Eckhardt Bode

Evaluating the Markov Property in Studies of Economic Convergence

Markov chain theory, which has frequently been applied to analyze income convergence, imposes restrictive assumptions on the data-generating process. In most empirical studies, it is taken for granted that per capita income follows a stationary first-order Markov process. To examine the reliability of estimated Markov transition matrices, the authors propose Pearson X2 and likelihood ratio tests of the Markov property, spatial independence, and homogeneity over time and space. As an illustration, it is shown that per capita income in the forty-eight contiguous U.S. states did clearly not follow a common stationary first-order Markov process from 1929 to 2000.

Disproportionality Measures of Concentration, Specialization, and Localization

This article extends the methodological toolbox of measures of regional concentration of industries and industrial specialization of regions. It first defines disproportionality measures of concentration and specialization and proposes a taxonomy of these measures. This taxonomy is based on three characteristic features of any disproportionality measure. It helps researchers define the measure that fits their research purpose and data best. The article then generalizes this taxonomy to cover disproportionality measures of economic localization that evaluate specialization and concentration simultaneously and spatial disproportionality measures that deal with the checkerboard problem and the modifiable areal unit problem.

Spatial effects of foreign direct investment in US states

This paper estimates the aggregate productivity effects of Marshallian externalities generated by foreign direct investment (FDI) in US states, controlling for Marshallian externalities and other spatial spillovers generated by domestic firms. A regional production function framework models externalities and other spatial spillovers explicitly as determinants of total factor productivity. We employ a system generalized method of moments (GMM) estimator to account for the potential endogeneity of FDI and the presence of spatial lags. Using data for US states from 1977–2003, the results indicate that FDI generates positive externalities, while externalities from domestic firms are negative. (Ce memoire evalue les effets agreges de productivite des effets externes marshalliens engendres par l’investissement direct en provenance de l’etranger dans les etats americains, en normalisant pour tenir compte des effets externes marshalliens et autres effets de retombee au plan spatial des firmes domestiques. A l’aide d’un cadre de fonction de production regionale, on modelise les effets externes et autres effets de retombee spatiaux explicitement en tant que determinants de la productivite totale des facteurs. On utilise la methode generalisee des moments (MGM) comme estimateur pour prendre en compte l’endogeneite potentielle de l’investissement direct en provenance de l’etranger et la presence de delais spatiaux. En utilisant les donnees americaines de 1977 a 2003, on constate que l’investissement direct en provenance de l’etranger produit des effets externes positifs alors que les effets externes des firmes domestiques sont negatifs.)

DELINEATING METROPOLITAN AREAS USING LAND PRICES

This paper proposes an approach to delineating metropolitan areas that is more general than the standard approaches in three respects: First, it uses the fraction of land prices attributable to economies of urban agglomeration instead of using commuting intensities as an indicator of economic integration between metropolitan centers and their hinterlands. Second, it identifies metropolitan centers endogenously instead of determining them exogenously. And third, it takes metropolitan sub-centers explicitly into account. An empirical illustration is used to show that the approach tends to delineate fewer but larger metropolitan areas in densely populated regions, and smaller metropolitan areas in sparsely populated regions.

Spatial Effects of Foreign Direct Investment in US States (Effets Spatiaux De L’Investissement Direct En Provenance De L’Étranger Dans Les États Américains)

This paper estimates the aggregate productivity effects of Marshallian externalities generated by foreign direct investment (FDI) in US states, controlling for Marshallian externalities and other spatial spillovers generated by domestic firms. A regional production function framework models externalities and other spatial spillovers explicitly as determinants of total factor productivity. We employ a system generalized method of moments (GMM) estimator to account for the potential endogeneity of FDI and the presence of spatial lags. Using data for US states from 1977–2003, the results indicate that FDI generates positive externalities, while externalities from domestic firms are negative. (Ce memoire evalue les effets agreges de productivite des effets externes marshalliens engendres par l’investissement direct en provenance de l’etranger dans les etats americains, en normalisant pour tenir compte des effets externes marshalliens et autres effets de retombee au plan spatial des firmes domestiques. A l’aide d’un cadre de fonction de production regionale, on modelise les effets externes et autres effets de retombee spatiaux explicitement en tant que determinants de la productivite totale des facteurs. On utilise la methode generalisee des moments (MGM) comme estimateur pour prendre en compte l’endogeneite potentielle de l’investissement direct en provenance de l’etranger et la presence de delais spatiaux. En utilisant les donnees americaines de 1977 a 2003, on constate que l’investissement direct en provenance de l’etranger produit des effets externes positifs alors que les effets externes des firmes domestiques sont negatifs.)

Worker Personality: Another Skill Bias Beyond Education in the Digital Age

We present empirical evidence suggesting that technological progress in the digital age will be biased not only with respect to skills acquired through education but also with respect to noncognitive skills (personality). We measure the direction of technological change by estimated future digitalization probabilities of occupations, and noncognitive skills by the Big Five personality traits from several German worker surveys. Even though we control extensively for education and experience, we find that workers characterized by strong openness and emotional stability tend to be less susceptible to digitalization. Traditional indicators of human capital thus measure workers’ skill endowments only imperfectly.