Economic Geography Theory Research Articles

Home market effects and increasing returns with non-constant marginal costs

Abstract We reexamine the role of increasing returns in production, central to trade and economic geography theories, focusing on the home market effect. We extend the conventional multi-industry new trade model to introduce (1) nonconstant marginal costs and (2) nonhomothetic production in factors. If factors that are more (less) intensively used in fixed costs than variable costs also have higher relative prices in large countries compared to small countries, then large countries exhibit larger (smaller) firm sizes and specialize in industries with decreasing (increasing) marginal costs. Notably, different levels of fixed costs have a limited impact on these patterns.

Prospects of Pakistan-Afghanistan Trade: A New Economic Geography Approach

This research examines the prospects of Pakistan- Afghanistan trade through the lens of new economic geography theory. The study focuses on bilateral trade between the two countries and Central Asian Republics, transit trade. Pakistan`s geographic location makes it an important country in the region for facilitating global connectivity and fostering trade with neighboring nations, providing access to world markets through its seaports and land routes. Pakistan is an important country for Afghanistan. Afghanistan, being a landlocked country, relies on Pakistan for access to international markets. On the other hand, Afghanistan provides access to Pakistan to energy-rich Central Asian Republics(CARs). The study finds that despite the significant geographical locations of Afghanistan and Pakistan bilateral trade between the two countries is behind its true potential while the transit trade facilities are being misused. The study also examines the factors hindering the full potential of Pak-Afghan bilateral and transit trade and provides policy recommendations.

Reinvestigating repurchase intentions for travel apps: a comparison of China's various tiers of cities

ABSTRACT The intense competition amongst travel apps, regardless of their popularity, has made repurchase intention a critical financial challenge for travel providers. By combining the Stimulus-Organism-Response (S-O-R) framework and the New Economic Geography (NEG) theory, this research examined how city tier disparities influence the experiential features of travel apps and user repurchase intentions. Survey data was acquired from 739 travel app users in China. The findings indicate that a set of context-based experiential features significantly influences utilitarian and hedonic values, and consequently leading to a notable increase in repurchase intentions. In addition, the outcomes of a multigroup analysis revealed that China’s users located in tier 1 city (i.e. Beijing) and tier 3 city (i.e. Kunming) had distinct effects on the hypothesised relationships. Theoretically, the research provides extensive implications to information systems and tourism literatures; whilst offering some actionable insights to travel practitioners.

FORMATION AND EVOLUTION OF THE THEORY OF REGIONAL ECONOMICS IN CHINA

FORMATION AND EVOLUTION OF THE THEORY OF REGIONAL ECONOMICS IN CHINA

Mapping the dynamics of FDI in China: Convergence, divergence, and policy insights within free trade zones and beyond

The uneven distribution of FDI contributes to inequality in economic development. Most studies on FDI in China use provincial data and parametric tools of analysis while delivering mixed findings regarding FDI’s distribution and free trade zones (FTZs) attractiveness. We investigate the convergence and transitional dynamics of relative FDI (RFDI) in China using visual tools of the distribution dynamics approach to a panel of 273 prefectural cities from 2003 to 2019. Convergence-divergence patterns are examined from inter- and intra-regional perspectives and FTZs vis-à-vis non-FTZ cities. In the long run, most entities within each region converge towards different RFDI values (from 0.05 to 0.25), far below the national average equal to one. FDI is the most unevenly distributed within the poorest western region. Furthermore, three (two) convergence clubs emerge among the non-FTZ (FTZ) entities around RFDI values of 0.05, 0.6 and 2.7 (2.5 and 10). The results corroborate the New Growth and New Economic Geography theories, indicating an absence of desirable spatial diffusion from affluent ‘core’ cities and FTZs to ‘peripheral’ entities outside the FTZs. Additionally, we provide a ‘policy priority list’ comprising western cities with above (below) average RFDI and the highest propensity to diverge further above (below) the national mean.

A Framework for Integrating Freight Transport, Urban Land Planning, and Infrastructure Management under Economic Geography Principles

This study presents a conceptual framework proposal for integrating urban freight initiatives (UFIs), or city logistics initiatives, into urban planning and urban management (UPUM) land use and infrastructure systems. As a novel approach, this framework integrates three components: Firstly, a conceptual basis on three economic geography theory principles—location, agglomeration, and urbanisation. Secondly, spatial analysis and subsequent clustering integrate companies’ spatial positions, their proximity to other companies, their freight intensity, and the characteristics of the zonal road infrastructure; these clusters are defined as freight traffic zones (FTZs). Thirdly, a functional yet strategic UFI clustering or grouping is proposed to work in an optimised and integrated manner with the FTZs’ opportunities for efficiency and reduced externalities. It is expected that the integrated result of these three components can serve to optimise freight initiatives and road infrastructure from a city governance perspective, reduce freight externalities, and function as a stakeholder cooperation tool from government-led, policy-driven perspectives. This research also identifies and characterises various variables influencing the emergence and existence (planned or organic) of FTZs and shows how these could be incorporated into high-level UPUM processes. Although it is deemed that the principles and methodological approach followed here could be common to urban areas, an example for the Metropolitan Area of the Aburra Valley (MAAV), in Colombia, is presented as an initial case study. Conclusively, this paper introduces a pioneering methodology for integrating UFIs into city or metropolitan governance, offering guidance for policymakers to promote sustainable freight systems.

Road Infrastructure, Supply Chain Costs Reduction, and Road Safety in Economic Geography Perspective

Purpose: While it is expected that road transport infrastructure may enhance supply chain cost reduction, the mechanisms and conditions under which road transport infrastructure may enhance supply chain cost reduction are less understood. Theoretical framework: Drawing insights from the economic geography perspective, and survey data from 359 senior managers of manufacturing firms in Ghana, we found support for the argument that road transport infrastructure is important in the quest to improve supply chain cost reduction. Methods: The hypothesized model was tested with survey data from beverage manufacturing firms in Ghana. The survey method is usually appropriate for strategic management studies. Results and Conclusion: Our findings also suggest that road safety does not just support supply chain cost reduction but serves as a transformative mechanism to reap superior supply chain cost reduction in a resource-constrained environment. Our findings make a contemporary contribution to the economic geography theory as well as important managerial guidance for managers in the supply chain management space in resource-constrained regions like SSA. Research implications: The outcome of this study offers an important extension to the frontiers of innovative literature in supply chain management. Originality/value: It also provides practical insight to practitioners in the manufacturing setting by emphasizing the need to pay crucial attention to road safety as well as invest in road infrastructure development in the quest to reduce supply chain costs.

Investigating economic synergy in the spatial structure of Tehran metropolitan region

Economic synergy is essential in functional polycentric metropolitan regions due to their high collaborative potential between area centers and subcenters, which results in greater competition. Our results indicate that, based on the theory of economic geography, economic activities in metropolitan regions tend to be concentrated and agglomerated initially due to economies of scale, before intentionally decentralizing due to diseconomies of scale arising from agglomeration. The spatial structure of metropolitan regions also tends to be morphologically polycentric, although there is evidence for a tendency toward functional polycentricity as well. Tehran metropolitan region has attracted industrial workshops over time due to the economies of scale and agglomeration economies, which in turn have increased functional centralization and spatial concentration in the region. Yet in recent decades, after the implementation of spatial policies of economic synergy, both the rate of specialization and diversification in the region's production structure have gradually increased; this can be considered a result of spatial policies of economic synergy. The example of Tehran's illustrates how policing strategies can promote a region's transition from monocentric to functional polycentric, enhancing the economic role of medium‐sized cities, creating specialized centers and clustered enterprises, and supporting network interaction between urban centers.

Spatial spillover effects of manufacturing agglomeration on China's total factor carbon productivity: evidence from the regulatory role of fiscal decentralization.

Based on the theory of new economic geography, this paper used panel data from 284 cities in China from 2006 to 2019 to determine the effects of spatial spillover and heterogeneity of manufacturing agglomeration (MA) on urban total factor carbon productivity (TFCP) and the regulatory effect of fiscal decentralization on the outcome. The results showed that (1) MA shifted from the eastern region of China to the central and western regions, with the center of gravity moving towards the south. The spatial pattern of urban TFCP displayed the solidifying characteristics of "low-level agglomeration and high-level dispersion," with technological progress being the primary driver. (2) The MA had a significant U-shaped effect on the TFCP of local and nearby cities, promoting the improvement of urban TFCP through Jacobs' and Porter's externalities but not MAR externalities. (3) Regarding regional differences, MA had a significant U-shaped impact on urban TFCP in the eastern and central regions. At different levels of manufacturing development, there was an inverted U-shaped relationship in both manufacturing and non-manufacturing metropolitan areas. For varying degrees of manufacturing industry agglomeration, increasing the level of MA improved urban TFCP in low agglomeration areas, but inhibited it in high agglomeration areas. (4) The implementation of fiscal decentralization nationwide and in the eastern and central regions significantly weakened the impact of MA on TFCP. Furthermore, fiscal decentralization significantly enhanced the influence of MA on TFCP in cities exhibiting high levels of economic development, advanced industrial structure and strict environmental regulations. Therefore, based on the unique developmental characteristics of the manufacturing industry in various cities, fiscal policies ought to be tailored to local circumstances to support key areas. This strategy should facilitate the high-quality development of manufacturing industry and low-carbon development of cities.

The Effect of Corporate Social Responsibility and Tourism Development on Regional Development in Berau Regency

The aim of the research is to test the truth of regional development theories, namely firm location theory and new economic geography theory, as well as functional development theory, with the research object being the PT company. Berau Coal in Berau district, East Kalimantan province. It recommends the results of research, namely the corporate social responsibility program and tourism development, towards regional development in Berau Regency, East Kalimantan Province. The method used in this research is a quantitative research method. Multivariate analysis is used in analyzing research, involving variables in a number greater than or equal to three variables. WarpPLS is mutivariate-based and can analyze structural equation modeling (SEM). The results of the research show that PT Berau Coal's corporate social responsibility (CSR) program has a positive and significant effect on regional development. The tourism development that has been carried out has been proven to have a positive and significant effect on regional financial independence. The existence of the tourism industry in Berau district has increased regional development. Regional financial independence will become more independent if the contribution of regional original income (PAD) to funding regional development is greater.

Reinforcing path marginalization: revealing the unaccounted labour organization at a mining frontier in Indonesia

Abstract How could we conceptualize path development taking place in regions dominated by extracting industries and subsistence economies? The article expands existing Evolutionary Economic Geography theory by focussing on extractive economies in a peripheral region that has, thus far, barely been covered. It challenges existing conceptualizations by highlighting a tin producing island in Indonesia. The article introduces the concept of path marginalization and its reinforcing mechanisms that explain the dynamics between large and artisanal mining activities. It examines how the mining path is reproduced by the interaction between multiple forms of labour organization that are normally unaccounted for.

The pollution control effect of regional integration: An empirical study based on Urban Agglomeration Planning in China.

Regional integration is an important trend of economic development worldwide, which helps to break the restrictions of administrative divisions on economic development and pollution control. According to the relevant theories of environmental economic geography, regional integration will have an important impact on regional pollution control. Based on China's urban panel data, we empirically tested the impact of regional integration on regional environmental pollution and its mechanism by using econometric analysis methods, such as the difference-in-differences model and the mediating effect model. We found that regional integration can effectively reduce urban pollutant emissions and that the emission reduction effect of regional integration is characterized by significant heterogeneity at different pollution levels. The mechanism analysis showed that the green technology innovation effect of regional integration is an important mechanism for promoting urban emission reduction. The conclusions of this paper enrich the relevant theories of environmental economic geography and provide new ideas to implement integration strategies to promote sustainable economic development in developing countries.

The Spatial Spillover Effect of Logistics and Manufacturing Co-Agglomeration on Regional Economic Resilience: Evidence from China’s Provincial Panel Data

The logistics and manufacturing industries’ co-agglomeration (LMCA) and deep integration, as well as the industries’ digital transformation and intelligent upgrading, are of great significance to enhance regional economic resilience (EcoResi). This paper establishes a theoretical framework for LMCA and EcoResi based on the economic development theory and the new economic geography theory, explores the spatial spillover effect of LMCA on EcoResi, and measures the levels of LMCA and EcoResi. The data set is consisted of the indicators of LMCA and GDP growth rate of 30 provinces, centrally administered municipalities, and autonomous regions in China from 2006 to 2020. Spatial econometric models were used to empirically analyze the impact of LMCA on EcoResi based on provincial panel data. The results show that the improvement in LMCA not only improves the resilience of local economy, but it also has a significant spatial spillover effect. Further regional analyses show that LMCA has significant stimulating effects and spatial spillover effects on EcoResi in the central and western regions of China. However, the same effects are not significant in the eastern region of China. This research enriches the literature by suggesting effective ways to enhance EcoResi through LMCA.

Does the development zone promote population urbanization? Evidence from China

As the main space carriers of industrial agglomeration and land development, the development zones’ (DZs’) ability to absorb the population is crucial to the coordination of land urbanization and population urbanization. Based on the theory of New Economic Geography, this study uses China’s fifth and sixth census data to empirically analyze the impact and mechanism of DZs on population urbanization by comprehensively utilizing propensity score matching, difference-in-difference model and mediating effect model. Results show that the establishment of DZs can promote the population urbanization. When the dominant industries planned by the DZs are in line with the local comparative advantage, the intensity of population urbanization affected by the DZs will enhance. The “policy rents” provided by the DZs attract firms to gather, which in turn creates additional jobs by attracting new firms and expanding the scale of incumbent firms, attracting additional population inflow. From another perspective, the establishment of DZs improves labor’s wages and welfare, promotes the stable living of labor nearby, which boost population urbanization. In addition, the expansion of land supply is also a channel for the DZ to promote population urbanization.

Impacts of digital economy agglomeration on carbon emission: A two-tier stochastic frontier and spatial decomposition analysis of China

The digital economy agglomeration (DEAGG), which crucially influences global economic growth, is strongly correlated with carbon emissions performance. This study utilizes prefecture-level city data pertaining to China (sample period; 2006–2019), and it is based primarily on the new economic geography theory. The bilateral effects that DEAGG exerts on carbon emissions were initially investigated using a two-tier stochastic frontier analysis. Subsequently, the spatial econometric technique and the logarithmic mean Divisia index (LMDI) method were combined for a mechanism analysis. The empirical results indicated the following: (1) The agglomeration effect that DEAGG exerted on carbon emissions highly exceeds the spread effect, which leads to a negative net effect. (2) DEAGG reduces carbon emissions mainly by reducing the energy intensity effect and by inhibiting the population scale effect; moreover, the energy structure effect and the economic growth effect that are occasioned by DEAGG yield a hindering impact during the sample period. (3) Further analysis indicates that DEAGG narrows carbon inequality, and that it facilitates the realization of the co-benefits pertaining to air pollution mitigation. Therefore, to enhance DEAGG and environmental quality, we propose specific policy recommendations.

The Impact of High-Speed Rail on Economic Development: A County-Level Analysis

High-speed rail has an important impact on the location choices of enterprises and the labor force, which is reflected in a complex space–time process. Previous studies have been unable to show the change characteristics between enterprises and the labor force at the county level. Therefore, based on the new economic geography theory, we first constructed a theoretical analysis framework to explore high-speed railway’s impact on county economy development and then obtained the two economic subdivision factors’ impacts: industrial enterprises and secondary labor force. Then, based on the panel data of 1791 county units in China from 2003 to 2019, the study constructed a multi-period PSM-DID model to empirically explore high-speed rail’s impact on the county’s agglomeration of industrial enterprises and secondary labor force. The results show that high-speed rail has a long-term negative effect on the county area’s agglomeration of industrial enterprises. From the perspective of the labor force, high-speed rail has a long-term and continuous positive effect on the agglomeration of the secondary labor force in county units.

The evolving centres of gravity in China's oil and gas industry: Evidence from infrared radiation imaging gas flaring data

Traditional macro data distort information on oil and gas exploitation and processing capacities and cannot track the movement of gas combustion. This study proposes a new way to retrieve those capacities and to explore changes in the trajectory of China's oil and gas exploitation and processing centres via gas flaring based on a combination of kernel clustering-kernel principal component analysis (KPCA) and spatial methods. We use data from the Visible Infrared Imaging Radiometer Suite (VIIRS) between 2012 and 2016. Results show that the upstream centre of gravity of oil and gas exploitation and processing in China moved to the southwest and the downstream centre of gravity moved to the southeast. Results of Kernel clustering-KPCA show that production, processing and transportation of oil and gas production moved from inland areas to coastal ports. Results from spatial analysis show existence of the influence of inter-regional externalities on the development of oil and gas exploitation and processing. The new economic geography theory provides a theoretical framework to explain the spatial evolution of oil and gas exploration and processing. Empirical findings of the changing path of the oil and gas exploitation and processing centres of gravity and the kernel clustering-KPCA analysis provide a scientific basis for tracking the effectiveness of government environmental policy and for policymaking on mitigation of combustion gases. This novel application extends the utilisation of the VIIRS and can be applied globally for tracking dynamic changes in the centre of gravity of oil and gas exploration and processing.

Does transportation infrastructure accelerate factor outflow from shrinking cities? An evidence from China

Shrinking cities have received increasing attention in recent years given that the emergence of these cities has raised concerns about social equity, stability and sustainability. While extensive studies have attempted to measure the structural changes from a demographic perspective, it remains unclear to what extent the development of transportation infrastructure may have influenced the formation of shrinking cities, especially considering a multi-dimensional structural change. This study fills this research gap by conducting a comprehensive impact assessment of transportation infrastructure on the development of shrinking cities in China, considering demographic, economic, and social changes. Based on the New Economic Geography theory, a novel multi-dimensional shrinking index system was developed and the characteristics of spatial distributions of different types of shrinking cities were analyzed using the GIS analysis. In particular, the impacts of two primary surface transportation modes (roadway and high-speed rail) on shrinking cities' performance were examined using a two-stage least-square model and a Difference-in-Difference model. The results confirm that both the development of roadway and high-speed rail systems have exacerbated the loss of critical factors, such as permanent population, in most shrinking cities, although the degree of impact varies by the different modes and dimensions of shrinkage. Specifically, transportation infrastructure mainly intensifies the losses of economic and social factors in shrinking cities, while the impact on demographic loss is negligible. The research findings suggest that future infrastructure investment and the strategies for urban governance should be implemented more selectively based on the different types of shrinking cities to achieve more sustainable and resilient urban development.

The regional implications of just transition in the world's most coal-dependent economy: The case of Mpumalanga, South Africa

IntroductionSouth Africa has had an extraordinarily heavy reliance on coal to fuel its economy, and it is one of the highest carbon dioxide emitters per capita globally. Current moves aligned with COP26 and recently announced Western support for a Just Transition Partnership to support decarbonisation in South Africa and replace coal fired power stations with renewables are to be welcomed. That said, the majority of South Africa's coal mines, thermal power stations and the currently important coal export industry are located in Mpumalanga's Coal-Belt, an area which has and will continue to experience significant social and economic trauma as mines close and workers needs to be reskilled. There are currently over 100,000 workers in the coal and related industries in this region.MethodsThis paper draws on international and South African evidence of the effects and responses to mine closure, regional resilience theory and evolutionary economic geography theory to analyse the implications and prospects for economic renewal as the coal industry winds down. Evidence is sourced form secondary material including government and industry policy statements and media articles, while primary material was sourced from key informant interviews.ResultsTransitioning this region of South Africa from its virtual mono-economy based on coal presents challenges which this paper highlights. While support from international sources to help make this transition into renewables will be of considerable benefit, significant challenges need to be addressed to ensure that difficulties are overcome, and the risks of the resource curse experienced in many developing countries are minimized.DiscussionProcesses may need to be put in place to ensure that the ambitious goal of transitioning from coal to renewables can be achieved, finances and management well-targeted, and a sense of security given to outside investors to help fund the transition, but also broader economic diversification. In parallel to ensure the “transition is just” mechanisms also need to be put in place, by the state and the investors, to ensure that those citizens unable to transition are empowered and engaged in their community to stem the risk of the inevitable frustration and social disturbance that exclusion from the economy and living with declining services creates. Whom should be putting these processes into place also needs consideration given that existing organizations are already struggling. Though not an easy task, it is hoped that this paper sheds some light on the various issues and encourages consideration of the ways to address them.

ПРИГРАНИЧНЫЕ РЕГИОНЫ В УСЛОВИЯХ ИНТЕГРАЦИИ: ТЕОРЕТИЧЕСКИЕ ОЦЕНКИ И ПРАКТИЧЕСКИЕ РЕЗУЛЬТАТЫ

The study of the dynamics of interstate interactions during globalization and regionalization of the world economy enabled to accumulate a significant amount of theoretical and empirical results, which can be used to assess the impact of cross-border trade cooperation on regional economic development. A particular interest is using different approaches and methods for the analysis of the development of border regions in the context of integration. The author compares the dynamics of some border regions of the Union State of Russia and Belarus, the EU and a number of other states involved in the integration processes. He attempts to summarize the most significant conclusions of Russian and foreign scholars studying the impact of interstate integration on the socio-economic situation of border regions. He notes that certain opportunities for assessing the impact of a region’s border position on its development are provided by the new theory of trade and new economic geography. The study has shown that the impact of integration on the development of border regions differs a lot. It depends on various goals and motives behind the convergence of independent states, as well as on unique institutional factors of border areas.