Cameron LaPoint, Shogo Sakabe, 08 November 2021

Growing spatial inequality has led policymakers to offer firms tax breaks to attract investment and jobs to economically peripheral regions. This column examines a place-based bonus depreciation scheme in Japan which granted high-tech manufacturers immediate cost deductions from their corporate income tax bill. The policy generated big gains in employment and investment in building construction and in machines at pre-existing production sites. This response was driven by firms which rely on costly but long-lived capital inputs like industrial machines. How firms react to spatially targeted tax incentives ultimately depends on their internal network and their composition of intermediate capital inputs. 

Raphaël Parchet, Frédéric Robert-Nicoud, 15 October 2021

The development of the Swiss highway network from 1960 to 2010 influenced the residential and job compositions of municipalities. The advent of an entrance/exit ramp within 10 km of a municipality caused a long-term 24% increase in the share of top-income taxpayers. The welfare gains of residents of connected municipalities relative to residents in non-connected municipalities range from only 2% for the low-income group to 12% for the top-income group. Highways also contributed to job and residential urban sprawl.

Yoshi Fujiwara, Hiroyasu Inoue, Takayuki Yamaguchi, Hideaki Aoyama, Takuma Tanaka, Kentaro Kikuchi, 09 August 2021

The way money flows among firms can tell us about their economic activities and responses to economic shocks such as the one caused by Covid-19. This column uses data on remittances in a regional bank in Japan to demonstrate how the three parts of the network structure of the flow of money – upstream, downstream, and circulation of flow – reflect characteristics of supplier-customer relationships. As well as helping with the prediction of occurrences following an economic shock, the findings also have implications for banks’ management of credit risk.

Yuhei Miyauchi, Kentaro Nakajima, Stephen Redding, 04 August 2021

Traditional theories emphasise production decisions and the commuting costs of workers in shaping the spatial concentration of economic activity in cities. However, much of urban travel is related to consumption of non-traded services, such as trips to restaurants, shopping centres, and cultural venues. This column looks at commuting and non-commuting trips within the Greater Tokyo metropolitan area to explore how consumption access can explain the observed spatial variation in economic activity. Access to consumption opportunities and to employment opportunities both matter; focusing solely on commuting trips provides a misleading picture of travel patterns.

Ana Paula Franco, Sebastian Galiani, Pablo Lavado, 29 July 2021

Historical institutions can have long-lasting effects on societies and economies. The Inca Road has been a linchpin of the colonial economy in the New World, but its impact on current development has not been studied in great depth. This column examines the impact of the road on today’s educational, development, and labour outcomes. Proximity to the Inca Road increased the average level of educational attainment and decreased stunting among children by 5%. It boosted average hourly wages by 20% and reduced informality by six percentage points. Moreover, these effects were around 40% greater among women.

Hans Koster, Takatoshi Tabuchi, Jacques-François Thisse, 09 May 2021

Modern transportation infrastructure can help foster cheaper travel and a better-connected economy. This column shows that improvements in transportation can affect the location choices of firms in ways that are often beneficial to large regions, but may be detrimental to small intermediate regions through job losses. Using data from Japan’s high speed rail network, the authors confirm that ‘in-between’ municipalities that are connected to the network witness a sizeable decrease in employment.

Shusen Qi, Ralph De Haas, Steven Ongena, Stefan Straetmans, 03 March 2021

Digitalisation, FinTech, and the expansion of mobile banking have changed the way in which many banks operate on a day-to-day basis, including where they choose to have physical branches. This column explores the effect of digitalisation on the geography of banks, testing the effects of digital information-sharing on branch locations in Europe. findings suggest that information sharing has a strong positive effect on branch clustering, with banks more likely to open new branches in areas where they do not yet operate but where other banks are already present.

Mike Andrews, Alexander Whalley, 20 February 2021

We have witnessed significant changes in economic geography over the last years. However, little is known about the spatial concentration of innovation over time. This column uses a novel dataset containing the location of all US patents between 1836 to 2016 to analyse the geography of innovation over time. It finds that while concentration was as high as it is today in the late 1860s, it has seen a substantial decline thereafter, remaining at significantly lower levels for the larger part of the 20th century. It further finds substantial turnover in the identities of top inventing places.

Dimitris K. Chronopoulos, Sotiris Kampanelis, Daniel Oto-Peralías, John O.S. Wilson, 09 January 2021

The enduring impact of ancient colonialism can still be felt in the economic geography of the Mediterranean region. This column combines historical data on ancient colonies with current data on economic outcomes to show that areas once colonised by the Phoenicians, Greeks, and Etruscans have higher population densities and enhanced economic activity to this day – effects due more to the colonisation episode than to geographic attributes. The impact of ancient colonialism can thus be traced back more than two millennia, to the origin of the Mediterranean urban system.

Philip Roessler, Yannick Pengl, Robert Marty, Kyle Sorlie Titlow, Nicolas van de Walle, 06 December 2020

The colonial history of Africa still casts a shadow on development in the continent. This column uses a new geospatial dataset to study the long-term effects of colonial cash crop extraction in Africa. It finds that cash crop production had a positive long-run effect on local development in terms of urbanisation, road infrastructure, night-time luminosity, and household wealth. However, this came at the expense of investments in surrounding areas, which appear worse off today than predicted by precolonial factors. The legacy of the colonial economy in Africa was a negative feedback loop of weak institutions and spatial inequities.  

Roberto Bonfatti, Steven Poelhekke, 03 December 2020

Africa’s interior-to-coast roads are well placed to export natural resources, but not to support regional trade. Are they the optimal response to geography and comparative advantage, or the result of suboptimal political distortions? This column investigates the political determinants of road paving in West Africa in 1965–2014. Autocracies focused more than democracies on connecting metal and mineral deposits to ports, resulting in more interior-to-coast networks. This deposit-to-port bias was only present for deposits located on the elite’s ethnic homeland, suggesting that Africa’s interior-to-coast roads were the result of ethnic favouritism by autocracies.

Steven Poelhekke, 27 November 2020

Africa's roads were originally built so that colonial powers could extract its natural wealth. What has happened since then? Steven Poelhekke of the University of Auckland examines the maps with Tim Phillips.

Antonio Accetturo, Michele Cascarano, Guido de Blasio, 15 April 2020

From the 16th to the early 19th century, coastal areas of Italy (especially in the south-west) were subject to attacks by pirates launched from the shores of northern Africa. To protect themselves, residents of coastal locations moved inland to mountainous and rugged areas. This column shows how relocation constrained local economic development for a long period after the piracy threat had subsided and may have had aggregate consequences on Italy’s post-WWII development.

Esteban Rossi-Hansberg, Pierre-Daniel Sarte, Felipe Schwartzman, 29 November 2019

The increasing concentration of high-wage, cognitive non-routine occupations in larger cities in the US has not always benefited workers in other occupations. This column asks whether it is possible to re-allocate occupations across locations and benefit all workers. Drawing conclusions from a spatial equilibrium framework, it finds that a policy of city- and occupation-specific transfers can improve welfare for all workers and also allow the revitalisation of smaller cities. The policy would lead to every occupation having its own affordable and enjoyable hub.

Matthias Flückiger, Erik Hornung, Mario Larch, Markus Ludwig, Allard Mees, 28 August 2019

Against the backdrop of megaprojects such as the TEN-T Core Network or the Belt and Road initiative, assessing the role of transport infrastructure in fostering economic integration has gained renewed interest. While there is clear evidence that reducing transport costs increases economic integration in the short run, this column emphasises that we should be aware of the profound and lasting effects that past infrastructure investments have on economic and cultural integration.

Alexandra L. Cermeño, Kerstin Enflo, 03 January 2019

Urban growth is crucial for modernisation, and the wave of new towns in China since the 1980s is one example of a strategy employed by policymakers to encourage the process. This column analyses the long-run success of a town foundation policy in Sweden between 1570 and 1810. While the ‘artificially’ created towns failed to grow in the short term, they eventually began to grow and thrive, and today are as resilient as their medieval counterparts. 

Katherine Eriksson, Zach Ward, 06 August 2018

Those opposed to immigration often contend that immigrants are slow to assimilate. This column takes a longer-term view of assimilation by looking at the degree of ethnic spatial segregation in the US during and after the Age of Mass Migration. New methods and newly digitised data suggest that segregation in the US between 1850 and 1940 was both higher and more widespread than previously thought. However, despite slow rates of spatial assimilation, immigrants tend to assimilate culturally at a fast rate. 

Gregory Clark, Neil Cummins, 30 July 2018

Northern England is now less educated and less productive than the south. This north-south divide is often characterised by policymakers as evidence of market failure. This column uses surname distributions to show that the northern decline can instead be explained by persistent outmigration of talent from the north. People of northern origin perform as well on average as those of southern origin. Talented northerners, however, are now mainly located in the south, where they are an economic elite.

Pauline Charnoz, Claire Lelarge, Corentin Trevien, 22 April 2018

Research has shown that lower communication costs can act as a centralising force, prompting workers tend to rely more on the help of others and to specialise on a narrower set of tasks. This column reveals how reduced travel times resulting from a new high-speed rail transport in France fostered functional specialisation across different units of firms and greater centralisation. The findings highlight the mechanisms determining the level and distribution of productivity in an economy, and their redistributive impact both between and within firms



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