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The Influence of Geography on the Spatial Agglomeration of Production in the European Union

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  • Coro Chasco
  • Ana Lopez
  • Rachel Guillain

Abstract

We investigate the relative impact of geographic features on the location of production in the European Union. Specifically, we attempt to quantify how much of the spatial pattern of GDP can be attributed to exogenous first-nature elements alone and how much can be derived from endogenous second-nature factors. In order to disentangle both effects empirically, we control for second-nature factors. A method based on the decomposition of the per capita GDP variance is applied to a panel of 1,171 European NUTS 3 regions for 2006. We demonstrate that variable and model misspecifications may bias results unless proper allowance is made for spatial autocorrelation and spatial heterogeneity, as well as multicollinearity and endogeneity. RÉSUMÉ L'objectif de cet article est d'analyser l'impact relatif des caractéristiques géographique sur la localisation de la production dans l'Union Européenne. Plus spécifiquement, nous quantifions dans quelle mesure le schéma de répartition spatiale du PIB peut être attribué à des causes exogènes de première nature uniquement et à des facteurs endogènes de seconde nature. Pour séparer ces deux effets empiriquement, les facteurs de seconde nature sont contrôlés. Une méthode basée sur la décomposition de la variance du PIB par tête est appliquée sur un panel de 1 171 régions européennes à l'échelle NUTS-3 en 2006. Il est établi que des mauvaises spécifications relatives aux variables ou aux modèles peuvent biaiser les résultats si une attention particulière n'est pas dévolue à l'autocorrélation et l'hétérogénéité spatiales mais aussi à la multicolinéarité et à l'endogénéité. RESUMEN En este artículo, se analiza el impacto relativo que tienen las características geográficas sobre la localización de la producción en la Unión Europea. En concreto, se trata de cuantificar qué parte de la localización espacial del PIB puede ser atribuida únicamente a elementos exógenos de primera naturaleza y qué parte se deriva de factores endógenos de segunda naturaleza. Con objeto de separar ambos efectos empíricamente, proponemos controlar por factores de segunda naturaleza. Para ello, se plantea un método basado en la descomposición de la varianza del PIB per cápita de un panel de 1.171 regiones europeas NUT 3, con datos referidos a 2006. Es importante poner de manifiesto que los errores de especificación tanto en el modelo como en las variables pueden sesgar los resultados, a menos que se tengan en cuenta adecuadamente los efectos de autocorrelación y heterogeneidad espacial, y otros problemas, como la multicolinealidad y endogeneidad.

Suggested Citation

  • Coro Chasco & Ana Lopez & Rachel Guillain, 2012. "The Influence of Geography on the Spatial Agglomeration of Production in the European Union," Spatial Economic Analysis, Taylor & Francis Journals, vol. 7(2), pages 247-263, June.
  • Handle: RePEc:taf:specan:v:7:y:2012:i:2:p:247-263 DOI: 10.1080/17421772.2012.669490
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    References listed on IDEAS

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    Cited by:

    1. Wahl, Fabian, 2016. "Does medieval trade still matter? Historical trade centers, agglomeration and contemporary economic development," Regional Science and Urban Economics, Elsevier, pages 50-60.
    2. Rafael González-Val, 2015. "Cross-sectional growth in US cities from 1990 to 2000," Journal of Geographical Systems, Springer, vol. 17(1), pages 83-106, January.
    3. Timo Mitze & Torben Schmidt, 2015. "Internal migration, regional labor markets and the role of agglomeration economies," The Annals of Regional Science, Springer;Western Regional Science Association, pages 61-101.

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