Agglomeration and the effects of regional transfer schemes [Elektronische Ressource] / vorgelegt von Maximilian von Ehrlich-Treuenstätt

Maximilian Von Ehrlich-Treuenstätt

Informations

• Publié par: ludwig-maximilians-universitat_munchen
• Publié le: 01 janvier 2009
• Nombre de lectures: 40
• Langue: English
• Poids de l'ouvrage: 8 Mo

Extrait

Agglomeration and the Effects
of Regional Transfer Schemes
Inaugural-Dissertation
zur Erlangung des Grades
Doctor oeconomiae publicae (Dr. oec. publ.)
an der Ludwig-Maximilians-Universit at Munc hen
2009
vorgelegt von
Maximilian von Ehrlich-Treuenst att
Referent: Prof. Dr. Dr. h.c. Hans-Werner Sinn
Korreferent: Prof. Dr. Robert Fenge
Datum der mundlic hen Prufung: 22. Januar 2010
Promotionsabschlussberatung: 10. Februar 2010Acknowledgements
First and foremost I would like to thank my supervisors Hans-Werner Sinn and Robert Fenge
for giving me the opportunity to pursue this dissertation. Hans-Werner Sinn not only pro-
vided me with guidance and an inspiring environment at the Center for Economic Studies
(CES) but initiated my interest in economics and shaped my way of economic thinking.
Robert Fenge encouraged me to study issues in regional economics and provided me with
continuous support and advice. Our joint projects gave me the opportunity to learn a lot
from his experience and knowledge.
I am also very grateful to Sascha Becker and Peter Egger who substantially improved my
econometric knowledge and introduced me to the latest stata techniques. Of course I want
to thank my colleagues and friends at CES, at the department of economics, and at the
Ifo Institute with whom I shared a great time. Their comments and advices at numerous
seminars contributed strongly to this thesis. Moreover, I bene ted from many visitors at the
CES of whom I want to mention Harald Badinger, representatively.
During my doctoral studies I received support from the German Research Foundation (DFG)
within its priority program "Institutionelle Gestaltung F oderaler Systeme" which I appreci-
ated a lot. Various conference and workshops of the DFG program stimulated my work.
Among the members of the DFG program I want to thank particularly Matthias Wrede,
Wolfgang Eggert and Gun ther K onig.
Last but not least I want to thank Tanja and my family for their patience and continuous
support as well as for helpful proofreading. I owe my largest debt to my parents, to whom I
dedicate this thesis.
Maximilian von Ehrlich-Treuenst att
Munich, September 2009Contents
1 Introduction 1
2 Theories of Economic Geography 13
2.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Location Theories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Central Place Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.4 Micro-Foundations of Agglomeration . . . . . . . . . . . . . . . . . . . 28
2.4.1 New Economic Geography . . . . . . . . . . . . . . . . . . . . . 29
2.4.2 Knowledge Spillovers . . . . . . . . . . . . . . . . . . . . . . . . 39
2.4.3 Labor Market Pooling . . . . . . . . . . . . . . . . . . . . . . . 44
2.5 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
3 Public Input Competition and Agglomeration 57
3.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
3.2 The Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
3.2.1 Short-Run Returns . . . . . . . . . . . . . . . . . . . . . . . . . 66
3.2.2 Long-Run Equilibrium . . . . . . . . . . . . . . . . . . . . . . . 67Contents iii
3.3 Decentralization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
3.3.1 Infrastructure and Price Index . . . . . . . . . . . . . . . . . . . 70
3.3.2 Fiscal Competition Equilibria . . . . . . . . . . . . . . . . . . . 72
3.4 Centralization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
3.5 Extensions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
3.5.1 Asymmetric Regions . . . . . . . . . . . . . . . . . . . . . . . . 79
3.5.2 Congestion Costs . . . . . . . . . . . . . . . . . . . . . . . . . . 79
3.6 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
4 Infrastructure and the Location of Business 93
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
4.2 Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
4.3 The Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
4.4 Empirical Evidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
4.4.1 Empirical Speci cation . . . . . . . . . . . . . . . . . . . . . . . 104
4.4.2 Data and Descriptive Statistics . . . . . . . . . . . . . . . . . . 107
4.4.3 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
4.4.4 Sensitivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
4.5 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
5 The E ects of EU Structural Funds on Regional Performance 121
5.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121Contents iv
5.2 E ects of the Structural Funds Program:
State of the Debate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
5.3 Data and Descriptive Statistics . . . . . . . . . . . . . . . . . . . . . . 128
5.3.1 Data Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
5.3.2 Descriptive Statistics . . . . . . . . . . . . . . . . . . . . . . . . 129
5.4 Regression Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
5.4.1 The Regression-Discontinuity Design (RDD) . . . . . . . . . . . 137
5.5 Sensitivity Checks, Evaluation, and Extensions . . . . . . . . . . . . . . 142
5.6 Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
6 Summary and Policy Implications 155
Bibliography 168List of Figures
1.1 Regional Disparities in the EU (NUTS2) . . . . . . . . . . . . . 3
1.2 Population Development in the EU (NUTS2) . . . . . . . . . . 4
1.3 Regional Disparities in Germany (NUTS2) . . . . . . . . . . . . 5
1.4 Population Development in Germany (NUTS2) . . . . . . . . . 6
1.5 Regional Disparities in Germany (NUTS3) . . . . . . . . . . . . 7
2.1 Weber’s Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2 The Hotelling Model . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.3 The Spatial Demand Curve . . . . . . . . . . . . . . . . . . . . . . 21
2.4 Market Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.5 Christaller’s System of Central Places . . . . . . . . . . . . . 25
2.6 Losch’s System of Central Places . . . . . . . . . . . . . . . . . 26
2.7 The Core-Periphery Model - Stability of Equilibria . . . . . 33
2.8 Agglomeration and Trade Freeness . . . . . . . . . . . . . . . . 34
2.9 Ation and Elasticity of Substitution . . . . . . . . 36
2.10 Agglomeration and Expenditure Share . . . . . . . . . . . . . . 37
2.11 The Distance between Central Places . . . . . . . . . . . . . . 38
2.12 Agglomeration and Knowledge Spillovers . . . . . . . . . . . 43Contents vii
2.13 Agglomeration and Firm Specific Shocks . . . . . . . . . . . . 49
3.1 Bifurcation diagram . . . . . . . . . . . . . . . . . . . . . . . . . . 68
3.2 Interior Nash equilibrium at low trade freeness . . . . . . . 74
3.3 Non-existence of Nash equilibrium at medium trade freeness 75
3.4 Corner Nash equilibria at high trade freeness . . . . . . . . 76
3.5 Reaction functions and Welfare at low trade freeness . . 88
3.6 Reaction functions and Welfare at medium trade freeness 89
3.7 Reaction functions and Welfare at high trade freeness . . 90
3.8 Non existence of a Nash equilibrium . . . . . . . . . . . . . . . 91
4.1 Regional Distribution of the Manufacturing Sector EU15 94
4.2 Regional of the Service Sector EU15 . . . . . . 95
4.3 Expenditure Weighted Accessibility . . . . . . . . . . . . . . . 109
4.4 Change in Accessibility . . . . . . . . . . . . . . . . . . . . . . . . 110
5.1 Objective 1 regions . . . . . . . . . . . . . . . . . . . . . . . . . . 124
5.2 1 status and the 75% GDP threshold . . . . . . . . 133
5.3 Growth and the 75% GDP threshold . . . . . . . . . . . . . . . 135
5.4 Regions changing Objective 1 status . . . . . . . . . . . . . . . 144
5.5 Dose-response estimates of Objective 1 transfers . . . . . . 152