Spatial inequality, globalization, and footloose capital

Takahashi, Toshiaki; Takatsuka, Hajime; Zeng, Dao‐Zhi

doi:10.1007/s00199-011-0686-7

Cited by 54 publications

(51 citation statements)

References 30 publications

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“…It is argued that regional size affects the spatial configuration of economic activities, a phenomenon also known as HME. Within a theoretical framework based on Takahashi et al (2013), the definition of HME is unpacked in our paper and is interpreted in terms of the wages in a larger region being higher than in a smaller one. It is noteworthy that this magnification also closely relates to the discrepancies in transport costs and relative wages between the larger and small regions, which evolve in a non-monotonic pattern when transport costs decline.…”

Section: Resultsmentioning

confidence: 99%

“…We derive our estimating equation following Takahashi et al (2013). The spatial economy consists of two regions η = i, j, which have the same conditions except for their population size.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

“…Obviating this problem, when the economy is assumed to have one sector, wages will differ between regions. It is worth mentioning that even with a CES utility, Takahashi et al (2013) demonstrate the equivalence of a spatial disparity in firm share and in wages by revisiting the HME with the assumption of only one manufacturing sector. Moreover, it can be shown that these spatial inequalities are closely related to transport costs.…”

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confidence: 99%

“…However, this non-monotonic magnification effect is seldom investigated in the empirics of spatial economics. Based on the two-region scenario, Zeng and Uchikawa (2014) generalize the results of Takahashi et al (2013) into an economic space of multiple regions. Even in multiple regions, wages inequality between any two regions also forms a non-monotonic curve in regions which are more integrated.…”

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confidence: 99%

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Home market effect, spatial wages disparity: an empirical reinvestigation of China

Wang

2015

Ann Reg Sci

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It is argued that the size of a region affects the spatial configuration of economic activities, known as the home market effect (HME). Concerning the definition of HME, it can be interpreted from different aspects, but most empirical studies testing HME focus mainly on investigating firm share and exports. This paper empirically investigates the HME in terms of wages in the case of China by using panel data for the period 1980-2012. We find that the wages in coastal regions are higher than those in the interior, due to the size differences between regions. Additionally, regional inequality in wages between the coastal and interior regions evolves in an inverted U-shaped curve during periods of regional integration. The evolution of the space-economy in China during the past three decades supports the inverted U-shaped pattern predicted by the theoretical models of spatial economics. JEL Classification R12 · F1

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Section: Resultsmentioning

confidence: 99%

“…We derive our estimating equation following Takahashi et al (2013). The spatial economy consists of two regions η = i, j, which have the same conditions except for their population size.…”

Section: Theoretical Frameworkmentioning

confidence: 99%

mentioning

confidence: 99%

mentioning

confidence: 99%

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Home market effect, spatial wages disparity: an empirical reinvestigation of China

Wang

2015

Ann Reg Sci

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“…In such a context, firms are induced to relocate their activities to the South when the lower wages in the South more than offset the lower demand. Takahashi et al (2013) have shown that the equilibrium wage in the North is greater than the equilibrium wage in the South. Furthermore, the HME still holds.…”

Section: Wages and Market Sizementioning

confidence: 96%

Regional Disparities and Efficient Transport Policies

Proost

Thisse²

2017

Economics Without Borders

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This chapter addresses the economics of regional disparities and transport policies in the European Union, offering an explanation for the uneven development of regions. We show that recent developments in spatial economics highlight the fact that trade is costly and location still matters. Since the drop in transport costs and the emergence of a knowledge-based economy, the proximity to natural resources has been replaced by new drivers of regional growth that rely on human capital and cognitive skills. Regions with a high market potentialthose where demand is high and transport costs low -are likely to attract more firms and pay higher wages, which leads to sizable and lasting regional disparities. As a consequence, investments in interregional transport policies may not deliver their expected effects. In addition, new information and communication devices foster the fragmentation of the supply chain and the decentralization of activities.

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Globalization and Inequality: The Facts

Hellier

2023

Economic Studies in Inequality, Social Exclusion and Well-Being

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Spatial inequality, globalization, and footloose capital

Cited by 54 publications

References 30 publications

Home market effect, spatial wages disparity: an empirical reinvestigation of China

Home market effect, spatial wages disparity: an empirical reinvestigation of China

Regional Disparities and Efficient Transport Policies

Globalization and Inequality: The Facts

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