Integrating Economic Base Theory with Regional Adjustment Models: The Nonmetropolitan Rocky Mountain West

ABSTRACT Interest in the use of adjustment models has recently increased as analysts have come to see the value of these models in the study of regional growth processes. Adjustment models are especially useful in clarifying the nature and direction of population-employment interactions. However, other models of regional growth suggest that employment should not be treated as a single homogeneous variable, as is the usual assumption in regional adjustment models. This paper looks at the issue of employment disaggregation, and suggests that adjustment models can be alternatively specified by making use of economic base theory to separate employment into at least two broad sectors. Alternative economic base specifications are tested using data for the nonmetropolitan counties (n=254) of the US. Rocky Mountain West during a recent time period. The results show that an economic base version of the adjustment model provides insights to regional change that are not available from the traditional version of the model.     

Why Is U.S. Poverty Higher in Nonmetropolitan than in Metropolitan Areas?

ABSTRACT In the U.S., people are more likely to be poor if they live in a nonmetropolitan (nonmetro) than in a metropolitan (metro) area. A common explanation for this phenomenon is that nonmetro places offer relatively few economic and social opportunities. This article explores another plausible explanation, asking if the disproportionate poverty in nonmetro areas partly reflects attitudes of people with personal attributes related to poverty: they may be attracted to nonmetro places or otherwise reluctant (or unable) to leave them. To test this hypothesis, data from nine waves of the Panel Study of Income Dynamics (PSID) are used to track economic well‐being and nonmetro–metro residential choice among a sample of 2,007 low‐income householders. A series of multivariate regression models are estimated in which the dependent variable is a householder's income to need (adjusted for spatial cost‐of‐housing differences), and regressors are individual attributes, a binary variable for nonmetro residence, and state fixed‐effects. Regression results show that controlling for householder educational attainment reduces the negative association between nonmetro residence and income to need; but controlling for unobserved, time‐invariant heterogeneity via individual fixed‐effects increases the magnitude of this negative association. Study findings thus appear to indicate that enduring nonmetro poverty is explained both by a sorting of low human capital individuals into nonmetro areas and by reduced economic opportunities in nonmetro compared to metro places.     

Emerging Global Logistics Networks: Implications for Transport Systems and Policies

ABSTRACT Logistics chains are constantly changing to facilitate increasingly global movements. In qualitative terms, long term trends in logistics services indicate a growing degree of product customization and an increased responsiveness in order delivery. These trends impact on the development of technology and the growth of welfare in different world regions in different ways. This paper drafts a research agenda which will help to improve understanding of the interrelationships between trade, logistics, transport, and regional development at a global scale. Rather than being an exhaustive or detailed inventory of trends, the paper provides a focus on “supply chain by thinking.” The key starting point is the need for more and more efficient transportation and sophisticated logistics processes. Three subjects are treated: First, the strategic implications of borderless supply chain management on the choice of alternative logistics structures in supply chains are considered; second, the possible impacts of the expected changes in supply chain processes upon regional economic activities are examined; third, the impacts of changes in global logistic processes on the transportation system and, in turn, on the environment are explored. This discussion leads to the identification of some new research challenges in the field of transportation and logistics.     

Regional Innovation Clusters: A Critical Review

In this paper, we present a critical assessment of recent economic development policy directions centered on the concept of regional innovation clusters. We begin by investigating the rationale underlying the Obama administration's promotion of regional innovation clusters (RICs) and their introduction to the policy arena in its Strategy for American Innovation. The connections among RICs and existing research and policies in industry and occupational clusters, regional innovation systems and regional economic development are identified and analyzed to highlight those most critical challenges to conceptualizing and theorizing RICs. While we applaud the long overdue focus of economic development policies on sub‐national regions, we identify several major conceptual shortcomings and programmatic difficulties associated with RICs as a centerpiece for economic development strategies.     

Manufacturing Decline and Technology Lags in Nonmetropolitan Illinois

Numerous studies have focused on national and regional manufacturing decline in the U.S., but far less attention has been placed on decline in substate areas. This oversight is troublesome because manufacturing decline in substate areas, particularly in the Midwest, has been severe and prolonged. This paper, therefore, examines the causes of manufacturing decline at the substate level. Specifically, I evaluate whether the impact of factors influencing decline varies according to the size and location of medium- and small-sized cities in Illinois. Survey data and loglinear modeling methods are used for the empirical analysis. The results indicate that the impact of technology lags in substate areas varies significantly by the size of cities. The effects of technology, the regional shift of manufacturing, and federal trade policies are influenced by the relative location of cities.     

Small Business Development and Nonmetropolitan Job Growth in Georgia

To assess development potential of small business, this research examines the age and size characteristics of nonmetropolitan firms and the contribution of business ‘births,’‘deaths,’ expansions, and contractions to job growth. Analysis of data derived from the federal‐state unemployment insurance program in Georgia indicates that firms employing fewer than 100 workers account for 44.3 percent of private sector nonfarm employment in nonmetropolitan counties. Overall, the mix of small and large firms remained quite stable over the five year study period. The dynamics of job creation and loss differed dramatically by enterprise size and manufacturing/nonmanufacturing sector. Three segments of the business population contributed most to rural job growth: very small continuing firms, large manufacturing establishments, and non‐manufacturing businesses owned by large enterprises. The paper concludes with a discussion of economic development policies that may enable rural communities to capitalize on these business demographic trends.     

Innovation and Regional Growth in Mexico: 2000–2010

This paper looks at the factors driving regional growth in Mexico, paying special attention to the potentially growth‐enhancing role of innovation and innovation policy. The analysis combines innovation variables with indicators linked to the formation of adequate social conditions for innovation (the social filter), and spillovers for 31 Mexican states and the Mexico City capital district (the Distrito Federal) during the period 2000–2010. The results indicate that regional economic growth across Mexican states stems from direct investment in research and development (R&D) in areas with favorable social filters and which can benefit not only from knowledge spillovers, but also from being surrounded by rich neighbors with good social conditions. The results stress that, although Mexican innovation policy has been relatively well targeted in order to generate greater economic growth, its relatively modest size may have undermined the attainment of its main objectives.     

Spatial and Temporal Metropolitan and Nonmetropolitan Trends in Income Inequality

ABSTRACT Overall total inequality for state per capita personal income as well as total inequality for nonmetropolitan and metropolitan areas are examined for the period 1969 to 1995. In each case, the total inequality was partitioned into between-and within-region variations. Statistical testing shows no perceptible differences between the major categories, nonmetropolitan and metropolitan. Further, this study uses a model to test for narrowing of income gaps within these categories. It was found that for both nonmetropolitan and metropolitan, a general trend toward equality was evidenced during the early 1970s decade. In that decade, the nonmetropolitan areas’incomes approached the metropolitan areas’incomes but showed significant divergences in the 1980s, followed again by a narrowing of the gaps in the 1990s.     

Global Chain,Local Pain: Regional Implications of Global Distribution Networks in the German North Range

ABSTRACT As a consequence of global production networks (GPNs), the associated network of freight distribution has gained increasing significance. Whereas the volume of freight transport is expected to increase further, the supply of infrastructure for the movement and handling of consignments appears limited. Particularly at the interfaces, infrastructure capacity for coping with rising throughput is extremely scarce. Any attempt to widen bottlenecks seems to be risky because it happens at some cost and in a contested political and urban environment. This problem will be discussed in the case of the German North Range, with the Port of Hamburg as the traditional gateway and main port, and a scattered system of secondary interfaces and supporting logistics areas. Local constraints, port competition, and the network logic of global distribution systems are challenging the former monopoly of the port, as are plans for establishing a new deep‐sea port at Wilhelmshaven, 150 km west of Hamburg. At the same time, the traditional policy approach of adapting to the needs of the distribution system is coming to an end, owing to fiscal limits, infrastructure constraints, and the generic logic of the global supply chain. In accordance with the emerging global division of labor, various actors and institutions are involved in the management of the chain, with very different powers and interests. Under these circumstances, the attempt to ensure the main port's position by infrastructure expansion is becoming open to question. This could also be a starting point for rethinking how local and regional places could better respond to the new imperative of logistics and distribution. In this respect, it is the network paradigm that could lead the way to a more balanced, cooperative and competitive regional distribution system.     

Innovation Ideas and Regional Characteristics: Product Innovations and Export Entrepreneurship by Firms in Swedish Regions

ABSTRACT This paper focuses upon the ways in which characteristics of regions in regards to knowledge sources, communication opportunities, and absorptive capacity influence the development of innovation ideas among existing and potential entrepreneurs. We formulate a model where entrepreneurs or innovating firms introduce new products in a quasi‐temporal setting. Market conditions are characterised by monopolistic competition between varieties belonging to the same product group, in which there is entry and exit of varieties. A stochastic process is assumed to generate new innovation ideas as time goes by, and a firm (entrepreneur) who receives such an idea has to transform the idea to an innovation, which in the model is specified as a particular variety combined with a specific destination market. The theoretical model is used as a reference when formulating two regression models, with which we estimate how a set of regional characteristics are associated with the likelihood of innovation ideas across Swedish local labour market regions. In one model, we examine the emergence of new export varieties, and in the second model, we investigate the appearance of new export firms. Results are consistent with the assumption that knowledge and information flows have a positive influence on the frequency of arrival of innovation ideas to firms.