Interregional Spillovers Research Articles

Related diversification of high-quality technologies within Chinese cities

This study explores the diversification of high-quality technologies within Chinese cities from 2000 to 2015. Our results reveal that both high-quality and low-quality technological portfolios contribute to high-quality technological diversification. High-quality portfolios dominate this process as provide high-value knowledge that can be shared with new related technologies. Meanwhile, low-quality portfolios play a complementary role in this process by facilitating local knowledge deepening, in which existing low-value knowledge gradually evolves into high-value one through local interaction. Moreover, technological relatedness and interregional spillovers are substitutable when contributing to the diversification of high-quality technologies.

A spatial macroeconomic analysis of the equity-efficiency trade-off of the European cohesion policy

ABSTRACT In this study we use a spatial dynamic general equilibrium model to analyse the macroeconomic impact of cohesion policy-like investments in nine net beneficiary member states of the European Union. We examine whether or not the objective of reducing regional disparities (equity) prevents the interventions from maximising their impact on national GDP impact (efficiency) by looking at GDP multipliers and interregional spillovers. We find that there may be an equity-efficiency trade-off depending on the characteristics of both the investments made and the targeted regional economies. Moreover, the analysis shows that the growth spillovers from more developed to less developed regions are limited. This implies that, in order to reduce regional disparities, investment must be made in the less developed regions of each country.

Межрегиональные эффекты инноваций в России: анализ с позиций байесовского подхода

This study analyzes the interregional effects of innovation in Russia. The hypothesis of the presence of interregional effects is tested by combining the methods of spatial econometrics and Bayesian approach. Using panel data on Russian regions for the period from 2000 to 2021, the author calculates posterior probabilities for a set of spatial regression models that model interregional effects of innovation in different ways. Within the framework of Bayesian approach 6 models were selected for comparison: model without spatial effects (OLS), model with spatial lag of the dependent variable (SAR), model with spatial lag of the error (SEM), model with spatial lags of the explanatory variables (SLX), spatial Durbin model with lags of dependent and explanatory variables (SDM), as well as spatial Durbin model with lags of the explanatory variables and error (SDEM). Based on our calculations, we can conclude that the spatial correlation of innovation in Russian regions is not as strong as it has been assumed in previous studies. This can be considered as evidence in favor of the fact that the concept of interregional spillovers of innovations is poorly consistent with the historical, institutional and territorial peculiarities of Russia, and the methods generally accepted in other countries for such analysis are unsuitable in the Russian context. The results obtained can be taken into account in further research involving spatial modeling of regional innovations. More attention should be paid to the spatial effects of explanatory variables, in particular, interregional spillovers of R&D expenditures, as well as dynamics in the innovation process

Linkage‐ and structure‐based technological proximity and interregional spillovers of innovation growth

AbstractThis paper explores the roles of different types of technological proximity on the interregional spillovers of innovation growth. Using a panel dataset containing Chinese province patents and R&D inputs from 2002 to 2019, this paper estimates a knowledge production function with the spatial weight matrices constructed based on the linkage‐based and structure‐based technological proximity. We find that the two types of technological proximity are significantly different and their contributions to interregional innovation spillovers differ. The structure‐based proximity shows a lower influence on spillovers and its effect in the process of interregional innovation spillovers is affected by the regional development level. This paper originates to clarify two conceptualizations of technological proximity, compare their influences on innovation spillovers, and explore their regional differences.

Vive le Tour!? Estimating the place‐based benefits of hosting the Tour de France

AbstractThe Tour de France (TdF) is one of the biggest and most recognized annual sporting events in the world. Cities and regions participate actively by hosting a stage start and/or finish, but it is unclear if there are place‐based benefits from such local engagements. We estimate the direct and spatially indirect immediate regional benefits of hosting a TdF stage using monthly tourism data for French départements during 2011–2020. Our static and dynamic panel regressions indicate that hosting a TdF stage leads to significant increases in tourist arrivals and nights spent vis‐à‐vis similar départements not hosting a stage at the same time. Results are found to be robust when we run placebo tests, matching‐based estimation to deal with regional heterogeneity and associated treatment endogeneity as well as spatially augmented estimations to account for interregional spillovers to départements not directly hosting a stage start/finish, for example, to those located along the route of a TdF stage. We use the obtained treatment estimates to discuss the regional economic impact of the TdF and their ramifications for tourism‐based regional development and event management.

Inter-sectoral and inter-regional knowledge spillovers: The role of ICT and technological branching on innovation in high-tech sectors

The aim of this paper is to examine the patenting specialization of OECD regions in high-tech (HT) domains, with a particular emphasis on the impact of information and communication technology (ICT) on innovation performance at both the extensive and intensive levels. Considering ICT as a general-purpose technology (GPT) and recognizing its influence as a knowledge driver on regional innovation, we investigate the role of ICT agglomeration in promoting HT innovation, specifically examining whether this effect is driven by regions that exhibit innovation in ICT. Additionally, we explore the inter-sectoral and inter-regional branching dynamics in HT innovation development by examining the relative proximity between HT technologies. To ensure the robustness of our findings regarding the effects of ICT agglomeration (technologically advanced) and technological proximity, we employ fixed-effects models, quantile regression, and generalized method of moments (GMM) estimators. Furthermore, we employ a Spatial Durbin Model to examine inter-regional spillover effects. Our findings indicate that the propensity for innovation at the extensive level is influenced by ICT agglomeration, but this positive impact is contingent upon regions maintaining technological specialization in ICT. Moreover, we observe inter-sectoral innovation spillovers resulting from technological proximity between technologies, as well as inter-regional spillovers stemming from spatial proximity.

The role of interregional and inter-sectoral knowledge spillovers on regional knowledge creation across US metropolitan counties

ABSTRACT This paper relies on a regional knowledge production function to examine the heterogeneous determinants of knowledge creation across five US manufacturing sectors and 853 metropolitan counties over the period 2001–08. Using a Tobit model with state fixed effects, the results indicate that local intra- and inter-sectoral research and development (R&D) investments by the private sector as well as university R&D play a key role in knowledge creation across all sectors under study. We also find that the role of short- versus long-distance interregional spillovers on knowledge creation varies greatly across sectors. These key features improve the design of future local and national innovation policies.

Equilibrium dynamics in a model of growth and spatial agglomeration

AbstractWe present a multiregional endogenous growth model in which forward-looking agents choose their regions to live in, in addition to consumption and capital accumulation paths. The spatial distribution of economic activity is determined by the interplay between production spillover effects and urban congestion effects. We characterize the global stability of the spatial equilibrium states in terms of economic primitives such as agents’ time preference and intra- and interregional spillovers. We also study how macroeconomic variables at the stable equilibrium state behave according to the structure of the spillover network.

Threshold Effect of the Internet on Regional Innovation in China

Internet business adoption is an essential determinant of regional innovation which has received little attention in the literature. This paper emphasizes the role and threshold effect of Internet business adoption in increasing regional innovation outputs. We construct a threshold spatial autoregressive model to illustrate the nonlinear positive impact of Internet business adoption on innovation, simultaneously estimating interregional knowledge spillovers. To test threshold effect and interregional knowledge spillover, we use province-level panel data set in China and calculate Moran’s I and LR-like statistics to confirm the nonlinearity and spatial dependence. Within the empirical model, we find a positive relationship between the number of websites owned by local firms and the number of patents filed in that specific region. Our analysis suggests that Internet business adoption has a greater marginal benefit on the innovation of isolate regions. The results also indicate that ignoring interregional knowledge spillover may cause mistakes in the model on regional innovation systems. Policy implications for these results suggest that the government should not only pay attention to Internet development of the whole country but also encourage the reduction of digital divisions among regions

The benefits of being a multi-capital: The economic impact of the international and European institutions and interest groups

Brussels is known worldwide for hosting (most of) the European institutions as well as several other international organisations like North Atlantic Treaty Organization (NATO). Besides the symbolic political value, their presence has an economic impact because of their administrative activities and staff remunerations. Estimating the economic impact poses two main challenges. First, the supranational nature of these organisations makes it challenging to quantify the size of these institutions and related bodies because country-based statistical systems hardly account for transnational organisations. Second, as these institutions and organisations mainly rely on taxpayers’ funding, policymakers need transparent estimates to assess the implications of their decisions as well as for a matter of accountability. For these purposes, a meticulous data collection is carried out, and transparent assumptions are used to estimate the local economic multiplier effect of these activities accounting for operational expenditures, employees’ consumption as well as (Belgian) taxes and saving. The results show that the economic impact for the Brussels-Capital Region lies between 23% and 26% of regional turnover and 19% and 20% of employment, while interregional spillovers are estimated being around 1.5% to 1.7% of regional turnover and 0.6% to 0.7% of employment for both Flemish and Walloon regions.

Universities, students and regional economies: a symbiotic relationship?

ABSTRACT This paper examines the heterogeneous effect of student spending in UK NUTS-2 regions. Impact analyses of the more than £45 billion students spend each year have so far been agnostic of the regional absorptive capacity to benefit from this expenditure. Building a multi-regional input–output model for the UK and combining it with data on student expenditure, domicile and level of study, the paper finds significant regional heterogeneity in gross value added and employment multipliers as well as in interregional spillovers. The analysis shows how important student expenditure is for regional economies and the symbiotic relationship between student spending and regional industrial structures that produce varying impact outcomes.

Upgrading or downgrading: China's regional carbon emission intensity evolution and its determinants

One of China's major national targets is to environmentally upgrade its economy. In this paper, we define environmental upgrading as lowering the carbon intensity. The disparities among China's regions suggest to examine China's carbon emission performance at the regional level. For this purpose, we use inter-regional input-output tables (for 2002, 2007, and 2012) that distinguish processing exports from ordinary exports. The regional emission intensities (EIs) show environmental downgrading in the period 2002–2007 and upgrading during 2007–2012. To identify the determinants of the evolution of regional EIs, we have employed a multiplicative structural decomposition analysis. Changes in direct emission coefficients and changes in production technology are found to be the major determinants. However, next to these standard determinants, we also evaluate the effects on the changes in regional EIs of changes in inter-regional trade and changes in inter-regional spillovers. Changing inter-regional trade is found to have increased the EI significantly in western and central regions. This suggests that more “dirty” production was shifted from coastal to inland regions. Our study yields clear policy recommendations for achieving China's transformation to a low-carbon economy. • China's regional carbon emission performance experienced “downgrading” first and then “upgrading” during 2002–2012. • There are large regional disparities in the emission intensity (EI) evolution. • China's inter-regional input-output tables that distinguish processing exports are adopted. • Multiplicative structural decomposition analysis (SDA) is used to identify the determinants of China's regional EI changes. • Shifts of “dirty” production from coastal to inland regions have increased the EIs in inland regions.

The ‘certain’ returns from expenditures for ‘uncertain’ activities: a local multiplier approach to evaluate regional R&I policy

ABSTRACT The paper proposes a policy evaluation approach to estimate the local multiplier effect of (public) R&I expenditures in the context of regional innovation systems (RIS). Starting from input-output tables and recent improvements in local multipliers, the proposed approach tracks all economic flows generated by the initial public R&I expenditures, distinguishing direct impact and subsequent effects on the supply chain, consumption, fiscal flows and inter-regional spillovers. The main interest of this approach is the focus on the ‘certain’ returns occurring within a RIS, irrespective of their ‘uncertain’ innovative outcomes, i.e. this approach tracks the economic flows of R&I expenditures even if innovation-oriented activities should fail to provide the expected benefits for regional productivity. The case of Innoviris, the Brussels regional R&I agency, is discussed to validate this approach unpacking the economic flows in a context of strong interregional linkages showing the spatial distribution of economic returns generated by R&I-oriented public expenditures.

Estimating road transport costs between and within European Union regions

Transport costs are a crucial element of applied spatial models such as spatial macro-economic models or interaction models for e.g. trade, migration or commuting. However, good estimates of these costs are not available at lower levels of spatial aggregation. In applied work, the distance between two regions is often approximated by the distance between the largest city in each region. For costs within regions, researchers often resort to crude ad-hoc approximations relating internal distance to the area of the region assuming a uniform internal distribution. This paper improves on this by considering averages of transport costs calculated between extremely large random samples of centroids which are drawn from a population grid. This allows calculating distances, travel times and transport costs both between and within regions, while taking into account the unequal distribution of population within the regions. The use of a detailed road network and many auxiliary datasets allows performing policy analysis. We assess the impact on transport cost of an increase in fuel prices, and find that it has a relatively high effect on transport costs in Eastern Europe. We evaluate transport infrastructure investment of the European Cohesion Policy program 2014–2020. The largest decreases in transport costs are found in targeted regions in Eastern Europe while the effect is much smaller in targeted regions in Southern Europe, suggesting decreasing returns to further transport infrastructure in these regions. We find significant inter-regional spillovers to regions directly bordering the regions targeted by the policy in Eastern Europe, such as in Germany and Austria, but also Finland and Northern Italy. The positive spillovers to EU regions in Western Europe are quite small.

The effects of urban transformation on productivity spillovers in China

We analyze the impact of China's massive urban-transformation process on productivity spillovers for the east-coast electrical apparatus sector by combining the sub-prefecture-level population census data in 2000 and 2010 with detailed firm-level data from 1999 to 2007. At the sub-prefecture level, we identify three types of regions (metro-core, metro-ring, and non-metro) and develop three urban transformation measures (modernization, mobility, and disparity). A tailored spatial Durbin model enables us to distinguish between intra- and inter-regional technology spillovers. The baseline model reveals strong technology spillovers between neighboring firms, particularly those in close range. All three types of urban-transformation measures have significant impacts on technology spillovers. Modernization and mobility boost spillover effects, whereas economic disparity impedes inter-regional spillovers. Based on the structural difference between the three types of regions, our findings imply that metro-ring and non-metro regions are the major beneficiaries of productivity spillovers related to urban transformation.

Decentralization with porous borders: public production in a federation with tax competition and spillovers

We analyze the strategic interaction of regional and federal governments using a model that includes fiscal externalities in the form of inter-regional capital tax competition and technical externalities in the form of inter-regional spillovers. The federal government aims to correct for these inefficiencies using a transfer system. If the regional governments are policy leaders (such that federal policy is set conditional on regional choices), they will internalize both fiscal and technical externalities but free-ride on the transfer system. Efficiency can be achieved by introducing a second transfer scheme that is independent of regional public production. If the federal government sets its policy first and can commit itself to it, the outcome is efficient only if matching grants are used that are financed outside of the transfer system.

Estimating trade flows between regions of KwaZulu-Natal, South Africa

Background: The enhancement of trade creates employment and wealth and should be promoted. During planning and economic development of a region knowledge regarding the effect of initial actions on the final economic indicators such as total demand, purchases, sales, imports, exports, value addition and employment is indispensable. The specific value of trade flows and the multiplier effects involved, indicating the magnitude of linkages on a local and global level is essential. Aim: The final and intermediate trade flows between regions of KwaZulu-Natal, South Africa, are investigated in this article. Setting: The five major regions of KwaZulu-Natal Province. Methods: To investigate these spatial linkages, a modified multiregional input-output model was constructed. A survey approach was used to construct the model and involved primary data collected through a specially designed survey. Results: The results show that Richards Bay and Durban had the highest output multipliers, leading to the largest effect on output and trade flows. It was found that the values of intra-trade of these regions are much higher than the trade between the various urban regions. Durban has a fairly open economy, trading significantly with the other four regions, followed by Pietermaritzburg and Richards Bay. Port Shepstone and Newcastle are relatively closed economies, trading predominantly internally. Conclusion: The results suggest that there is indeed some flows of goods and services between the five regions, both intermediate and final. However, the estimated inter-regional spillovers, as well as feedback effects, seem to be rather limited.

The Elusive Quest for the Holy Grail of an Impact of EU Funds on Regional Growth

We analyze the impact of EU structural and cohesion funds on economic growth of European regions, using 2SLS to tackle the potential problem of endogeneity, and estimating a spatial model to account for inter-regional spillovers. We use the presence of environmentally protected areas (under the European Union’s Natura 2000 program) as instruments for the receipts of funds from the EU Cohesion Policy. We find that the European funds have a significant and positive effect on regional economic growth in the EU. The inter-regional spillovers in the effect of Cohesion Policy on regional growth are found to be important: most of the effect takes place outside of the recipient region rather than inside. However, there is considerable heterogeneity in the effect of Cohesion Policy across individual EU member states: the effect is stronger in the new member states, and weak or negative in the countries hit by the recent austerity measures. Finally, our results confirm the positive impact of institutional quality: improvements in economic development across the EU do not necessarily require only redistribution: institutional reform can also help boost growth performance.

Equilibrium Dynamics in a Model of Growth and Spatial Agglomeration

We present a multi-regional endogenous growth model in which forward-looking agents choose their regions to live in, in addition to consumption and capital accumulation paths. The spatial distribution of economic activity is determined by the interplay between production spillover effects and urban congestion effects. We characterize the global stability of the spatial equilibrium states in terms of economic primitives such as agents' time preference and intra- and inter-regional spillovers. We also study how macroeconomic variables at the stable equilibrium state behave according to the structure of the spillover network.

Modeling the Dynamics and Spillovers of the Health Labor Market: Evidence from China’s Provincial Panel Data

Health workforce misdistribution is a major challenge faced by almost all countries. A more profound understanding of the dynamics of the health labor market provides evidence for policy makers to balance health workforce distribution with solid evidence. However, one major deficit of existing theoretical and empirical studies is that they often ignore the intra-regional spillovers of the health labor market. This study builds a theoretical “supply–demand–spillover” model that considers both intra-regional supply and demand-side factors, and inter-regional spillovers, hence providing a theoretical reference point for further in-depth studies. Using spatial econometric panel models, the effect of all determinants and spillovers were empirically measured based on a Chinese panel data set, shedding light on health workforce policies in China.