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The non-stationary influence of geography on the spatial agglomeration of production in the EU

Author

Listed:
  • Chasco, Coro
  • López, Ana María
  • Guillain, Rachel

Abstract

In this paper, we investigate the relative importance of geographic features on the location of production in the EU. Specifically, we want to quantify how much of the spatial pattern of GDP can be attributed to only exogenous first nature elements (physical and political geography) and how much can be derived from endogenous second nature factors (man-made agglomeration economies). In order to disentangle both effects empirically, and to learn how they are interrelated, we control for second nature. We use a methodology based on an analysis of variance (ANOVA), which is applied to a panel of 1,171 European NUT-3 in 2006. We demonstrate that -due to a high degree of spatial non-stationarity present in the data- results can be biased if spatial autocorrelation and spatial heterogeneity, as well as multicollinearity and endogeneity, are not properly taken into account.

Suggested Citation

  • Chasco, Coro & López, Ana María & Guillain, Rachel, 2008. "The non-stationary influence of geography on the spatial agglomeration of production in the EU," MPRA Paper 10737, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:10737
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    File URL: https://mpra.ub.uni-muenchen.de/10737/1/MPRA_paper_10737.pdf
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    References listed on IDEAS

    as
    1. Olga Alonso-Villar & Jose-MarIa Chamorro-Rivas & Xulia Gonzalez-Cerdeira, 2004. "Agglomeration economies in manufacturing industries: the case of Spain," Applied Economics, Taylor & Francis Journals, vol. 36(18), pages 2103-2116.
    2. Disdier, Anne-Celia & Mayer, Thierry, 2004. "How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 280-296, June.
    3. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
    4. Graves, Philip E., 1979. "A life-cycle empirical analysis of migration and climate, by race," Journal of Urban Economics, Elsevier, vol. 6(2), pages 135-147, April.
    5. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
    6. Alberto F. Ades & Edward L. Glaeser, 1995. "Trade and Circuses: Explaining Urban Giants," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 195-227.
    Full references (including those not matched with items on IDEAS)

    Citations

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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, vol. 60(C), 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, vol. 55(1), pages 61-101, October.

    More about this item

    Keywords

    Agglomeration; Geography; Spatial Heterogeneity; Endogeneity; EU Regions;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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