic geography: Sources of U.S. regional comparative advantage, 1880-1987," Regional Science and Urban Economics, Elsevier, vol. 29(1), pages 1-32, January.
  21. Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2002. "New economic geography in Germany : testing the Helpman-Hanson model," HWWA Discussion Papers 172, Hamburg Institute of International Economics (HWWA).
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Citations

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Cited by:
  1. Pierre-Philippe Combes & Henry G. Overman, 2003. "The spatial distribution of economic activities in the European Union," LSE Research Online Documents on Economics 20023, London School of Economics and Political Science, LSE Library.
  2. Ulrich Zierahn, 2012. "The effect of market access on the labor market: Evidence from German reunification," MAGKS Papers on Economics 201239, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  3. Farmanesh, Amir, 2009. "Regional dimensions of economic development in Iran: A new economic geography approach," MPRA Paper 13580, University Library of Munich, Germany.
  4. Reinhold Kosfeld & Hans-Friedrich Eckey, 2008. "Market Access, Regional Price Level and Wage Disparities: The German Case," MAGKS Papers on Economics 200814, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  5. Hering, Laura & Poncet, Sandra, 2009. "The impact of economic geography on wages: Disentangling the channels of influence," China Economic Review, Elsevier, vol. 20(1), pages 1-14, March.
  6. Stefan Gruber, 2010. "To Migrate or to Commute?," Review of Economic Analysis, Rimini Centre for Economic Analysis, vol. 2(1), pages 110-134, January.
  7. Xiuyan Liu & Xingmin Yin, 2010. "Spatial externalities and regional income inequality: Evidence from China’s prefecture-level data," Frontiers of Economics in China, Springer, vol. 5(2), pages 325-338, June.
  8. Jesús López-Rodríguez & Daisuke Nakamura, 2011. "Mind the Remoteness! Income disparities across Japanese Prefectures," Estudios de Economia, University of Chile, Department of Economics, vol. 38(2 Year 20), pages 393-417, December.
  9. Peter Huber & Michael Pfaffermayr & Yvonne Wolfmayr, 2006. "Are there Border Effects in the EU Wage Function?," CESifo Working Paper Series 1880, CESifo Group Munich.
  10. Laura Hering & Sandra Poncet, 2006. "Market Access Impact on Individual Wage: Evidence from China," Working Papers 2006-23, CEPII research center.
  11. Mehmet Burak Turgut, 2014. "Regional Economic Activity in Turkey: A New Economic Geography Approach," Working Papers 2014/5, Turkish Economic Association.
  12. Reinhold Kosfeld & Hans-Friedrich Eckey, 2010. "Market access, regional price level and wage disparities: the German case," Jahrbuch für Regionalwissenschaft, Springer, vol. 30(2), pages 105-128, September.

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