marshall s scale economies using panel data this paper estimates plant level production functions for machinery and high tech industries that allow for scale externalities from other plants in the same industry locally and from the scale or diversity of local economic activity outside the own industry the paper finds that the count of other own industry plants representing a count of local information spillover sources has strong productivity effects in high tech but not machinery industries single plant firms both benefit more from and generate greater external benefits than corporate plants given their greater reliance on external environments on dynamic externalities high tech single plant firms benefit also from the scale of past own industry activity i find little evidence of economies from the diversity or scale of local economic activity outside the own industry

price formation in electricity forward markets and the relevance of systematic forecast errors since the liberalisation of the european electricity sector forward and futures contracts have gained significant interest of market participants due to risk management reasons for pricing of these contracts an important fact concerns the non storability of electricity in this case according to economic theory forward prices are related to the expected spot prices which are built on fundamental market expectations in the following article the crucial impact parameters of forward electricity prices and the relationship between forward and future spot prices will be assessed by an empirical analysis of electricity prices at the european energy exchange and the nord pool power exchange in fact price formation in the considered markets is influenced by historic spot market prices yielding a biased forecasting power of long term contracts although market and risk assessment measures of market participants and supply and demand shocks can partly explain the futures spot bias inefficiencies in the analysed forward markets cannot be ruled out

market specific news and its impact on forward premia on electricity markets abstract this paper studies the impact of market specific news on the short term forward premia on the nordic electricity market i show that the short term premia between the day ahead and intra day electricity prices on the nordic market can be partly explained by the arrival of news specific to the power market by exploring the types of news i show that production failures are most important in shaping premia production disruptions in coal powered units are most frequent and have the greatest effect on the differences between the day ahead and intra day prices

how local are spatial density externalities neighbourhood effects in agglomeration economies andersson m klaesson j and larsson j p how local are spatial density externalities neighbourhood effects in agglomeration economies regional studies the geographic scale at which density externalities operate is analysed in this paper using geocoded high resolution data the analysis is focused on exogenously determined within city squares neighbourhoods of 1 km2 the analysis confirms a city wide employment density wage elasticity and an economically significant density wage elasticity at the neighbourhood level that attenuate sharply with distance panel estimates over 20 years suggest a neighbourhood density wage elasticity of about 3 while the city wide elasticity is about 1 it is argued that the neighbourhood level is more prone to capture learning e g through knowledge and information spillovers this interpretation is supported by 1 significantly larger neighbourhood elasticities for university educated workers and 2 sharper attenuation with distance of the effect for such wo

regional heterogeneity and interregional research spillovers in european innovation modelling and policy implications guastella g and van oort f g regional heterogeneity and interregional research spillovers in european innovation modelling and policy implications regional studies in agglomeration studies the effects of various regional externalities related to knowledge spillovers remain largely unclear to explain innovation clustering scholars emphasize the contribution of localized knowledge spillovers lks and specifically when estimating the knowledge production function kpf of interregional research spillovers however less attention is paid to other causes of spatial heterogeneity in applied works spatial association in data is econometrically related to evidence of research spillovers this paper argues that in a kpf setting omitting spatial heterogeneity might lead to biased estimates of the effect of research spillovers as an empirical test a spatial kpf is estimated using eu 25 regional data including a spatial trend to control for unexplained spatial variation in innovation accounting

skills in the city this paper documents the allocation of skills across cities and estimates the impact of agglomeration on the hedonic prices of worker skills we find that large cities are more skilled than are small cities but only to a modest degree we also show that the increase in productivity associated with agglomeration as measured by the urban wage premium is larger for workers with stronger cognitive and people skills in contrast motor skills and physical strength are not rewarded to a greater degree in large cities urbanization thus enhances thinking and social interaction rather than physical abilities these results are robust to a variety of estimation strategies including using nlsy variables that control for worker quality and a worker msa fixed effect specification

technology agglomeration and regional competition for investment competition for firms by region has a long standing history and the academic literature has debated whether such competition is efficient we develop a model that explores technology development by firms facing regional competition for their invest ment and examine the endogenous determination of region policy firm technology and agglomeration externalities we find a new source of inefficiency regional competition leads firms to inefficiently distort their development and selection of production tech nology to improve their standing in the regional competition for their investment we show that these inefficient firm decisions on technology and location can also weaken agglomeration externalities jel classification h71 l2

geography industrial organization and agglomeration this paper makes two contributions to the empirical literature on agglomeration economies first the paper uses a unique and rich database in conjunction with mapping software to measure the geographic extent of agglomerative externalities previous papers have been forced to assume that agglomeration economies are club goods that operate at a metropolitan scale second the paper tests for the existence of organizational agglomeration economies of the kind studied qualitatively by saxenian 1994 this is a potentially important source of increasing returns that previous empirical work has not considered results indicate that localization economies attenuate rapidly and that industrial organization affects the benefits of agglomeration

spatial evolution of the computer industry in the usa abstract this paper examines the spatial evolution of computers across 317 metro areas in the usa since the introduction of the personal computer we start by examining the relative distribution of employment across cities examining how that distribution changes in 1977 1992 and how cities move through the distribution for computers transition matrices are stationary with the industry exhibiting no tendency to settle down nor any tendency of retrenchment during periods of national high tech employment decline there is no tendency of the relative size distribution of computer employment to collapse go bimodal etc overall computers exhibit some turbulence with dramatic big winners and losers among cities as well as persistence for some cities in employment shares in attracting or repelling an industry urban heterogeneity is important large well educated cities near san jose have a much greater chance of attracting high tech employment much lower mean first passage times moving up states and less chance of losing it in assessing the determinants of persistence in local employment patterns we examine sources of productivity growth we find strong evidence of significant dynamic own industry externalities for single plant firms and little evidence of urbanization jacobs knowledge type externalities corporate plants in computers seem to be self reliant and not really influenced by externalities

bundle pricing of inventories with stochastic demand we consider a retailer selling a fixed inventory of two perishable products over a finite horizon assuming poisson arrivals and a bivariate reservation price distribution we determine the optimal product and bundle prices that maximize the expected revenue our results indicate that the performances of mixed bundling pure bundling and unbundled sales strategies heavily depend on the parameters of the demand process and the initial inventory levels bundling appears to be most effective with negatively correlated reservation prices and high starting inventory levels when the starting inventory levels are equal and in excess of average demand most of the benefits of bundling can be achieved through pure bundling however the mixed bundling strategy dominates the other two when the starting inventory levels are not equal we also observe that an incorrect modeling of the reservation prices may lead to significant losses the model is extended to allow for price changes during the selling horizon it is shown that offering price bundles mid season may be more effective than changing individual product prices

product quality and competition evidence from the broadband industry abstractaccess to high quality broadband internet is important in many different respects such as in communication education commerce and information acquisition we investigate the relationship

estimating dynamic localization economies the inadvertent success of the specialization index and the location quotient estimating dynamic localization economies the inadvertent success of the specialization index and the location quotient regional studies after addressing definitional issues on the concepts of c

a theory of urban growth in an economy experiencing endogenous economic growth and exogenous population growth we explore two main themes how urbanization affects efficiency of the growth process and how growth affects patterns of urbanization localized information spillovers promote agglomeration and human capital accumulation fosters endogenous growth individual city sizes grow with local human capital accumulation and knowledge spillovers and city numbers generally increase which we demonstrate is consistent with empirical evidence we analyze whether local governments can successfully internalize local dynamic externalities in addition we explore how growth involves real income differences across city types and how urbanization can foster income inequality most nonagricultural production in developed countries occurs in metropolitan areas the underlying reasons why economic activity agglomerates into cities localized information and knowledge spillover also make cities the engines of economic growth in an we gratefully acknowledge support of the national science foundation grants sbr 9422440 and sbr9730142 for this research the work has benefited from conversations with harl ryder on the dynamics of the model and from comments by gilles duranton and participants in seminars at brown colorado and texas austin and a presentation at an isit seminar sponsored by the centre for economic policy research and the national bureau of economic research

public information arrival we develop a measure of public information flow to financial markets and use it to document the patterns of information arrival with an emphasis on the intraday flows the measure is the number of news releases by reuter s news service per unit of time we find that public information arrival is nonconstant displaying seasonalities and distinct intraday patterns next we relate our measure of public information to aggregate measures of intraday market activity our results suggest a positive moderate relationship between public information and trading volume but an insignificant relationship with price volatility

the polarization of the u s labor market this paper analyzes a marked change in the evolution of the u s wage structure over the past fifteen years divergent trends in upper tail 90 50 and lower tail 50 10 wage inequality we document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years since 1980 wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987 but it has ceased growing and for some measures actually narrowed since the late 1980s furthermore we find that occupational employment growth shifted from monotonically increasing in wages education in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage education distribution in the 1990s we characterize these patterns as the u201cpolarization u201d of the u s labor market with employment polarizing into high wage and low wage jobs at the expense of middle wage work we show how a model of computerization in which computers most strongly complement the non routine abstract cognitive tasks of high wage jobs directly substitute for the routine tasks found in many traditional middle wage jobs and may have little direct impact on non routine manual tasks in relatively low wage jobs can help explain the observed polarization of the u s labor market this abstract was borrowed from another version of this item

deutsche mark dollar volatility intraday activity patterns macroeconomic announcements and longer run dependencies this paper provides a detailed characterization of the volatility in the deutsche mark dollar foreign exchange market using an annual sample of five minute returns the approach captures the intraday activity patterns the macroeconomic announcements and the volatility persistence arch known from daily returns the different features are separately quantified and shown to account for a substantial fraction of return variability both at the intraday and daily level the implications of the results for the interpretation of the fundamental driving forces behind the volatility process is also discussed the efficient market hypothesis contends that financial asset prices provide rational assessments of fundamental values and future payoffs by implication price changes should reflect the arrival and processing of all relevant new information however the proportion of return variability that can be ascribed to public news announcements is low for example cutler poterba and summers 1989 find that even the largest daily price changes in the stock market generally cannot be associated with any significant economic news 1 moreover proxies for the flow of public information e g the number of news items released by reuter s news service berry and hiowe 1994 or dow jones company mitchell and mulherin 1994 explain little of the overall variation thus if private information is ruled out proponents of rational price formation have to assert the existence of important news items

valuing rail access using transport innovations this paper uses a powerful empirical method to evaluate the benefits of rail access to consumers we study the effects on house prices of a transport innovation that altered the distance to the nearest station for some households but left others unaffected the transport innovation we study is the construction of new stations in london in the late 1990s using this innovation we implement a quasi experimental approach that allows us to avoid the biases inherent in cross sectional valuation work our evidence on distance station effects on local prices identified through distance changes induced by the transport innovation suggests that households value rail access and that these valuations are large compared to the valuations of other local amenities

firm heterogeneity and location choices evidence from foreign manufacturing investments in china this paper develops a model which indicates that foreign firms location choices are determined jointly by site attributes and firm heterogeneity the model is estimated using data on 2565 foreign manufacturing investments in china the conditional logit estimates and simulation results provide supportive evidence an increase in a firm s labour intensity magnifies the impact of labour cost while a location s local communications infrastructure has a stronger influence on foreign firms that have adopted modern information technology it is also found that agglomeration effects decrease with firm size and labour quality implications for researchers and policy makers are discussed in the conclusion

applying tradable permits to biodiversity conservation effects of space dependent conservation benefits and cost heterogeneity on habitat allocation this paper is concerned with the cost effective allocation of habitat for species under spatio temporally heterogeneous economic development to address the dynamic dimension of the problem we consider tradable development rights as the instrument of choice a particular challenge in applying tradable development rights is that the conservation benefit of an individual habitat patch depends on its spatial relationship with other habitat patches and thus is an emergent rather than a fixed property we analyse with a conceptual model the spatial and temporal dynamics of habitats in a region under a tradable development rights market that takes spatial interaction of habitats explicitly into account in our analysis two different outcomes may emerge depending on the levels of spatial interaction and cost heterogeneity an ordered structure where habitat patches are clustered in space and are stable over time and a disordered structure where habitat patches are scattered in space and subject to high turnover of destruction and recreation a high level of spatial interaction or a low level of cost heterogeneity favours an ordered structure while a low level of spatial interaction or a high level of cost heterogeneity favours a disordered structure

macroeconomic implications of agglomeration cities exist because of the productivity gains that arise from clustering production and workers a process called agglomeration how important is agglomeration for aggregate growth this paper constructs a dynamic stochastic general equilibrium model of cities and uses it to estimate the effect of local agglomeration on aggregate growth we combine aggregate time series and city level panel data to estimate the model s parameters via generalized method of moments the estimates imply a statistically and economically significant impact of local agglomeration on the growth rate of per capita consumption raising it by about 10

does history matter only when it matters little the case of city industry location when will an industry subject to agglomeration economies move from an old high cost site to a new low cost site it is argued that history in the form of sunk costs resulting from the operation of many firms at a site creates a first mover disadvantage that can prevent relocation it is demonstrated that developers of industrial parks can partly overcome this inertia through discriminatory pricing of land over time and empirical evidence is provided that they actually engage in such behavior it is also shown that other aspects of developer land sale strategy can be a source of information on the nature of interfirm externalities

how markets process information news releases and volatility we examine the impact of scheduled macroeconomic news announcements on interest rate and foreign exchange futures markets we find these announcements are responsible for most of the observed time of day and day of the week volatility patterns in these markets while the bulk of the price adjustment to a major announcement occurs within the first minute volatility remains substantially higher than normal for roughly fifteen minutes and slightly elevated for several hours nonetheless these subsequent price adjustments are basically independent of the first minute s return we identify those announcements with the greatest impact on these markets we examine the impact on interest rate and foreign exchange markets of scheduled macroeconomic news releases such as the employment report the consumer price index cpi and the producer price index ppi many market participants believe that such announcements have a major impact on financial markets indeed a small industry devoted to predicting the figures to be released in upcoming releases has evolved in recent years with the exception of the weekly money supply figures however the impact of such announcements on financial markets has received scant attention 1 this is doubly surprising given the considerable research interest in market volatility since these news releases are a potential source of much of this volatility consider for instance figure 1 as shown there prices in interest rate and foreign exchange futures markets are much more volatile between 8 30 and 8 35 a m eastern time et than during any other five minute trading period including

e commerce trends and impacts across europe abstract this study investigates patterns in electronic commerce e commerce activities and their impact on labour productivity growth for a group of 14 european countries at hand for the exercise is a unique panel of micro aggregated firm level data spanning the years 2002 2010 the empirical approach involves two main elements a static specification and a dynamic panel data model the former is a difference specification estimated by ols and the latter model uses the system gmm estimator to account for endogeneity of e commerce activities for the impact analysis e commerce is defined specifically as e sales that is orders firms receive electronically through edi or websites descriptive statistics reveal that the proportion of firms engaging in e sales activities after starting from a low level is slowly growing over time the ols estimates which control for industry time and country effects show that the changes in e sales activities and labour productivity growth are significantly positively related specifically an increase in e sales by one percentage point raises labour productivity growth by 0 3 percentage points over a two year period service industries experience a larger impact than does manufacturing similar results are produced by the dynamic panel data estimations which show that the increase in e sales activities during the period studied accounts for 18 per cent of the total growth in labour productivity in addition the results demonstrate that smaller firms gain the most from increases in e sales overall the magnitude of the estimates differs less across methods than it does between industries or over time

storage and the electricity forward premium we develop and test a model describing the influence of natural gas storage inventories on the electricity forward premium the model is constructed by linking the effect of gas storage constraints on the higher moments of the distribution of electricity prices to an established model of the effect of those moments on the forward premium the model predicts a sharply negative effect of gas storage inventories on the electricity forward premium when demand for electricity is high and space heating demand for gas is low empirical results based on pjm data strongly support the model

technological specialization and variety in urban invention o huallachain b and lee d s technological specialization and variety in urban invention regional studies urban economic theory distinguishes between knowledge spillovers that occur within specializations and those that cross technologies empirical analysis has sought to gauge their relative strength but the results are inconclusive metropolitan specialization and variety at different aggregation levels of a us patent classification system are assessed using theil s relative entropy index the results show that specialization and variety are not competing features of urban technological structure cities can have both the invention rate positively associates with specialization in diverse technologies the cross fertilization of ideas among skilled professionals with different expertise and the interaction between specialists of narrow fields of knowledge are both important in technological advance the most inventive cities have deep specializations in different technologies the results also sho

spatial wage disparities sorting matters spatial wage disparities can result from spatial differences in the skill composition of the workforce in non human endowments and in local interactions to distinguish between these explanations we estimate a model of wage determination across local labour markets using a very large panel of french workers we control for worker characteristics worker fixed effects industry fixed effects and the characteristics of the local labour market our findings suggest that individual skills account for a large fraction of existing spatial wage disparities with strong evidence of spatial sorting by skills interaction effects are mostly driven by the local density of employment not controlling for worker heterogeneity leads to very biased estimates of interaction effects endowments only appear to play a small role

taxes and agglomeration economies how are they related to nonprofit firm location author affiliation teresa d harrison department of economics drexel university 3141 chestnut street philadelphia pa 19104 usa tharrison drexel edu1 introductionnonprofits are an ever increasing component of the u s economy from 1997 2001 employment growth in the nonprofit sector averaged 2 5 outpacing both the business 1 8 and the government sectors 1 6 moore 2004 much of this growth stems from new nonprofits yet few studies have investigated possible determinants of nonprofit entry and location decisions most of these studies focus on demand side factors wolch and geiger 1983 downes and greenstein 1996 bielefeld murdoch and waddell 1997 for example downes and greenstein 1996 focus on demographic and religious characteristics of the surrounding community and its relation to private school location in this paper i use firm level data and focus on potentially important supply side variables tax rates and agglomeration economies most nonprofits are exempt from corporate sales and property taxes hansmann 1987 and gulley and santerre 1993 find evidence that higher corporate property and sales taxes are positively related to nonprofit market share however market share measures obfuscate the dynamics of the industry in terms of entry and exit rates if market share for nonprofits increases in response to higher tax rates this could be because new nonprofits are entering or because for profits are leaving the industry identifying these two cases is impossible with market share data using nonprofit tax return data i examine the relation between these tax exemptions and state county location decisions of new nonprofits to my knowledge this is the first paper to study these interactions at the individual firm level nonprofits also receive tax favored status due to the individual tax deduction on charitable contributions gentry and penrod 1998 employees of and donors to the nonprofits will be affected by the individual tax rates this in turn alters the costs to the nonprofit of location in a high or low tax area unlike previous studies i therefore investigate the relation between individual marginal tax rates and nonprofit location another potential supply side determinant of firm location decisions is the existing firm concentration in the area the potential economies of scale generated by proximity to other firms have been extensively examined in for profit industries 1 previous studies have generally found a positive relation between agglomeration and location carlton 1983 bartik 1985 woodward 1992 gius and frese 2002 rosenthal and strange 2003 to my knowledge bielefeld et al 2004 is the only study that examines nonprofit agglomeration finding evidence of agglomeration in dallas texas this warrants additional examination because nonprofit output is generally service driven and less mobile thus agglomeration implies greater direct competition making market saturation a larger issue in the nonprofit market using a nationwide dataset i examine how location and existing firm concentration are related and explore the potential presence of market saturation i also investigate possible differences between inter and intra industry agglomeration my results provide new insight into nonprofit firm behavior in most cases higher tax rates are associated with new firm location but the results for corporate and property taxes vary across the sample years i find that individual tax rates are an important consideration for nonprofits and are positively correlated to location my analysis also contributes to the literature by examining how the sensitivity to tax rates varies according to the sources of revenues for the institution firms that depend highly on individual donations are more likely to locate in high individual tax states while nonprofits with large mission related revenues are more sensitive to the property tax rate

effects of environmental regulation on foreign and domestic plant births is there a home field advantage abstract whether environmental regulations alter capital flows remains a hotly debated issue this paper uses county level data to examine the location decisions of domestic and foreign firms in a single empirical model and tests for asymmetries by firm origin in the degree to which capital flows are influenced by environmental standards we find that while domestic firms are influenced by environmental regulations foreign firms are not since the benefits of foreign investment are well documented foreign plants typically provide more jobs and increase local wages by more than domestic plants this result suggests a double dividend is available foreign plants provide an economic stimulus and are not unduly influenced by environmental protections

the attenuation of human capital spillovers abstract this paper uses 2000 census data to estimate the relationship of agglomeration and proximity to human capital to wages the paper takes a geographic approach and focuses on the attenuation of agglomeration and human capital effects differencing and instrumental variable methods are employed to address endogeneity in the wage agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables three key results are obtained first the spatial concentration of employment within five miles is positively related to wage second the benefits of spatial concentration are driven by proximity to college educated workers an instance of human capital spillovers third these effects attenuate sharply with distance

no place like home relocation capabilities and firm survival in the german machine tool industry after world war ii we explore the extent to which organizational capabilities are location specific by studying the location choices and longevity of east german machine tool producers that relocated to west germany after world war ii relocating firms were similar in performance to experienced west german incumbents they outperformed new entrants without prewar industry experience this suggests they were able to build on capabilities acquired before the war even though relocating firms tended lo locate in industry agglomerations and in urbanized regions we find no evidence suggesting that firm performance benefited from agglomeration economies copyright 2011 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

marshall s scale economies and jacobs externality in korea the role of age size and the legal form of organisation of establishments this paper revisits the concept of agglomeration economies by estimating the effects of localisation urbanisation and local competition on labour productivity using establish ment level data in korean manufacturing industries it is found that when an establish ment locates in a more localised specialised more urbanised diversified and more competitive area its workers become more productive due to external benefits from agglomeration issues of self selection bias and omitted variable bias are addressed by instrumenting the variables measuring localisation economies and controlling for the fixed effects of establishments location and industries year however the external effects from the spatial proximity of other establishments vary across the categories of industry type age size and legal form of organisation of establishments establishments in traditional heavy manufacturing industries receive more external benefits in a less diversified area while those in transport equipment manufacturing industries enjoy the largest benefits from localisation externalities exist for establishments aged between 2 and 7 years having at least 10 workers being corporate and having multiplants or not being headquarters establishments in relatively young industries rely more on diver sified environments while establishments in relatively old industries receive greater external benefits in the same industry cluster this result supports the product life cycle location theory of duranton and puga

globalization and the skilled city abstract the location of economic activity both across and within countries has undergone dramatic shifts over the last five decades three key trends stand out first cross country inequality has declined as many developing countries have grown rapidly second economic geography within countries has instead grown more unequal in both the developed and the developing world third within country spatial disparities have grown mainly because of the disproportionate success of skilled cities in this paper i develop a model that jointly explains these patterns as a consequence of deepening international economic integration my model explains the faster population and output growth of skilled cities as well as their tendency to increase their initial skill advantage consistent with the evidence my theory predicts a non monotonic path of urban growth in developed countries the model predicts a future shift in worldwide urban hierarchies as some developing world cities overtake unskilled cities in industrialized countries along global supply chains

which agglomeration externalities matter most and why this paper revisits the ongoing discussion on the importance of agglomeration externalities specifically specialization diversity and competition effects that may contribute to innovation productivity and urban employment growth previous meta analyses suggested that the evidence on agglomeration externalities is strongly context specific expanding an earlier analysis of 31 articles we seek to draw in this paper more robust conclusions by means of the statistical evidence for agglomeration externalities presented in 73 scientific articles all building on the seminal work of glaeser et al 1992 our results confirm that the heterogeneity among studies is huge and can only be partially accounted for by means of an ordered probit analysis additionally some evidence of publication bias is found we conclude that the conventional lines of inquiry in this literature may now have reached strongly diminishing returns new lines of inquiry using rich micro level data on firms and workers dynamic general equilibrium models at the macro level more attention for spatial and temporal variation in the impacts of agglomeration and further investigations into the spatial scope of externalities are promising avenues for further research that can enhance our understanding of how agglomeration externalities continue to fuel our increasingly urbanized world

economies of density and productivity in service industries an analysis of personal service industries based on establishment level data abstract this study aims to empirically investigate the determinants of service industry productivity such as economies of scale and economies of density by using establishment level data related to personal service industries in japan the study estimates the production functions for both value added and physical output measures in almost all the service industries examined significant economies of scale and economies of density are observed wherein productivity increases by 7 to 15 when the municipality population density doubles these findings are confirmed by an estimation in which the measures of physical output are considered instead of value added

risk premia in the german day ahead electricity market revisited the impact of negative prices abstract this paper replicates the study by viehmann 2011 that investigated risk premia in the german day ahead electricity market from october 2005 to september 2008 while estimated sizes of risk premia can be replicated this paper does not reproduce respective standard errors leading to remarkable differences between the reported significance levels an extension with data of preceding years points to further differences with respect to size and statistical significance in addition this paper analyzes the impact of negative prices on risk premia negative electricity prices were introduced in 2008 at the european power exchange epex and in 2013 at the energy exchange austria exaa the results of an econometric analysis suggest that the introduction of negative prices has led to a decrease in risk premia when compared to the period of a positive price regime

make money surfing the web the impact of internet use on the earnings of u s workers much research on the digital divide presumes that adults who do not use the internet are economically disadvantaged yet little research has tested this premise after discussing several mechanisms that might produce differences in earnings growth between workers who do and do not use the internet we use data from the current population survey to examine the impact of internet use on changes in earnings over 13 month intervals at the end of the internet boom our analyses reveal robustly significant positive associations between web use and earnings growth indicating that some skills and behaviors associated with internet use were rewarded by the labor market consistent with human capital theory current use at work had the strongest effect on earnings in contrast to economic theory which has led economists to focus exclusively on effects of contemporaneous workplace technology use workers who used the internet only at home also did better suggesting that users may have benefited from superior

the relationship between spot and futures prices in the nord pool electricity market abstract we analyze 11 years of historical spot and futures prices from the hydro dominated nord pool electricity market we find that futures prices tend to be higher than spot prices the average convenience yield is therefore negative but varies by season and depends on the storage levels in hydro reservoirs the average realized return on holding a long position in the futures market is also negative the negative convenience yield and risk premium contrast empirical findings in most other commodity markets we argue that differences between the supply and demand sides in terms of risk preferences and the ability to take advantage of short term price variations can contribute to explain the observed relationship between spot and futures prices in addition our analysis shows that the relationship between spot and futures prices is clearly linked to the physical state of the system such as hydro inflow reservoir levels and demand

agglomeration economies in urban manufacturing industries a case of japanese cities abstract the effects of urban agglomeration economies on productivities in two digit manufacturing industries is estimated using the cross section data of japanese cities in 1979 urbanization and localization economies which are major forms of urban agglomeration economies are explicitly separated the estimates of these economies vary considerably among industries light industries receive more productive advantages from urbanization economies than from localization economies but heavy industries experience these economies more from localization economies than from urbanization economies

optimal bundle formation and pricing of two products with limited stock abstract in this study we consider the stochastic modeling of a retail firm that sells two types of perishable products in a single period not only as independent items but also as a bundle our emphasis is on understanding the bundling practices on the inventory and pricing decisions of the firm one of the issues we address is to decide on the number of bundles to be formed from the initial product inventory levels and the price of the bundle to maximize the expected profit product demands follow a poisson process with a price dependent rate customer reservation prices are assumed to have a joint distribution we study the impact of reservation price distributions initial inventory levels product prices demand arrival rates and cost of bundling we observe that the expected profit decreases as the correlation between the reservation prices of two products increases with negative correlation bundling cost has a significant impact on the number of bundles formed when the product prices are low the retailer sells individual products as well as the bundle mixed bundling when they are high the retailer sells only bundles pure bundling the expected profit and the number of bundles offered decrease as the variance of the reservation price distribution increases for high starting inventory levels the retailer reduces bundle price and offers more bundles the number of bundle sales decreases and the number of individual product sales increases when the arrival rate increases since the need for bundling decreases impacts of substitutability and complementarity of products are also investigated the retailer forms more bundles or charges higher prices for the bundle or both as the products become more complementary and less substitutable

the employment and wage impact of broadband deployment in canada hundreds of millions of dollars are spent by the canadian federal and provincial governments to subsidize broadband deployment this paper provides the first empirical assessment of the impact of broadband on employment and wage growth in canada variation in elevation explains the regional difference in broadband coverage and is used as an instrument to estimate the causal effect we find that the deployment of broadband in 1997 2011 promoted rural employment and wage growth in service industries goods industries were not impacted the findings suggest that broadband helps service industry businesses overcome geographical barriers that have traditionally hampered rural growth

spinoffs and the ascension of silicon valley this article analyzes firm entry and performance in the semiconductor industry from the introduction of the integrated circuit ic in 1965 until 1987 during this period the industry which was initially concentrated on the east coast of the united states became increasingly clustered in silicon valley sv california this location shift was accompanied by a change in the technology used to produce semiconductor devices by studying how diversifiers and new firms enter into ic production and the technology they choose to produce ics we document the process of growth of sv in particular we analyze how agglomeration economies as well as the heritage of new firms founders affect the opportunities pursued by entrants and their long term likelihood of success we find that ic entrants in sv were more likely to enter at the technological frontier than ic entrants in other clusters however we find no evidence suggesting that being located in a cluster helped existing ic producers that were not initially at the technological frontier to catch up with the rest of the industry examining long term performance we find that firms that become top producers are disproportionately spinoffs of leading firms or diversifiers with a transistor background while most of these firms were located in sv after controlling for heritage and background location has no significance on the likelihood of becoming a top producer

comments on gaussian demand and commodity bundling richard schmalensee s paper deals with commodity bundling that is the selling of goods or services in packages the paper is particularly interesting to those who study and or manage the marketing function indeed selling of goods or services in packages is a very common marketing strategy examples include vacation packages season tickets concerts sports theater etc and complete dinners there are two forms of bundling strategies pure bundling if goods are sold only in packages and mixed bundling if goods are sold separately as well as in packages e g ordering a la carte vs a whole dinner bundles sometimes include goods or services that cannot be sold separately luxury in a car is tied to transportation services a brand name cannot be sold alone see adams and yellen 1976 these authors also mention that selling different sizes is a form of commodity bundling if two sizes of a product are sold a small size s and a large size s the offering s s is a form of mixed commodity bundling the quantity s s is not offered separately but only as part of the bundle s in the past the explanation of commodity bundling focused on cost savings in production transactions or complementarity of bundle components stigler 1963 first articulated the idea that the profitability of commodity bundling can stem from its ability to sort customers into groups with different reservation price characteristics and hence to extract consumer surplus adams and yellen 1976 discussed this sorting of consumers figure 1 describes the case of selling each good independently any individual with reservation prices rl r2 for the two goods falls into one of four regions 0 are nonbuyers r1 pi r2 pi p2 finally mixed bundling is shown in figure 3 region 1 individuals buy 1 only because r pi but r2 pb

identifying the local economic development effects of million dollar facilities presented on february 22 2013 from 12 35 pm 2 00 pm in the architecture east building room 217 on the georgia tech campus

the internet and local wages a puzzle how did the diffusion of the internet affect regional wage inequality we examine the relationship between business investment in advanced internet technology and local variation in us wage growth between 1995 and 2000 we identify a puzzle the internet is widespread but the economic payoffs are not advanced internet technology is only associated with substantial wage growth in the 6 percent of counties that were already highly wealthy educated and populated and had it intensive industry advanced internet and wage growth appear unrelated elsewhere overall advanced internet explains over half the difference in wage growth between already well off counties and all others jel j31 l86 o33 r11 r23

firm innovation the influence of r d cooperation and the geography of human capital inputs abstract this paper investigates the role played by the geography of labor inputs in the promotion of innovation knowledge can be transferred between firms by inter firm interactions and inter firm cooperation in addition knowledge can also be transferred between firms by human capital mobility in order to examine these issues we employ a unique innovation dataset from finland this dataset provides information about a firm s innovation performance along with information regarding the origins of a firm s recent labor acquisitions the origins of the labor are defined according to both the industry and the region analyzing these data allows us to identify the different roles which the geography of knowledge exchanges and the geography of labor markets play in the innovation process

traffic congestion s economic impacts evidence from us metropolitan regions traffic congestion alleviation has long been a common core transport policy objective but it remains unclear under which conditions this universal byproduct of urban life also impedes the economy using panel data for 88 us metropolitan statistical areas this study estimates congestion s drag on employment growth 1993 to 2008 and productivity growth per worker 2001 to 2007 using instrumental variables results suggest that congestion slows job growth above thresholds of approximately 4 5 minutes of delay per one way auto commute and 11 000 average daily traffic adt per lane on average across the regional freeway network while higher adt per freeway lane appears to slow productivity growth there is no evidence of congestion induced travel delay impeding productivity growth results suggest that the strict policy focus on travel time savings may be misplaced and instead better outlooks for managing congestion s economic drag lie in prioritising the economically most important trips perhaps through road pricing or in providing alternative travel capacity to enable access despite congestion

profiting from agglomeration evidence from the salmon aquaculture industry asche f roll k h and tveteras r profiting from agglomeration evidence from the salmon aquaculture industry regional studies even though most celebrated clusters seem to be in high cost areas many econometric studies represent agglomeration externalities as increased primal productivity or reduced cost while this certainly can be consistent with some observed agglomeration effects it may be insufficient for the growth of a cluster the key condition for this is that profitability is higher the paper tests for agglomeration effects using a profit function approach this may be particularly important for firms in high cost clusters where revenue effects can be as important as productivity and cost effects the paper tests for both intra and inter industry agglomeration externalities using firm level data

quantifying spillover effects from large land based investment the case of mozambique summary almost a decade after a spike in land demand following the 2007 08 commodity boom evidence on impacts of this phenomenon remains limited and mostly case study based we show that information on location and start data of large farms combined with existing smallholder farm surveys allows to complement this with a difference in difference approach to systematically assess spillovers from large farm establishment illustrative application to mozambique suggests positive short term effects from newly established large farms on adoption of agricultural practices and input use by small farms less than 50 km from newly established large operations robustness checks for crop farms only also suggest job creation in the proximity of newly established crop but not livestock farms yet large farm establishment decreased perceived well being within a 25 km band and in the time horizon considered here did not lead to better access to output markets cultivation of larger areas or once other factors are controlled for higher yields this allows us to reject the notion of negative spillovers from large farm establishment but casts doubt on the wisdom of large unconditional subsidies to attract investors in addition to drawing policy conclusions for mozambique we highlight the methodology s wider applicability and scope for expansion

computing productivity firm level evidence we explore the effect of computerization on productivity and output growth using data from 527 large us firms over 1987 1994 we find that computerization makes a contribution to measured productivity and output growth in the short term using one year differences that is consistent with normal returns to computer investments however the productivity and output contributions associated with computerization are up to five times greater over long periods using five to seven year differences the results suggest that the observed contribution of computerization is accompanied by relatively large and time consuming investments in complementary inputs such as organizational capital that may be omitted in conventional calculations of productivity the large long run contribution of computers and their associated complements that we uncover may partially explain the subsequent investment surge in computers in the late 1990s

technology agglomeration and regional competition for investment technology agglomeration the active courting of firms by municipalities regions and even nations has a long standing history and the competition for firm location through a wide variety of incentives seems to have escalated to new heights in recent years we develop a model that explores technology development by firms that face regional competition for their investment and examine the endogenous determination of regions policies firm technology and agglomeration externalities in particular we find that regional competition leads firms to inefficiently distort their research and development efforts in hopes of improving their standing in the competition amongst regions for their investment this loss in efficiency is aggravated by the agglomeration externalities that are inherently present in many industries we offer several case studies that provide evidence consistent with our theoretical conclusions

multilevel approaches and the firm agglomeration ambiguity in economic growth studies empirical studies in spatial economics have shown that agglomeration economies may be a source of the uneven distribution of economic activities and economic growth across cities and regions both localization and urbanization economies are hypothesized to foster agglomeration and growth but recent meta analyses of this burgeoning body of empirical research show that the results are ambiguous recent overviews show that this ambiguity is fuelled by measurement issues and heterogeneity in terms of scale of time and space aggregation growth definitions and the functional form of the models applied alternatively in this paper we argue that ambiguity may be due to a lack of research on firm level performance in agglomerations this research is necessary because the theories that underlie agglomeration economies are microeconomic in nature hierarchical or multilevel modeling which allows micro levels and macro levels to be modeled simultaneously is becoming an increasingly common practice in the social sciences as illustrated by detailed dutch data on firm level productivity employment growth and firm survival we argue that these approaches are also suitable for reducing the ambiguity surrounding the agglomeration firm performance relationship and for addressing spatial sectoral and cross level heterogeneity

firm location decisions regional grants and agglomeration externalities we examine whether discretionary government grants influence where domestic and multinational firms locate new plants and how the presence of agglomeration externalities interacts with these policy instruments we find that a region s existing industrial structure has an effect on the location of new entrants grants do have a small effect in attracting plants to specific geographic areas but importantly we find that firms are less responsive to government subsidies in areas where there are fewer existing plants in their industry this suggests that these subsidies are less effective in influencing firms location decisions in the face of countervailing co location benefits