Working Paper #05.19 now available

By Tobias Ebert, Jochen E. Gebauer, Thomas Brenner, Wiebke Bleidorn,
Samuel D. Gosling, Jeff Potter and P. Jason Rentfrow.

The Working Paper #05.19 “Are Regional Differences in Personality and their
Correlates robust? Applying Spatial Analysis Techniques to Examine Regional Variation in Personality across the U.S. and Germany” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

There is growing evidence that personality traits are spatially clustered across geographic regions and that regionally aggregated personality scores are related to political, economic, social, and health outcomes. However, much of the evidence comes from research that has relied on methods that are ill-suited for working with spatial data. Consequently, the validity and generalizability of that work is unclear. The present work addresses two main challenges of working with spatial data (i.e., Modifiable Aerial Unit Problem and spatial dependencies) and evaluates data-analytic techniques designed to tackle those challenges. Using analytic techniques designed for spatial data, we offer a practical guideline for working with spatial data in psychological research. Specifically, we investigate the robustness of regional personality differences and their correlates within the U.S. (Study 1: N = 3,387,303) and Germany (Study 2: N = 110,029). To account for the Modifiable Aerial Unit Problem, we apply a mapping approach that visualizes distributional patterns without aggregating to a higher level and examine the correlates of regional personality scores across multiple levels of spatial aggregation. To account for spatial dependencies, we examine the correlates of regional personality scores using spatial econometric models. Overall, our results suggest that regional personality differences are robust and can be reliably studied across countries and spatial levels. At the same time, the results also show that ignoring the methodological challenges of spatial data can have serious consequences for research concerned with regional personality differences.

 

Working Paper #04.19 now available

By Anne Margarian and Christian Hundt.

The Working Paper #04.19 “Location, industry structure and (the lack of) locally specific knowledge: On the diverging development of rural areas in Germany’s East and West” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

Some rural regions in Western Germany have experienced a very positive economic development in terms of employment and incomes in the past decade. This development, however, is in sharp contrast to the the enduring economic lag of many rural regions in Eastern Germany. This paper seeks to find out, to what extent these differences in employment development can be explained by sectoral patterns and region-specific capacities and capabilities.

We employ an extended shift-share regression model that explains the employment development in German districts between 2007 and 2016. The model differentiates between Western and Eastern German regions as well as between urban and rural regions by means of spatial location effects. This specification helps us to capture both: the historically evolved differences inherent in the socialist and capitalist past of Eastern and Western Germany and the varying economic environments in urban and rural areas. The extended shift-share regression confirms that simple industry effects, i.e. linear effects of industry shares, only explain a small part of the differences in employment development between rural regions. Most deviations are instead captured in the competitive share effects (CSE) that represents how employment development in a region systematically deviates from the average development of its industries at national level.

Further analyses of the CSE reveal that the manufacturing sector, despite its general loss in employment shares, is of crucial importance for rural prosperity. In this regard, the apparent disadvantage of rural districts in Germany’s East can be explained by a lack of locally specific, complementary immobile production capacities and capabilities for manufacturing. These locally specific skills develop endogenously. Urban districts in the East, in contrast, do not have to rely on endogenous factors alone but may overcome their historical disadvantage if they manage to exploit their agglomeration advantages in order to attract knowledge intensive industries and highskilled workers.

Working Paper #03.19 now available

By Jonathan Eberle and Philipp Boeing.

The Working Paper #03.19 “Effects of R&D subsidies on regional economic dynamics: Evidence from Chinese provinces” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

We investigate the impact of research and development (R&D) subsidies on R&D inputs of large- and medium-sized firms and on additional innovation and economic activities in Chinese provinces. A panel vector autoregressive (VAR) model and corresponding impulse response function (IRF) analysis allow us to differentiate between direct and indirect effects, which add up to total effects. We find that an increase of R&D subsidies significantly decreases private R&D investments, although there is a significant positive effect on the R&D personnel employed in firms. We interpret these findings as a partial crowding-out effect because public funds substitute some private funds while total R&D inputs still increase. Complementarily, we find a positive secondary effect on the provincial patent activity, our measure of technological progress. Interestingly, we also find potentially unintended effects of R&D subsidies on increases in the investment rate in physical capital and residential buildings. Although R&D subsidies fail to incentivize private R&D expenditures, firms increase total R&D inputs, and provincial economies benefit from secondary effects on technological progress and capital deepening.

Working Paper #02.19 now available

By Sven Wardenburg and Thomas Brenner.

The Working Paper #02.19 “The impact of place-based policies on perceived regional living conditions across German labor market regions. Examining the impacts on migration flows.” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

The paper analyzes the impact of the two major German regional development and redistribution policies, the municipal fiscal equalization scheme and the economic funds GRW, on perceived regional living conditions, measured through interregional migration between German labor market regions. Using a spatial vector-autoregressive panel model (SpVar), we find evidence that equalization transfers have a significant positive impact on perceived living conditions and contribute to the aim of regional equity. These effects are especially found for regions with low endogenous fiscal capacities. GRW funding reveals no significant effects on net migration rates in total, but short-term effects in rural regions.

Working Paper #01.19 now available

By Jonathan Eberle.

The Working Paper #01.19 “Regional fiscal equalization in Germany – A simultaneous equation approach to assess the economic effects of fiscal policy” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

Regional fiscal equalization in Germany aims to reduce fiscal disparities by allocating financial resources to less promising regions in order to support the supply of public goods. This paper aims to analyse secondary economic effects of regional fiscal equalization on several economic in- and output variables. Additionally, the paper examines the potential regional characteristics to influence the transformation of fiscal inputs into economic outcomes. Lastly, I compare the effects of fiscal equalization to these of the major German structural funding program GRW. My findings reveal a significant positive effect of fiscal equalization on the regional employment rate. Moreover, the findings suggest different transmission channels of fiscal equalization in East and West Germany. Particularly, I find higher effects in right-wing CDU/CSU preferring regions on the employment, human capital and private-sector investment rate. Finally, while structural funding affects more economic variables significantly, the magnitude of the estimated economic responses of fiscal equalization compared to these of German structural funding are not statistically different.

Working Paper #03.18 now available

By Jonathan Eberle, Thomas Brenner and Timo Mitze.

The Working Paper #03.18 “Absorptive capacity, economic freedom and the conditional effects of regional policy” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

This paper analyzes the role played by regional conditioning factors, namely absorptive capacity and economic freedom, for the working of regional policy in Germany. We construct synthetic composite indicators to measure differences in these factors across German regions and stratify regions by their respective values. We then identify the subsample-specific transmission channels of regional policies in a spatial panel vector-autoregressive (VAR) framework and compare the direction and magnitude of effects by impulse-response function analysis and ex-post t-tests. The results point to two main channels of policy impact: While regions with low levels of absorptive capacity and economic freedom bene-fit from public funding only in terms of a traditional funding channel (i.e. higher investment rates and partly increased human capital levels), the link between regional policy, GDP and technology growth is very weak for these regions. In comparison, our findings hint at significant positive effects on regional GDP per workforce and patent activity for regions with a high absorptive capacity and economic freedom (i.e. a knowledge-based funding channel). This underlines the role of regional conditions for the direction and magnitude of funding effects and should be considered by policy makers as a means to trigger policy effectiveness in times of stagnating or decreasing funding volumes.

Working Paper #02.18 now available

By Linus Holtermann and Christian Hundt

The Working Paper #02.18 “Hierarchically structured determinants and phase- related patterns of economic resilience – An empirical case study for European regions” is now online and available here  for reading and downloading. An overview of all Working Papers yet published in this blog is provided via the button “Working Papers” in the menu above.

Abstract

Our paper seeks to provide empirical evidence for a spatial-temporal system of (short-term) regional resilience determinants. Based on groundwork from Martin (2012) and Martin and Sunley (2015), we employ a nested hierarchy of regional and national determinants to constitute the spatial dimension, while we model the temporal dimension through a resistance and a recovery phase. Utilising hierarchical panel data models for a sample of 22 European countries, we can confirm the presence of a spatial-temporal system as we find significant determinants at both spatial levels that are connected via cross-level interactions and reveal varying, if not opposing directions of influences across the sensitivity and recovery phase.