Changing the economic landscape: The phenomenon of regional inversion in the US manufacturing sector

Regional inversion is the name given to the phenomenon whereby the traditional industrial areas of certain countries lose their weight in favor of what were formerly peripheral zones. Against this background our first objective is to offer a formal and rigorous definition of the concept of regional inversion from an econometric standpoint. To that end we relate such a process with the long-run concepts of convergence and catching-up. Secondly, we test this definition through the use of unit root statistics and apply these to demonstrate the presence of this phenomenon in some of the US two-digit SIC industries. Received: 4 December 2000 / Accepted: 20 August 2001 RID="*" ID="*" The authors would like to express their thanks to three anonymous referees for their helpful comments and observations on an earlier version of this article. Financial support from grants PB97-1028 and PB98-1614 of DGES is gratefully acknowledged.     

Integrated regional econometric+input-output modeling: Issues and opportunities

Recent research on integrated econometric+input-output modeling for regional economies is reviewed. The motivations for and the alternative methodological approaches to this type of analysis are examined. Particular attention is given to the issues arising from multiregional linkages and spatial effects in the implementation of these frameworks at the sub-national scale. The linkages between integrated modeling and spatial econometrics are outlined. Directions for future research on integrated econometric and input-output modeling are identified. Received: 20 January 1999 / Accepted: 26 June 1999     

Transition and unemployment in Central Europe: How redundant workers fare in regional labor markets

This study analyses whether redundant workers are stigmatized in regional labor markets, and if so, examines the severity of the effects. Stigmatization, possibly an outcome of statistical discrimination, is assumed to obtain whenever likelihoods of long-term unemployment are systematically elevated among otherwise equivalent individuals, due to involuntary job-loss. Such effects are considered during early transition in the Czech Republic, Slovak Republic and Poland, and within a modeling framework whereby current search duration (likelihood of long-term unemployment) and benefit receipt are jointly-determined. Although econometric estimates of long-term unemployment indicate significant and persistent stigmatization within the Slovak Republic and Poland; underlying causation apparently differs between countries. Received: 8 March, 2001 / Accepted: 19 December 2001 RID="*" ID"*"The authors wishes to thank the Luxembourg Employment Study (LES) for providing access to the five labor force surveys upon which this study is based, and is especially appreciative of assistance provided, on multiple occasions, by Elena Bardasi (former LES Coordinator). Appreciation is also extended to three anonymous referees for helpful comments and suggestions.     

North American economic integration and industrial pollution in the Great Lakes region

This paper provides an assessment of the impact of increased economic integration within North America on industrial pollution intensities within the Great Lake states of the United States. It utilizes a three-country, applied general equilibrium model of the North American economy, data from the World Bank's Industrial Pollution Projection System, and employment data from the US Bureau of Economic Analysis to simulate the industrial pollution impacts of North American trade liberalization within the Great Lakes region. The results reflect the liberalization of tariff and non-tariff barriers, their trade and production impacts, state-level shares in the production changes, and the resulting industrial effluent changes. Two trade liberalization experiments show that, in many cases, the Great Lake states account for a substantial portion of the total emission changes caused by North American economic integration. Of particular concern to the Great Lake states are the emissions of the base metals, transportation equipment, and petroleum sectors. Received: October 2001/Accepted: December 2001 This research was supported by the Office of the Great Lakes through the Michigan Great Lakes Protection Fund. We would like to thank Roger Stough and three referees for very helpful comments.     

Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method

The objective of this paper is to present an inequality decomposition method, the two-stage nested Theil decomposition method, which is an extension of the ordinary one-stage Theil decomposition method. The method is analogous to a two-stage nested design in the analysis of variance (ANOVA). It considers the three-level hierarchical structure of a country: region-province-district, and decomposes overall regional inequality, as measured by Theil indices based on district-level mean incomes, into three components: the between-region, between-province, and within-province inequality components. The within-province component is a weighted-average of within-province income inequalities for each province, while the between-province component is a weighted-average of between-province income inequalities within each region. The method uses a district as the underlying regional unit to measure regional income inequality, rather than a province, and thus can analyze the contribution of within-province inequalities as well as between-province and between-region inequalities to the overall regional income inequality in a coherent framework. This paper applies the two-stage nested Theil decomposition method to district-level income and population data in China and Indonesia and explores factors determining regional income inequality in China and Indonesia. Received: October 2000/Accepted: June 2002 The author is grateful to the Foundation of International Education (Kokusai Kyoiku Zaidan) and Japan Society for the Promotion of Science (Grant-in-Aid for Scientific Research No. 12630073) for their financial support, and to anonymous referees for helpful comments.     

Education, cost of living and regional wage inequality in Brazil

The objective of this article is to analyze wage inequality among the 10 largest metropolitan regions in Brazil in the 1990s. We assess the extent to which worker characteristics (education, age, gender, race, position in the family) and job characteristics (occupational position, sector, experience) can explain wage inequality. The analysis is made both with regional-nominal and with regional-real wage data. In the second case regional price indexes are used to control for differences in cost of living among regions. Wage differentials in Brazil were slightly lowered when control variables were introduced, but the leftover inequality remained high. The results indicate that cost of living levels do have a role in explaining wage inequality in Brazil, but even after controlling for this factor, the remaining regional differentials are still important. Received: 18 August 2000 / Accepted: 20 June 2001     

Demand for information and communication technology-based services and regional economic development

The relationship between the uptake of Information and Communication Technology-based services (ICT) and regional economic development is examined here; we address in particular the idea that ICT will promote regional economic convergence. We argue that ICT can generate contradictory trends of regional convergence and divergence and that, under conditions of non-regulated market supply, the effects leading to divergence can be dominant. The approach is based on the development of a regional demand model, which is the combination of two sub models, one dealing with the effects of network externalities and the other based on the concept of potential demand for ICT. The main conclusion is that less populous, more peripheral and poorer regions with weaker existing social and economic networking will encounter problems of insufficient demand. This in turn will delay the launch of new services and slow the rate of uptake. Negative dynamic effects of low ICT use on economic performance will generate a vicious circle of cumulative disadvantage. Received: 2 October 2000 / Accepted: 6 December 2001 RID="*" ID="*" Thanks are due to Miguel Jardim and Jo?o Marques for technical assistance with the graphics.     

The paradox of unequal regional investment and equal regional economic growth in China

China's policy on Special Economic Zones has attracted increasing flows of direct foreign investment to China. The investment has been very unequally distributed among China's 30 regions.  The article focuses on the regional economic growth as a result of the direct foreign investment in the region and its spillover effects on neighboring regions. The unequal distribution of direct foreign investment should in principle tend to enlarge the regional economic differences. The article, however, shows that this is not the result of the investment.  The empirical findings highlight the impact of direct foreign investment on the Chinese regional economies in transition. Received: November 2000/Accepted: August 2001     

Duality theory and cost function analysis in a regional context: the impact of public infrastructure capital in the Greek regions

The resurgent interest in the role of infrastructure on development, spurred by the work on Aschauer in the late eighties, has produced a voluminous research activity, both at national and regional levels. Even though the majority of this research is based on production function analysis, more recently has emerged the alternative analytical framework of duality theory and cost function analysis. The latter is utilised here, in an effort to investigate public capital's impact on manufacturing at the regional level (Greek prefectures). Public capital categories have been grouped to two major categories of `productive' and `social' infrastructure. The latter seems to play little role in reducing private costs, but the former appears to be an important cost reduction influence. It can also be demonstrated that infrastructure has a substitutional relationship with labour and intermediate inputs, and a complementary one with private capital. Received: November 1998/Accepted: August 2001     

Local competition in telecommunications in the United States: Supporting conditions, policies, and impacts

The telecommunications landscape is very different from the days of the national monopolies. Deregulation, coupled with technological change, has affected the types of telecommunications, the providers of service, and the availability of various service bundles. This paper looks at one dimension of the new landscape: the facility-based investment by new providers in metropolitan areas in the USA. New providers include those who target high-volume business customers as well as the more widespread wireless service. A data set comprising central office switches permits analysis of the location and the type service provision by the new telecommunications competitors in American cities. This research was supported in part by a TVA Rural Studies Competitive Research Contract. Earlier versions of this paper were presented at the State University of New York at Buffalo, at the 1999 Meeting of the Southern Regional Science Association, Richmond, Virginia, and at the International Workshop, `Entrepreneurship, ICT and Local Policy Initiatives: Comparative Analyses and Lessons,' Amsterdam, May, 2000. I am grateful for the helpful comments of Sean Gorman, Peter Rogerson, Roger Stough and Aleta Wilson.     

Impacts of the development of large cities on economic growth and income distribution in Korea: A multiregional CGE model

A multiregional Computable General Equilibrium (CGE) model of Korea is used to assess urban development strategy in terms of national economic growth and income distribution. We find that the dispersion of total investment expenditure to six large cities would be the best policy if the emphasis of national development were to be placed on economic growth, together with a reduction in regional income disparity. Conversely, a heavy concentration of investment expenditure in Seoul and Pusan would lead to an amelioration of inequality in the distribution of personal income, but it would be difficult to implement due to hostility towards a primarily city-oriented value system. Received: 6 September 1999 / Accepted: 10 January 2002 RID="*" ID="*" An earlier version of this article was presented at the 16th Pacific Regional Science Conference held in Seoul, Korea, July 12–16, 1999.     

Spatial markets and the potential for economic integration between Canadian and U.S. regions

The potential for further economic integration among Canadian and American regions is measured by comparing province-to-state trade with state-to-state trade, where the latter is used as a benchmark of integration. To accomplish this, an attraction constrained gravity model is derived from micro foundations and estimated. The analysis demonstrates that after controlling for variations in output, distance, wages, productivity, and localization economies, the border remains a significant barrier to trade, although much less than previous estimates of the border effect using internal Canadian trade as a benchmark. The model's results also indicate that the border's influence varies across sectors, and the influence appears to be, in part, related to the presence of tariff and non-tariff barriers. Received: 1 February 1999 / Accepted: 8 August 2000     

Pharmaceuticals, personal care products and endocrine-disrupting chemicals in U.S. surface and finished drinking waters: A proposed ranking system

This study developed a comprehensive ranking system, for the first time as per authors' knowledge, for prioritizing the monitoring of pharmaceuticals and personal care products and endocrine-disrupting chemicals (together termed as EOCs, hereafter; a total of 100 EOCs considered) in U.S. stream water/source water and finished drinking water (termed as “EOCRank,” hereafter). The EOCRank system was developed using a total of 4 criteria: (1) occurrence, (2) treatment in drinking water treatment plants, (3) ecological effects, and (4) health effects and characterized using 7 attributes: prevalence, frequency of detection, removal, bioaccumulation, ecotoxicity (for fish, daphnid, and algae aquatic indicator species), pregnancy effects, and health effects. The health effects attribute was characterized using 7 sub-attributes: carcinogenicity, mutagenicity, impairment of fertility, central nervous system acting, endocrine effects, immunotoxicity, and developmental effects. Rank scores of EOCs were calculated as summations of multiplications of importance weights and utility functions of multiple criteria and were arranged to highlight EOCs needing immediate attention. Two different ranking lists of EOCs were developed for U.S. finished drinking water and stream water/source water and observed to differ with each other, indicating the effect of water type on ranking of EOCs. A ranking list of priority EOCs, developed using a particular criterion, was observed to differ with that, developed using multiple criteria. Health effects and treatment criteria were observed to be important criteria influencing overall data gap rank scores and need further data collection. The generalized nature of the system could be customized for specific geographical locations (occurrence information and importance weights of different components). The developed database of the EOCRank system is available on: http://www.egr.msu.edu/~xagorara/research.html).