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Industrial Location and Spatial Dependence: An Empirical Application

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  • Daniel Liviano
  • Josep-Maria Arauzo-Carod

Abstract

Liviano D. and Arauzo-Carod J.-M. Industrial location and spatial dependence: an empirical application, Regional Studies . This paper tries to resolve some of the main shortcomings in the empirical literature on location decisions for new plants, that is, spatial effects and over-dispersion. Spatial effects are omnipresent, being a source of over-dispersion in the data as well as a factor shaping the functional relationship between the variables that explain a firm's location decisions. Using count data models, empirical researchers have dealt with over-dispersion and excess zeros by developments of the Poisson regression model. This study aims to take this a step further by adopting Bayesian methods and models in order to tackle the excess of zeros, spatial and non-spatial over-dispersion, and spatial dependence simultaneously. Data for Catalonia (Spain) are used and location determinants are analysed to that end. The results show that spatial effects are determinant. Additionally, over-dispersion is decomposed into an unstructured independently and identically distributed (i.i.d.) effect and a spatially structured effect.

Suggested Citation

  • Daniel Liviano & Josep-Maria Arauzo-Carod, 2014. "Industrial Location and Spatial Dependence: An Empirical Application," Regional Studies, Taylor & Francis Journals, vol. 48(4), pages 727-743, April.
    • Handle: RePEc:taf:regstd:v:48:y:2014:i:4:p:727-743
    DOI: 10.1080/00343404.2012.675054
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    References listed on IDEAS

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    1. Roberto Basile & Luigi Benfratello & Davide Castellani, 2010. "Location Determinants of Greenfield Foreign Investments in the Enlarged Europe: Evidence from a Spatial Autoregressive Negative Binomial Additive Model," Working papers 10, Former Department of Economics and Public Finance "G. Prato", University of Torino.
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    Cited by:

    1. Huasheng Song & Min Zhang & Ruqu Wang, 2016. "Amenities and spatial talent distribution: evidence from the Chinese IT industry," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(3), pages 517-533.
    2. Minghao Li & Stephan J. Goetz & Mark Partridge & David A. Fleming, 2016. "Location determinants of high-growth firms," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 28(1-2), pages 97-125, January.
    3. Sara C. Santos Cruz & Aurora A. C. Teixeira, 2021. "Spatial analysis of new firm formation in creative industries before and during the world economic crisis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(2), pages 385-413, October.
    4. Andrzej CieŚlik, 2013. "Determinants of the Location of Foreign Firms in P olish Regions: Does Firm Size Matter?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 175-193, April.
    5. Chandra R. Bhat & Rajesh Paleti & Palvinder Singh, 2014. "A Spatial Multivariate Count Model For Firm Location Decisions," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 462-502, June.
    6. Nielsen, Hana, 2021. "Coal and Sugar: The Black and White Gold of Czech Industrialization (1841-1863)," Lund Papers in Economic History 229, Lund University, Department of Economic History.

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