IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa11p1340.html

Small scale economic differentiation – A multi-level analysis with indirect closure

Author

Listed:
  • Anne Margarian

Abstract

We want to isolate systematically differing small-scale agglomeration-patterns, which indicate different types of competition between localities. We apply a technique of indirect closure based on the differing observed relation between local business tax-rate and tax-revenue and use a mixed multi-level model in order to cope with local dependencies on different scales. Thereby it is shown that small-scale agglomeration effects, i.e. differing development potentials of similar municipalities, are at least partially determined by settlement characteristics, geographical relative position and industry structure. Since these influences interact in various ways the observed patterns are very complex. It is due to small-scale "agglomeration-effects", defined here as a positive observed relation between tax-rate and tax-revenue, that municipalities of the same type may nevertheless have different potentials in economic development. On the other hand, a high mobility of firms in a dynamic environment strengthens the competition-effect as indicated by a negative relation between tax-rate and tax-revenue. Under such circumstances municipalities will strive for convergence. In empirical studies comparing regional developments on various geographical scales these heterogeneous relations will have to be taken into account in order to reach generalisable conclusions. we also conclude that regional economic policy cannot apply identical concepts independently of the wider economic environment. Instead it has to react to the differing endogenous potentials of localities for economic development.

Suggested Citation

  • Anne Margarian, 2011. "Small scale economic differentiation – A multi-level analysis with indirect closure," ERSA conference papers ersa11p1340, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa11p1340
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa11/e110830aFinal01340.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Buettner, Thiess, 2006. "The incentive effect of fiscal equalization transfers on tax policy," Journal of Public Economics, Elsevier, vol. 90(3), pages 477-497, February.
    2. Judith D. Singer, 1998. "Using SAS PROC MIXED to Fit Multilevel Models, Hierarchical Models, and Individual Growth Models," Journal of Educational and Behavioral Statistics, , vol. 23(4), pages 323-355, December.
    3. Ann Markusen, 1996. "Sticky Places in Slippery Space: A Typology of Industrial Districts," Economic Geography, Taylor & Francis Journals, vol. 72(3), pages 293-313, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lorenzo Ciapetti, 2011. "Technological Change, Knowledge Integration and Adaptive Processes: The Mechatronic Evolution of the Reggio Emilia District," Chapters, in: Paul L. Robertson & David Jacobson (ed.), Knowledge Transfer and Technology Diffusion, chapter 5, Edward Elgar Publishing.
    2. Marta Gancarczyk, 2010. "Model schyłku i odrodzenia klastrów," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-21.
    3. Pedro Valadas Monteiro, 2016. "The role of knowledge-intensive service activities on inducing innovation in co-opetition strategies: lessons from the maritime cluster of the Algarve region," International Journal of Management and Enterprise Development, Inderscience Enterprises Ltd, vol. 15(1), pages 78-95.
    4. Kean Birch & Andrew Cumbers, 2010. "Knowledge, Space, and Economic Governance: The Implications of Knowledge-Based Commodity Chains for Less-Favoured Regions," Environment and Planning A, , vol. 42(11), pages 2581-2601, November.
    5. Roberta Rabellotti & Alessia Amighini, 2003. "The effect of globalisation on industrial districts in Italy: evidence from the footwear sector," ERSA conference papers ersa03p500, European Regional Science Association.
    6. V. I. Blanutsa, 2022. "Geographic Research of the Platform Economy: Existing and Potential Approaches," Regional Research of Russia, Springer, vol. 12(2), pages 133-142, June.
    7. Annika Rickne, 2006. "Connectivity and Performance of Science-based Firms," Small Business Economics, Springer, vol. 26(4), pages 393-407, May.
    8. Thiess Buettner & Robert Schwager & Sebastian Hauptmeier, 2011. "Efficient Revenue Sharing and Upper-Level Governments: Theory and Application to Germany," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(4), pages 647-667, December.
    9. Martin Heidenreich (ed.), 2012. "Innovation and Institutional Embeddedness of Multinational Companies," Books, Edward Elgar Publishing, number 14459, August.
    10. Michael Smart, 2007. "Raising taxes through equalization," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1188-1212, November.
    11. Lesley Welman & Sanette LA Ferreira, 2016. "The co-evolution of Saldanha Bay (town and hinterland) and its Port," Local Economy, London South Bank University, vol. 31(1-2), pages 219-233, February.
    12. Rani Jeanne Dang & Christian Longhi & Karine Roux & Damien Talbot & Catherine Thomas, 2009. "Territorial innovation dynamics: a knowledge based perspective," Post-Print halshs-00365192, HAL.
    13. Emanuele Bacchiocchi & Massimo Florio & Anna Giunta, 2012. "Internationalisation and the agglomeration effect in the global value chain: the case of Italian automotive suppliers," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 5(3), pages 267-290.
    14. Andrés Rodríguez-Pose & Tobias D. Ketterer, 2012. "Do Local Amenities Affect The Appeal Of Regions In Europe For Migrants?," Journal of Regional Science, Wiley Blackwell, vol. 52(4), pages 535-561, October.
    15. Mario Davide Parrilli, 2010. "Heterogeneous Social Capitals: A New Window of Opportunity for Local Economies," Working Papers 2010R06, Orkestra - Basque Institute of Competitiveness.
    16. Mercedes Delgado & Michael E. Porter & Scott Stern, 2016. "Defining clusters of related industries," Journal of Economic Geography, Oxford University Press, vol. 16(1), pages 1-38.
    17. Silvia Sacchetti & Ermanno Tortia, 2012. "The internal and external governance of cooperatives: the effective membership and consistency of value," AICCON Working Papers 111-2012, Associazione Italiana per la Cultura della Cooperazione e del Non Profit.
    18. Sarah Armitage & Noël Bakhtian & Adam Jaffe, 2024. "Innovation Market Failures and the Design of New Climate Policy Instruments," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 5(1), pages 4-48.
    19. Imad Moosa & Larry Li & Riley Jiang, 2016. "Determinants of the Status of an International Financial Centre," The World Economy, Wiley Blackwell, vol. 39(12), pages 2074-2096, December.
    20. Carl Gaigné & Stéphane Riou, 2007. "Globalization, Asymmetric Tax Competition, and Fiscal Equalization," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 9(5), pages 901-925, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa11p1340. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.