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10/27/2011 11:19:07 AM ,QWURGXFWLRQ :HOFRPHIURPWKH3UHVLGHQW<RVKLUR+LJDQR
Welcome to thelatest newsletter.
On behalf of theRegional Science
Association
International (RSAI),
I would like to invite
you all to attend the
9th World Congressin Timisoara,
Romania next May.
As you know, RSAI has three superregions, the European Regional Science
Association (ERSA), Paciﬁc Regional
Science Conference Organization(PRSCO), and RSAmericas (North
American Regional Science Council and
Latin American Sections). Each of thesehas different histories and backgrounds
but all have encouraged the mutual
exchange of ideas under the umbrellaorganization of RSAI. Each conference
has been organized separately by eachsuper-region but the World Congress,
initiated in 1980, is truly an RSAI
international meeting in the sense that it
has been set up as a truly global
conference, normally in regions of theworld where we wish to develop regional
science. RSAI still needs to be active incountries where ofﬁcial RSAI Sections
have not yet been established. This isalso one of the major reasons the RSAICouncil Board is composed of delegatesfrom the three super-regions. The RSAICouncil aims to promote regional
science not only from local/domestic/
superregional perspectives but also
taking into account a truly internationaland global view of our community.
Since 2008 our friends, led by Prof.
Daniela Constantin (President of the
Romanian Regional Sciencepirs_20112.indd 2

Association: an active section of ERSA
and RSAI building bridges to Easternand Middle Europe) have unselﬁshly
prepared for the successful organizationof the Congress. Our Romanian friends
are very keen to welcome all of you andyour families to Timisoara. Timisoara isa most beautiful city in every sense andpeople living there have progressive andenterprising spirits. You will enjoy not
only the academic activities scheduled
for the Meeting but also the historicaland cultural exchange with friends fromall over the world.
The next world Congress is a good
opportunity for us to understand andrealize that we are all part of RSAI inevery sense. I cordially invite your active
participation in the Congress.
I am looking forward to seeing you soonin Timisoara.
Yoshiro Higano, President of RSAI :HOFRPHIURPWKH(GLWRUVGraham Clarke andEveline van Leeuwen

The editors are pleased to welcome you
to this newsletter exploring the issue ofthe importance of the drinks industry inregional economies – no we do notmean the consumption of alcohol at our
meetings (which might indeed injectmuch needed revenues into local
economies) – but the importance of local
specialized production of (alcoholic)beverages. To this end we visit

10/27/2011 11:19:07 AM

Scotland, Greece and Japan. We also
introduce another Fellow (T.John Kim)
and the important regional research
centre at the University of Barcelona in
Spain (fantastic hosts at the recent
ERSA conference). Furthermore, there ismore news and information on the World
conference, also introduced by our
President in his welcome. Once again
we hope you enjoy the newsletter.
Eveline and Graham 5HJLRQDOVSHFLDOL]DWLRQDQG
WKHGULQNVLQGXVWU\  7KH
6FRWFK:KLVN\,QGXVWU\
Mike Danson and Geoff Whittam,
University of the West of Scotland

Scotland is blessed with a number of
iconic cultural symbols which arerecognisable across the globe: tartan,kilts, and, of course, Scotch Whisky
being but the leading examples. They
are at the core of promotion strategies,
whether it be in the marketing
campaigns of ‘Scotland the Brand’or of the Scottish tourist authorities(VisitScotland) (Burnett and Danson,2004). There have been some criticismsin these being used as a key component
in attracting inward investment ineconomic development strategies. But,in the case of Scotch Whisky inparticular, behind the imagery there is apirs_20112.indd 3

truly massive industry with a genuine
worldwide market reach. With sales inexcess of £3.5bn into more than 200
countries, different stages of the
production process located across thecountry, and as the basis for an
unrivalled drinks cluster, this is a sector
worthy of detailed analysis. A decadeago we were commissioned jointly by
the trades unions and the trade body forthe employers, the Scotch Whisky
Association, to undertake a study of thecurrent and future prospects for theindustry. This article is based upon that
research of Roper et al 2006, which wasboth well received and generated
invitations to submit evidence to thelower chamber of the UK Parliament, theHouse of Commons, and to present atconferences and to publish academic
papers (see references below).
The essential spirit of Scotland is
captured by Scotch Whisky: malt whisky(the traditional form of this uisge beatha
Scots Gaelic for the “water of life”) is
distilled in the Highlands and Islands,
matured and bottled in the Lowlands,
and consumed throughout the world.
Scotch Whisky is the mainstay of many
communities throughout Scotland.
Fragile rural areas in the north and west
depend on a few jobs in scatteredproduction sites and signiﬁcant
employment is provided in the bottlingplants of the central belt. Most (about90%) Scotch Whisky consumed now has
a grain whisky base with a mixture ofmalts added, and these grain whiskies
are produced in the central belt of
Scotland. Work is provided at several
stages of the production process:distillation, maturation, blending, bottling,
packaging, distributing and marketing.
Growing from little more than a cottage
industry at the end of the C19th century,
Scotch Whisky is now a sector
dominated by massive multinational
corporations producing integrated
operations, which link plants andactivities throughout the whole of

10/27/2011 11:19:07 AM

Scotland. At the same time, muchsmaller companies, some still private,continue to be active in the industry.

substantial capital to fund maturing
stocks and stability in the market to beable to realize past production decisions.

Bowmore Distillery, Islay
A dram of malt whisky

The industry impacts on many
communities and suppliers acrossScotland through its linkages particularly
to agriculture, the utilities, packaging,
distribution and tourism, but also to
many other sectors.
After early resistance to Scotch malt
whisky, the use of Scotch grain whisky
to create more palatable blended drinks
has led to the establishment of a major
sector. In past years, helped andoccasionally hindered by such diverse
factors as problems in the vine crop, theperiod of prohibition in the USA, the riseand fall of the British Empire, the Scotch
Whisky industry has evolved into amature product and sector.
More than any other consumer product,
Scotch Whisky requires the long term
investment of capital over long periods(in order to secure the quality for which
it is famous, and to meet the regulatory
requirement which underpins it). While
it is important to recognise that theindustry does not wish to remove thematuration requirement, at the sametime it does mean, of course, that capitalis committed over long periods of time,
imposing peculiar economic costs on the
sector. By law, and the industry’s own
regulation, Scotch Whisky must wait
after the initial distilling to mature, a key
characteristic is the need for bothpirs_20112.indd 4

Whisky can be and is made elsewhere:
Japan, North America, the Republic of
Ireland and Northern Ireland. Whilst
Scotch Whisky outsells these and isdominant internationally, it is constantly
challenged by these alternative whiskies,
as well as by signiﬁcant trends infashionable drinks. Younger more
afﬂuent consumers in the UK have beenencouraged to start with lighter whitespirits, ready mixed drinks, designer
beers and wine.
That many of the larger producers in the
Scotch Whisky industry are in thesemarkets also, raises further concerns forthe sector. Conglomerates involved inseveral of these rival markets have thepotential to meet threats from suchcompetitors by shifting production
between spirits. Signiﬁcantly, however,the larger enterprises in the industry are
producers of a range of white spirits(e.g. gin, vodka, Bacardi, etc.), andmany of these activities are being
located progressively in Scotland.
Much of this movement is a recent
phenomenon, but has been a growing
feature of the industry in Scotland andbeyond. The deﬁnition of the Scotch
Whisky industry consists of the
manufacture of distilled, potable,
alcoholic beverages. These activities are

10/27/2011 11:19:08 AM

covered by class 15.91 of the Standard
Industrial Classiﬁcation of economic
activities (SIC(92)). This class includes
the production of other white spirits e.g.
vodka and gin, brandy, liqueurs, etc., but
the dominance of Scotch Whisky meansthat the vast majority of the output inclass 15.91 is accounted for by the
production of Scotch. This deﬁnition
includes other stages in the industry:
blending, bottling, packaging, andwarehousing, as well as the initial
distillation.
The Size of the Sector and the
Key Players
Having evolved from the cottage industryof the late 1800s through an ongoingseries of mergers and take-overs, theScotch Whisky industry displays somenotable characteristics. Not least ofthese are the dominance of a relatively
few players, the vitality of the medium
range of producers with their own
integrated production and marketing
operations, and the survival of acompetitive fringe – able to purchase
Scotch Whisky direct from the distilleries
and blend and bottle their product totheir own recipe. A web of intricate
interdependencies between different
stages of production and different
players underpins the healthy state ofcompetition in the industry.
A measure of this concentration ten
years ago was that three major players
then – Diageo, Allied-Domecq and
Pernod-Ricord – controlled about 80 per
cent of all Scotch Whisky production,with the second level of companies –including Highland Distillers,Whyte & Mackay, William Grant andGlenmorangie – contributing a further 10
per cent. While Allied-Domecq withdrew,
Diageo now accounts for about 34%,
Pernod-Ricord lies in second place, andthe largest independent, William Grant,
produces 10.4% of total Scotch output.
The pre-eminent position of the big two
suggests an industry under a potential

pirs_20112.indd 5

threat of duopoly pricing and output
decision-making, with production
collectively reduced to maximise proﬁts.
The conduct and performance of thesector is critical, therefore, in guarding
against this and yet there is a need formuch more objective and non-partisan
research and commentary than iscurrently available.
The latest ﬁgures available from theindustry, (Verso 2010), show that theindustry directly employs over 10,000
people and generates a gross income ofover £464 million contributing a Gross
Added value (GAV) of £2.7 billion to the
Scottish economy. Furthermore it has
been estimated that the industry
supports in excess of 34,000 jobs inother sectors. Whilst employment within
the industry in Scotland has declined by
3% over the last decade there has beena decrease in employment within theindustry outwith Scotland of 12%. The
industry within Scotland has witnessed
an increase in employment in sales andmarketing, engineering, visitor centres
and by-products with a decline indistilleries, blending and bottling. Latest
ﬁgures show exports growing by 22% in
the ﬁrst half of 2011 to £1.8bn with the
USA still the leading market, followed
by France. Emerging economies are
fuelling much of the expansion indemand in recent years with South
Korea, Brazil, Central and Latin America,and Asia all seeing strong growth ofover 33% per year and by more thanhalf in several cases.
The increase in employment within
visitor centres signiﬁes the close links
between the whisky industry and tourism
sectors. There are now 52 whisky
centres and distilleries which are open
to the public and it was estimated thatthey attracted over 1.3 million visitors in2010 with a spend of over £26 million(4-consulting 2011). The centres employ
directly 460 people with an estimatedindirect employment count of a further
180. Additionally it is argued that the

10/27/2011 11:19:08 AM

distilleries with visitor centres act as a‘cluster’ for other sectors notably sportand recreational leading to further
employment in term of, for example,
accommodation.
Whilst the imagery used to promotesales are primarily in terms of theHighlands and Islands of Scotland(Burnett and Danson, 2004), the majorityof the employment is within the urban
areas of Scotland, with Strathclyde
accounting for over 50% of direct
employment in the industry. In contrast
the Highland region accounts forapproximately 5%. However, given thefragile nature of the Highland communitya small number of jobs within a distillery
constitutes a signiﬁcant amount.

spirits have also moved to be bottled
and produced in Scotland. Malibu (madefrom coconuts), London’s Gordon Gin,many vodkas and other white spirits are
therefore made in Scotland – a bottlingglen cluster has been created to the
beneﬁt of the MNEs, the UK Chancellor
and to an extent the Scottish economy.

Isle of Eigg – now owned by the communityand potential location for new communitymanaged malt distillery.

Morar in ‘Rough Country’ in West Highlands,
typical of areas where whisky traditionallyproduced in former times.

The fairly rapid transmission of
ﬂuctuations in demand to current
production are a characteristic of the
Scotch Whisky industry. This is
surprising given the long lead-time
between the initial distilling and the ﬁnal
sale; this suggests that optimistic market
forecasts, past overproduction andexcess capacity are signiﬁcant factors inthis reaction also.
The concentration of production in thehands of two multi-national and multiproduct enterprises, coupled with thelegal requirement to distil Scotch in
Scotland, means that with massive
outputs to be bottled here their otherpirs_20112.indd 6

In concluding our initial report a decadeago, we speculated on various
developments challenging the Scotch
Whisky industry. One issue we identiﬁed
was that both the UK Exchequer and the
MNE duopoly gained very large taxes /duties and proﬁts respectively from thisdomination. Scotland, in a UK with asigniﬁcant degree of devolved powers
but excluding ﬁscal responsibilities,
could gain markedly from a move tore-open and re-energise the traditional‘craft-based’ distilleries of the Highlands& Islands at the expense of the mass
grain production units in the Lowlands.
For an independent Scotland, a balance
between the current cash cow and thelatter strategy would likely offer a better
future, improving backward linkages into
the local and regional economies of thenation.
To enter into a discourse into suchmatters we strongly recommend you toreview the arguments of product quality
by visiting any bar in the world andasking the staff about the whiskies

10/27/2011 11:19:08 AM

available. Deepening the relationshipbetween product, place and consumer
will not come from the large MNEs, but
pressure from you can but help.
Slàinte!
References
Burnett, K. and Danson, M. (2004) ‘Adding or
subtracting value? Constructions of rurality
and Scottish quality food promotion’,International Journal of Entrepreneurial
Behaviour Research, 10(6), 384–403.
Danson, M. and Whittam, G. (2001) ‘Powerand the spirit of clustering’, European
Planning Studies, 9 (8), 949–963.
Danson, M. and Whittam, G. (2001)
Appendix 27, The Drinks Industry in
Scotland, First Report, HC 324, http://www.
parliament.the-stationery-ofﬁce.co.uk/pa/
cm200102/cmselect/cmscotaf/324/
324ap05.htm
Danson, M. and Whittam, G. (2000)
Appendix 1, Memorandum from Professor
Mike Danson and Geoff Whittam,
University of Paisley, Select Committee on
Scottish Affairs, http://www.publications.
parliament.uk/pa/cm200001/cmselect/
cmscotaf/114/ap/11402.htm
Roper, S., Love, J., Cooke, P. and Clifton, N.
(2006) The Scottish Innovation System:
Actors, Roles and Actions, http://www.
scotland.gov.uk/Publications/2006/01/
18151934/7
http://www.scotch-whisky.org.uk/swa/ﬁles/EconomicImpactReportMay2010.pdf

 1HZVDQG5HFHQW(YHQWV 56$,VXPPHUVFKRROTomaz Dentinho,
University of
the Azores

Regional Development organized a
Summer Course, with the theme
Regional and Urban Economics, Theory,
Analysis and Operational Models, thatwas held in Terceira from the 13th–21stof June 2011, Azores, Portugal.
The goal of the Summer Course was toprovide PhD-students and young
researchers with:• Advanced training in regional andurban economics,• An opportunity to present and discuss
their research,• Improved skills and knowledge toadvance their careers as researchers.
The summer course took place alongten highly focused and intense days ofadvanced training, student presentations
and discussion, and discussion of career
strategies. It also included a study visit
to another island thus completing theunique experience of the summer
course!
The summer course was focused on theissue Regional and Urban Economics,
Theory, Analysis and Operational
Models, using a format of combined
lectures and hands on training provided
by top-level experts. Participants wereselected by the scientiﬁc committee
primarily taking into account theirresearch experience in one or more of
the topics of the summer course andtheir motivations for participation in theSummer Course (extended abstract) interms of career aspirations. There were
40 applicants and a ﬁnal selectionof 21 students from 10 countries. The
lecturers consisted of well-known
researchers from all over the world,such as Henk Folmer, Mark Partridge,
Alessandra Faggian, Ping Wang,
Eduardo Haddad and Jose Pedro
Pontes.

The Regional
Science Association
International and thePortuguese
Association forpirs_20112.indd 7

10/27/2011 11:19:08 AM

imposed a lot of extra work on theorganisation team to make goodﬁnancial resources and avoid any
important shortages.

Tomaz Dentinho (left) with the course
delegates

The evaluation of the summer school
indicated that the students liked theorganization of the course, the diverse
subjects, the quality of the lectures
and the discussion of their own draft
papers in the session “How to publish
a paper”.
The RSAI looks forward to helping
promote more summer schools in the
future – watch this space!

In our mind, logistic and ﬁnancial issues
were always conditioned to our main
objective: the academic excellence ofthe conference. Top keynote speakers
came to Barcelona: Richard Florida,
Diego Puga, Maryanne Feldman, David
Audretsch and Piet Rietveld. We also
had a plenary lecture with theCommissioner of Regional policy of theEuropean Commission, Dr Johannes
Hahn, who was accompanied by
Joaquim Oliveira-Martins (OECD) andLuis Espadas (Spanish Ministry of
Economy and Finance), giving an
unforgettable discussion on the future of
the European Structural Funds. The
conference also enjoyed the presence ofthe Major of Barcelona, the Regional
minister of Finance, the Vice-presidentof Spain, and the president of theEuropean Investment Bank.

 (56$
Jordi Suriñach and Vincente Royuela,
University of Barcelona

High attendance rates during the plenary
sessions

The 51st ERSA conference held inBarcelona, Spain, 30st August – 3rd
September achieved all its goals: around1000 registered participants, from 50
countries, 220 parallel sessions, 50
special sessions, good food, a niceatmosphere and even a football match.
This successful event took place in atime of great ﬁnancial restrictions, whichpirs_20112.indd 8

The highest academic quality wasachieved during every minute of theconference. It was thanks to alldelegates who sent their best papers
and made impressive presentations of
their work. In addition, this year the
ERSA conference highlighted in the
program, and at the venue, some ‘Very
Special Sessions’, with a fantastic panelof high level academics. Finally we also

10/27/2011 11:19:09 AM

welcomed the meeting of the Urban
Economics Association, which wasfor the ﬁrst time organised in Europe,and a high level session labelled The
New Urban World, which ran over
one full day with a superb panel of
speakers.

which allowed the growth of total assets(Figure 2). Since 2009, receipts havegrown less than payments creating anegative margin that reached £11000 in
2011; therefore total assets also
decreased.

RSAI Current Accounts 2004-2011 in £
40000
30000
20000
10000
0
-10000-20000
2002

2004

2006

Current Recepts

Piet Rietveld during his EIB-ERSA prize
speechThe social program of the conference
included a reception at the Royal Palace
and the Gala Dinner at the National
Museum of Arts of Catalonia, the best
location to end, according to manydelegates who approached us: all in all,a terriﬁc end to the conference.
Finally, if you want to remember the
conference of Barcelona, we invite you
to see the videos of all plenary sessions
at the conference website: http://www.
ersa.org/ersa-congress/: more than 15hours of the best regional science andurban economics!

 56$,KLVWRULFDODFFRXQWVTomaz Ponce Dentinho, RSAI Executive
Director
RSAI historical accounts from 2004–
2011 (Figure 1) show that Receipts andPayments grew in nominal terms
between 2004 and 2009 when theyreached around £35000 (UK) per year.
During these years we can note thatreceipts grew faster than payments,

pirs_20112.indd 9

2008

2010

2012

Current Payments

Current Margin

Fig. 1. RSAI Current Accounts from2004–2011

RSAI Total Assets from 2004-2011 in £200000150000100000
50000
0
2002

2004

2006

2008

2010

2012

Total Assets

Fig. 2. RSAI Total Assets from 2004–2011

Figure 3 shows the evolution of thestructure of RSAI Current Payments.
In 2010 our two journals RSPP andPIRS represented more than 55% of thetotal expenditure; Accounts, Newsletter,
Web and Management 36%; andsupport to new sections 9%. In 2011
RSPP and PIRS will represent morethan 57% of the total expenditure;
Accounts, Newsletter, Web andManagement 24%; and support to new
sections 20%.

10/27/2011 11:19:09 AM

Evolution of Current Payments
40000
Supports
Pounds

30000
RSPP

20000

PIRS

10000
0
2008

2009

2010

2011

Fig. 3. Structure of RSAI Current Payments

The RSAI council hopes that as themembership increases further therevenues will increase as well. Also,
the more successful the journals thegreater we expect the revenue stream
to be.

 0HHWWKHIHOORZV7VFKDQJKR-RKQ.LP
Endowed Professor of Urban andRegional Systems at University of Illinois
at Urbana-Champaign (UIUC)
I began myeducation in
my native
South
Korea inArchitecturalEngineering,studied
Urban
Design at
MeistershulefürArchitekture,
Akademieder Bildenden Künste in Vienna, Austria,
and completed graduate study inplanning at Princeton University with aPh.D. degree in 1976.

pirs_20112.indd 10

I was ﬁrst introduced to Regional
Science by a colleague of mine, a Ph.D.
student at Princeton, who showed me
Walter Isard’s ‘Green Book’. The bookopened my eyes at the time when I was
struggling with searching for suitable
methods for solving urban and regional
problems. Luckily I met Professor
Edwin Mills who taught me economic
principles, which I integrated with
regional science methods. This was the
beginning of my wonderful career as aplanner, engineer and regional scientist,searching for strategies for solving
spatial settlement issues.
I am very proud of the career I havechosen following in my father’s footstep
as a university professor, having chosen
urban planning and regional science as
my main focus of discipline. I must havedone something good since my son
also has chosen to be an academic.
Equipped with socio-economic theories
based on engineering education andregional science methodologies, I have
had a wonderful career.
In addition to publishing 8 books, 140
journal articles, book chapters, andprofessional articles in the areas oftransportation planning, urban andregional development, global
urbanization, geographic information
systems, intelligent transportation
systems and location-based services,
I was fortunate to gain experiencein solving real-world problems. In
1979–80, I served as the project directorof the National Comprehensive
Transportation Study of Korea,
sponsored by the World Bank. I also
directed the Optimal Transport Sector
Development Project in Indonesia in
1990–1991. I have been an advisor to
the ArRiyadh Development Authority(ADA) in Saudi Arabia since 1994. I
have been a Fulbright Scholar toGermany (1986) and Senior Fulbright
Scholar to Korea (1994–1995).
Furthermore, I have served as
International Conference Coordinator of

10/27/2011 11:19:09 AM

the Regional Science Association(1988–1991); co-Editor of The Annals ofRegional Science for the period of
1994–2005; a member of Council,
Regional Science Association
International (2008–2010); and served
as President of the Western Regional
Science Association (2008–09).
My research contributions are intended
to advance both planning scholarshipand practice surrounding issues ofgrowth and change. As a regional
scientist, I have searched for theories
and methods that provide a frameworkfor developing and evaluating realistic
strategies for mitigating problems
caused by human settlements,
environmental degradation andeconomic growth in urban areas. Asa planner, I have been a strong
advocate for the practical side of theplanning profession. I have consistently
embraced opportunities to put myexpertise in the ﬁeld of urban planning
into practice. My current research focus
can be grouped in the following three
topics:Technologies and Cities
New technologies alter the physicalpossibilities of human settlement, as wellas the economic, cultural, and political
relations of everyday urban life. A great
deal of my current research has focusedon how new information technologies(IT)–the Internet, personal computers,
personal digital assistants, and wirelesscommunications–are transforming theworld as we know it and how thattransformation really takes shape inhuman settlements, particularly in urban
areas.
Transportation, Land Use andInfrastructure Protection
Early in my career as an urban plannerand a regional scientist, I became
convinced that the analysis oftransportation issues cannot be

pirs_20112.indd 11

separated from other urban and regional
activities. The majority of my researchon transportation has to do withsearching for fundamental causes andsolutions for transportation problems
stemming from land use, socio-economic
factors, and the modern lifestyles ofurban residents.
International Planning
According to the United Nations, theworld will need to build new cities and/or
expand existing cities to accommodate
about 1.6 billion additional urban
residents by 2030. This trend is theresult of many complex socio-economic
and political factors, and poses
unprecedented challenges to thefunctioning of cities and the quality oflife for urban dwellers. The resources
needed for accommodating new urban
dwellers will be enormous. Can we plansustainable future cities? With thisquestion in mind, I have collaborated
with scholars from various parts of
the world in implementing research
projects investigating population
and urban growth and change in
Saudi Arabia, Indonesia, China,
Korea, Sweden, Kenya, Poland andthe USA.
The basic question I address in myresearch has been “What would
be the major economic, social, andenvironmental implications, particularly inan urban context, in the event of speciﬁcchanges in technology and lifestyle?” I
am continually searching for improved
frameworks to apply to the formulation of
scenarios regarding sustainable urban
and regional development. At the sametime, it is my view that the potential toincrease the utility of living in urban
areas while simultaneously facilitating
environmental sustainability depends not
only on planning, economic instruments,
and new technologies, but also upon
education and the cooperation of
citizens through changes in theirlifestyles.

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it involves the use of aromatic plants
and herbs such as coriander, cloves,angelica root, licorice, mint, wintergreen,
fennel, hazelnut and even cinnamon andlime blossom (greekproducts.com,
2011).

Dimitris Kavroudakis (University of the
Aegean, Greece) and Dimitris Ballas(University of Shefﬁeld, UK)

Fig. 1. Painting from café Ermis in Mytilini,
Lesvos (source: Barrett, 1998a)“When you have no money, come anddrink. And when you have come andpay; But when you have and don’t pay,
don’t come and drink.”(Michalis Viglatzis’s coffee shop Aghiasos,
Lesvos; quote taken from Greek islands,
2011)

Ouzo is the quintessential Greek drink
and a symbol of Greek culture andattitude towards life. Its status as thenational drink of Greece is validated by
the European Union, which recognises
ouzo as a trademark label with aprotected designation of origin. The storyof ouzo – even the origins of its name– is steeped in legend; a tradition ofanise alcoholic beverages that dates
back to Babylonia and ancient
Mediterranean history, creative medievalmonks in Mount Athos, the appreciative
remarks of an Ottoman consulate
physician, the return of the Greek
diaspora to a liberated country in the
19th century and secret family recipes
are all parts of the puzzle (Vekris, 2008;
Tonutti and Liddle, 2010; Tsachaki et al.,2010). The production of ouzo is not justthe mixture of anise, water and alcohol;

pirs_20112.indd 12

Ouzo has earned its place as a foodaccompaniment, much like beer andwine, and it is the perfect drink toenhance the ﬂavours of many Greek
dishes, particularly seafood and salted
or smoked delicacies. Its alcohol content
ranges from about 37% to 46% – so it is
not as strong as it is perceived – and it
is clear in colour. The ouzo effect,
contrary to common belief that thedrinker blanks out and then thinks hehas been abducted by aliens (see Matt
Barrett’s experience, which did not put
him off a lifelong appreciation of good
ouzo, Barrett, 1998c), is that it turns acloudy white when water or ice is added.
The reason is that anethole, one of theingredients of anise, is not soluble inwater and therefore chemicallyseparates from anise creating anemulsion whose droplets scatter the light(Carteau et al., 2008).
According to some sources, anestimated 30 million bottles are
consumed in Greece every year and an
additional 10 million are exported(KETA-BA, 2009). Naturally, ouzo is avery important product in a number of

10/27/2011 11:19:10 AM

Fig. 2. The location of Lesvos Island

local economies across Greece (for an
on-line map see Vekris, 2008) and it is
one of the key main products of theNorthern Aegean island region, together
with ﬁsh and sea food, mastiha, wine,
olive oil and cheese (Kalogridis, 2007;
Vakoufaris, et al., 2007). It is especially
important for the island of Lesvos (seeFigure 2) which produces most of thetotal ouzo production in Greece; it istherefore not surprising that the island isoften described as the homeland of ouzo
and as the ouzo capital of the world,both in terms of the quantity produced
as well as quality (KETA-BA, 2009;
Taylor, 2004; Barrett, 1998a).
This article provides a brief overview ofthe local economy of Lesvos, the ouzo
capital of the world, and also maps theindustry of ouzo on the island.

renowned for its rich and diverse
architectural and cultural heritage, is aregional administrative and economic
centre and also the home of the main
campus of the University of the Aegean.

Fig. 3. Mytilini, the capital of the island(source: http://el.wikipedia.org/)

The island economy of Lesvos
Lesvos is the third largest island in the
Aegean Sea (after Crete and Evia) witha total area of 1,632 square kilometres
and a population of about 90,000.
Around 40% live in the capital Mytilini(Athanasiadou, 2009; Kizos andKoulouri, 2006). Mytilini, which is built
amphitheatrically upon seven hills and ispirs_20112.indd 13

Agriculture has traditionally been the key
sector in the island’s economy with olive
cultivation being particularly importantsince the 19th century. But, over the
recent decades there has been a
considerable reduction in the number offarms (Kizos et al., 2009). It has often
been argued that the distance from the

10/27/2011 11:19:10 AM

Greek mainland had been a major
obstacle in its economic development,
contributing to the island lagging behind
the Greek average in the period
between 1950–1970 (Chamber of
Lesvos, 2011). Nevertheless, this has
been changing since the 1970s, due tothe modernisation of ferryboat and airtransport connections and the massive
extension and enhancement of suchtransport links between Mytilini andmainland Greece (especially Athens and
Thessaloniki). In addition, the economyof the island has been diversifying with
the importance of the service sector(and especially tourism) growing
massively. It is interesting to note that ina relatively recent comparative study
between British and Greek islands,
Lesvos was placed in a cluster ofislands labelled as “accessible,
successful and diversiﬁed” (Armstrong
et al., 2006).
The island of Lesvos has become a very
popular tourism destination. There is an
estimated number of over 10,000
tourists arriving by direct charter ﬂights
every year over the last 5 years fromacross Europe (Manavis, 2011). This isin addition to domestic tourism andinternational tourists arriving byscheduled ferry or air via mainland
Greece. Nevertheless, the island is
described in a popular travel website as“virtually unaffected by the mass tourism
that has turned other islands intoamusement parks” and as “the perfectplace to visit for people who want toexperience the real Greece” (Barrett,1998b).
It is also noteworthy that, despite
the decline in the number of farms
mentioned above, agriculture remains avery important sector of the economy,in terms of the jobs and incomes it
provides, especially in the more rural
areas of the island (Kizos et al., 2009).
As Kizos et al. (2009: 201) point out, the2001 agricultural census “recorded
14,375 olive farms (95% of the total

pirs_20112.indd 14

farms recorded on the island) covering
45% (38,951.8 ha) of the total Utilized
Agricultural Area (UAA) and roughly
30% of the total area of the island, and3,723 farms with grazing lands (23% of
total farms) covering 49.5% of the UAA,
grazed by roughly 300,000 sheep and44,000 goats (along with 7,000 cows)”. It
is also interesting to note that estimatesof the number of olive trees in the island
suggest that there are at least 8 million
olive trees, whereas some sources put
this ﬁgure as high as 11 million (Kizos
et al., 2009).
The ouzo industry in Lesvos
As seen in the previous section,
the economy of Lesvos has been
diversifying over the past decades, withservices and tourism in particular
growing in signiﬁcance, but with
agriculture also remaining very
important. In this section we explore theimpact and the geography of the ouzo
industry on the island.
As noted in the introduction, Lesvos isoften described as the ouzo capital of
the world. It has long been argued that
this may be due, to a great extent, to thesuitable climate of the island which isideal for the production of anise, a key
ingredient of ouzo (Lesvos Chamber,2011). In addition to the production ofhigh quality anise, the island boasts highquality grapes and aromatic plants,
which may have contributed to thedevelopment of a work ethic and long
tradition of constantly thriving to improve
the quality of the ouzo produced on theisland (Lesvos Chamber, 2011). Today
there are a considerable number of ouzo
producers in Lesvos Island continuing a
tradition dating back to the middle of the
19th century, when ouzo began to be
traded extensively in the Mediterranean.
We have collected information on theseproducers and created the map shownin Figure 4. It is interesting to note that
one of these producers has recently
been ranked as one of the largest 10

10/27/2011 11:19:10 AM

Fig. 4. Ouzo producers in Lesvos

Greek businesses (Lesvos Chamber,2011).
The Barbayiannis Museum of Ouzo in
Lesvos (2011) is a testament to theprominence of ouzo in the culture andeconomy of the island and their passion
for the production of the “ﬁnest Greek
liquor beverage” as they put it. This
museum is located in the town of
Plomari and is run by the Ouzo
Barbayiannis Liquor Distillery (which
produces 400 to 500 thousand litres ofouzo annually, personal communication).
Not surprisingly, ouzo is not only an
important export product of Lesvos, but
it also hugely popular with locals. It canalso be argued that the quality of theouzo, as well as the associated lifestyleand type of cafes and tavernas may be
one of the key tourist attractions of theisland. Figure 5 shows the estimatedspatial distribution of establishments
serving ouzo together with various mezedishes (Greek snack dishes) and otherfood.

pirs_20112.indd 15

Conclusions
This article has given a brief overview ofthe ouzo industry with a focus on a
Greek island for which the production ofouzo is particularly important. It can beargued that there is huge potential forthis industry to grow further and to
become an even more important sourceof revenue for the island of Lesvos,
especially with better marketing of the
product in Greece and across the world.
It has long been argued that the Greek
alcoholic and soft drinks industries may
be lagging behind in branding andmarketing compared to Western
multinational companies (e.g. see
Theodorakioglou and Wright, 1998) andtherefore there may be a lot of room for
improvement. In addition to the potential
for increased demand for this product in
Greece and worldwide, there are very
interesting cultural, lifestyle and local
food industry dimensions that are worth
exploring when looking at the future of
the ouzo industry.

10/27/2011 11:19:11 AM

Fig. 5. Spatial distribution of restaurants and cafes serving ouzo in Lesvos

Gazing at the inﬁnite blue of the Aegean
Sea enhances the experience but you
can appreciate ouzo anywhere. Just sip
slowly, enjoy your food and share withfriends. Geia mas!
Acknowledgments: We are very gratefulto Vicky Yiagopoulou who researchedand found a lot of the material uponwhich this article is based and who also
provided very useful comments.

References:
Armstrong, H, Ballas, D, Staines, A (2006), A
Comparative Analysis of the Economic
Performance of Greek and UK Small
Islands, paper presented at the 36th
Regional Science Association International(British and Irish Section) conference,
Jersey, Channel Islands, 16–18 August
2006
Athanasiadou, K M (2009), Socio-economic
indicators of quality of life of families in
Greek rural areas: the case of Mytilini
island, Dissertation project, Department ofHome Economics and Ecology, Harokopio

pirs_20112.indd 16

University of Athens, Athens 2009 (inGreek).
Barbayannis Ouzo Museum (2011), The
Museum, Available from: http://www.
barbayanni-ouzo.com/ouzo-museumlesvos.html, Accessed 11 October 2011
Barrett, M (1998a), Plomari, Lesvos, Ouzo
Capital of the World, Available from: http://
www.lesvos.com/plomari.html, Accessed
11 October 2011
Barrett, M (1998), Lesvos: more than justanother Greek island, Available from:http://www.lesvos.com/index.html,
Accessed 11 October 2011
Barrett, M (1998), Lesvos: A Guide toOuzo, Available from: http://www.lesvos.
com/ouzo.html, Accessed 11 October
2011
Carteau, D., Bassani, D. & Pianet, I., 2008.
The “Ouzo effect”: Following the
spontaneous emulsiﬁcation of transanethole in water by NMR. Comptes
rendus-Chimie, 11(4–5), p.493–498.
Christoph, N. & Bauer-Christoph, C., 2007.
10 Flavour of Spirit Drinks: Raw Materials,
Fermentation, Distillation, and Ageing.
Flavours and fragrances: chemistry,
bioprocessing and sustainability, p.219.

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Clauson, G., 1972. An etymologicaldictionary of pre-thirteenth-century Turkish,
Clarendon Press.
Greek Islands (2011), Ouzo, Available from:http://www.greek-islands.us/greek-food/ouzo, Accessed 11 October 2011
Greekproducts.com (2011), About ouzo,
Available from: http://greekproducts.com/
greekproducts/ouzo/index.html, Accessed
11 October 2011
Greek Statistical Agency, 2001 census ofPopulation. Available from: http://www.
statistics.gr, Accessed 2 October 2011
KETA-BA (2009), Ouzo the drink of Greece,
Lesvos the homeland of Ouzo, available
from: http://keta-ba.gr/ﬁles/ouzo.pdf,
Accessed 11 October 2011 (in Greek andEnglish)Kalogridis, T (2007), North Aegean
Exportable Goods, KETA-BA, available
from: http://keta-ba.gr/fylladia/eksagogima.
pdf, (in Greek, German and English)
Kizos, T, Dalaka, A, Petanidou, T (2009),
Farmers’ attitudes and landscape change:
evidence from the abandonment ofterraced cultivations on Lesvos, Greece,
Agriculture and Human Values, vol. 27, pp.
199–212
Kizos, T, Koulouri, M (2006), Agriculturallandscape dynamics in the Mediterranean:
Lesvos (Greece) case study using
evidence from the last three centuries,
Environmental Science & Policy, Vol 9, pp.
330–342
Lesvos Chamber, 2011. The Economy of
Lesvos Available from: http://en.lesvoschamber.com [Accessed October 6, 2011].
Manavis, N (2011), Tourismos ora miden,
available from: http://www.emprosnet.gr/
Economy/?EntityID=c640bfbf-98ed-40a6afa6-9261657aaf36 (in Greek) [Accessed
October 11, 2011]
Taylor, L (2004), Ouzo, Trade and Culture,
TED Case Studies, no. 723, http://www1.
american.edu/TED/ouzo.htm
Theodorakioglou, F,Wright L T (1998),
Marketing strategies of Greek and foreignﬁrms compared, Qualitative Market
Research: An International Journal, vol. 1
pp. 145–155
Tonuti, I, Liddle, P (2010), Aromatic plants inalcoholic beverages. A review. Flavour
Fragr. J., 25, pp. 341–350
Tsachaki, M, Arnaoutopoulou, A P,
Margomenou, L, Roubedakis, S C,

pirs_20112.indd 17

Zabetakis, I (2010), Development of asuitable lexicon for sensory studies of theanise-ﬂavoured spirits ouzo and tsipouro,
Flavour Fragr. J., 25, pp. 468–474
Vakoufaris, H, Spilanis, I, Kizos, T (2007),
Collective action in the Greek agrifood
sector: evidence from the North Aegean
region, British Food Journal, Vol. 109,
pp.777–791
Vekris, C (2008), tsou.greece: a web-site
dedicated to ouzo and its producers,
available from: http://tsou.gr/documents/40.
html, Accessed 11 October 2011 56$,SUL]HZLQQHUDavid Boyce (left) presents the latest fellow
award to Gordon Mulligan, Professor
Emeretus, University of Arizona.
Congratulations Gordon!

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7KH5HJLRQDO4XDQWLWDWLYH$QDO\VLV $45,5($ IURPWKH8QLYHUVLW\RI%DUFHORQD
The Regional Quantitative Analysis
Centre (AQR-IREA), at the University ofBarcelona, is located in the Departmentof Econometrics, Statistics and Spanish
Economy at the University of Barcelona(Spain). The main research activity of

10/27/2011 11:19:11 AM

the group is focused in Applied
Economics, with a special emphasis on
the analysis of urban and regional
issues.
The Regional Quantitative Analysis
Centre (AQR), is directed by ManuelArtís, and has two coordinators, Enrique
López-Bazo for research topics, andJordi Suriñach for knowledge transfer
issues. Jordi Suriñach is also presidentof the Catalan Association of Regional
Science and director of the ResearchInstitute of Applied Economics (IREA), a
centre integrated with AQR. The group
has more than forty Spanish andinternational researchers and twenty
years of experience, and has beenrecognized by the Generalitat deCatalunya (the regional government) asa group of quality and excellence ineconomic research.
In terms of publications, according to
RePEc, AQR-IREA is in the top 5% inSpain and top 10% in Europe of all
research institutions among all ﬁelds of
Economics, and 7 of their researchers
are among the top 25% economists in
Spain. According to Florax and Plane(PRS, 2004) Barcelona was ﬁrst ranked
in Regional Science during the 1995–
2004 decade. AQR-IREA members werebehind that position. Together with theboard of directors, it is worth alsomentioning other researchers integrated
in AQR-IREA such as Josep Lluís
Carrión-i-Silvestre, Rosina Moreno, Raul
Ramos, Peter Claeys and Vicente
Royuela. This academic excellence has
been achieved working in a wide list of
topics. We can mention those of
economic growth and convergence,externalities, human capital, labour
market, knowledge economy, ﬁrm
location, ﬁrm demography and survival,
labour migration, macroeconomic
forecast, conjuncture analysis, anddevelopment of synthetic and strategic
indicators. In 2009 the group organised
the III world Spatial Econometrics and in2011 Jordi Suriñach and Vicente

pirs_20112.indd 18

Royuela were the President andCoordinator respectively of the Local
Organizing Committee of the 51st ERSA
Conference in Barcelona. In addition, thegroup organises annually a Workshop
on Regional and Urban Economics. The
2011 edition is focused on Inequality
and Regional Growth and Cohesion, andhosts keynote speakers José Enrique
Garcilazo and Andrés Rodriguez-Pose.
Finally, every term two seminar-series
for senior and junior researchers isdeveloped. In 2010 and 2011 a list of
top academics has presented inBarcelona, such as Mark Partridge,
Giuseppe Arbia, Alessandra Faggian,Frank Van Oort and M. Hashem
Pesaran among others.

The AQR-IREA research group

In addition, AQR-IREA works with public
institutions and private enterprises
developing projects within the scopeof its research interest. It leads the
SEARCH project within the 7th
Framework Programme, titled “The
Sharing KnowledgE Assets:
InteRregionally Cohesive
NeigHborhoods” (FP7-SSH-2010-2.21266834), with a total budget over 2.5
million . This project aims to improvethe understanding of institutionalframework conditions of the ENP
countries, their economic interactions
with the EU in terms of people, capital,
trade, knowledge, and innovation, inorder to improve future deﬁnition andimplementation of European

10/27/2011 11:19:11 AM

Neighbouring Policies taking into
account that “one size ﬁts all” policy
recommendations will not be appropriate
due to the bilateral nature of the
EU-ENP countries agreements.
Furthermore, AQR-IREA participates
as a partner in the ESPON 2013
programme, in the project titled KIT,
“Knowledge, Innovation and Territory”.
AQR tasks are devoted to the analysisof the sectoral dimension of innovation
at the national level, the analysis of theknowledge spread all over the economy(using data on inventors’ mobility) andthe impact the inventors’ mobility exerts
on the regional innovation capacity.
AQR-IREA has been involved in the 6th
and 7th Framework Programmes foryears. The group leaded the “Intangible
Assets and Regional Economic Growth”
project (www.iareg.org) and is an active
member of the “European Forecasting
Network” (www.efn.eui.eu). Also, AQRIREA leaded the ESF COST Action
titled “Small and Medium Enterprises,
Economic Development and Regional
Convergence in Europe”. AQR-IREA has
participated in 8 projects and Reports forthe DG ECFIN in the last 10 years andadvises the European Parliament on
Economic and Monetary issues. Finallythe research group is involved in a
number of research projects granted by
the Spanish Ministry of Science and
Education.
Between 2004 and 2011, 9 PhD
dissertations have been defended under
the supervision of researchers within thegroup. These dissertations have been
elaborated in the context of the PhD
Programme in Economics of the
University of Barcelona, which hasreceived a Quality mention from the
Spanish Ministry of Education. Usually a
number of research fellowships are
made available to graduates wishing towork with AQR-IREA research Group as
they develop their doctoral studies at the
University of Barcelona. Those Ph. D.
students have beneﬁted from thepirs_20112.indd 19

international contacts of AQR-IREA
derived from its participation in the
different networks where we are
involved, which has allowed them to joinhigh standard institutions all over
Europe. AQR-IREA also hosts visiting
researchers for short-term visits andeven for long-term stays through, forinstance, the Marie Curie Actions of theEuropean Union, or other mobility
programs ﬁnanced by the Catalan andSpanish Governments. In addition, thegroup recruits widely in the job market
from a range of international groups.
For more information, please contact
aqr@ub.edu or visit the AQR-IREA
website at http://www.pcb.ub.edu/aqr/
en/. You can also follow the researchgroup on Facebook (http://www.
facebook.com/Regional.Quantitative.
Analysis.Group) and Academia(http://barcelona.academia.edu/Regional
QuantitativeAnalysisResearchGroup).

 5HJLRQDOVSHFLDOL]DWLRQDQG
WKHGULQNVLQGXVWU\  6SDWLDO'LVWULEXWLRQDQG$JJORPHUDWLRQ(IIHFWVLQWKH-DSDQHVH)RRG
DQG'ULQNV,QGXVWU\Suminori Tokunaga, University ofTsukuba, Graduate School of Life andEnvironmental Sciences
From theagglomerationindex (γEG) of
Ellison and Glaeser(1997), we foundthat there are 20
Japanese food
sub-industries,
which are highly
agglomerated: see
Figure 1. Since the

10/27/2011 11:19:12 AM

location of the entire food industry isdetermined by the availability ofagricultural resources, we observethat agar-agar, wine and tea areconcentrated in the areas where ﬁrms
can have easy access to raw materials
and natural advantage, and ‘sugar’ islocated close to the harbour. These
industries are strongly agglomerated
compared to other manufacturers. The
pattern of agglomeration from 1985 to2000 shows that wine displays
decreasing agglomeration after 1985.
But, surprisingly, many highlyagglomerated sub-industries retained
their spatial distribution in spite of ageneral trend towards dispersal. In otherwords, agglomeration remains importantin the Japanese food industry. This
agglomeration index and shipment value(Y), on the whole, ﬂattened from 1985 to
2000, regardless of high and low

g EG

1985

contours. When we observe these
relationships by sub-industries, agaragar has an increasing trend towards
agglomeration from 1985 to 1995, but adecreasing trend in 2000.
For sugar, canned seafood andseaweed, and glucose, starch syrup andhigh-fructose corn syrup, there has beena downward trend. Miso, and soy sauce(shoyu), and manufactured ice seem toshow stable trends over the last 20
years. In the wine industry, the plants
concentrated in Yamanashi Prefecture
have seen decreased agglomerationfrom 1985 to 2000, but an increase in
shipment. In Japan, demand for wine
has been increasing rapidly on the
background of a wine boom and hence
the development of some new regionalsources of wine, such as the Hokkaido
and Nagano Prefecture.

1990

1995

2000

0.6
0.5
0.4
0.3
0.2

Elemental feeds

Manufactured ice

Tea

Distilled, rectified and blendedliquors

Rice wine "sake"Wine

StarchBaked rice confections

Glucose, starch and corn syrup

Sugar, except refined sugar

Soy sauce "shoyu" and edible amino acids

Fermented bean paste "miso"

Cannedand preserved fruit and vegetables

Miscellaneous seafood products

Frozen seafood products (processed)

Frozen seafood products (unprocessed)

Agaγ -agar

Processed seaweed

Cannedseafood and seaweed

0.0

Miscellaneous livestock products

0.1

Fig. 1. Agglomeration index for 20 Japanese food sub-industries (1985–2000).
Note: agglomeration index of Ellison and Glaeser(1997), Source: Akune and Tokunaga(2005).

pirs_20112.indd 20

10/27/2011 11:19:12 AM

Based on these ﬁndings, we estimated a
ﬂexible translog production function
using a 4-digit sub-classiﬁcation fromJapanese food industry panel data
(1985–2000). The translog production
function is:ln Y = α 0 + α k ln K + α l ln L +1
1
22
α m ln M + βkk (ln K ) + βll (ln L)
22
12+ βmm (ln M ) + β kl ln K ln L +2
βkm ln K ln M + βlm ln L ln M +12
δ a ln A + δ aa (ln A) + γ ka ln K
2
ln A + γ la ln L ln A + γ ma ln M ln A
The cost share equation is:Si =α i + ∑ j βij ln X j + γ iA A

∑ α + ∑ ∑ β ln X + ∑ γ A
i

j

ij

i

i

j

iA

i

where Y, K, L, E, M, A are output,
capital, labor, materials, agglomeration
respectively. In the cost share equation,
subscript i means input, and Si means
cost share of the ith input. X is the input
vector, that is, capital, labor, andmaterials. αi, βij, δa, δaa, γij are theparameters to be estimated. For
estimation, we try to test the following
cases: (1) impose no restriction, (2)homotheticity is imposed (∑jβij = 0),(3) homogeneity is imposed⎛⎞⎜⎝ ∑ α i = θ, ∑ βij = 0, ∑ γ iT = 0 ⎟⎠ .
i

ji

We carry out the estimation using theiterative nonlinear seemingly unrelated
regression method (SUR), as suggested
by Zellner (1962) taking serial correlation
into account.
Table 1 shows the three different model
speciﬁcation estimation results.
Monotonicity and convexity are satisﬁed
for each estimated function. According
to the results of the Wald test, thepirs_20112.indd 21

nonhomotheticity model is the mostfavorable. The results of thenonhomotheticity model show that
almost all estimated parameters are
signiﬁcant at the 1% or 5% level, except
for βKL. Furthermore, the sign conditionsof the parameters are theoreticallyappropriate.
Since the individual parameters are notreadily interpretable, we have calculated
the output elasticities of input, return toscale, and the agglomeration effect on
production. These results are shown
Table 2. First, we observe that output
elasticities of raw materials are muchlarger than the other two inputs and theelasticity of capital is low. Second, scaleeconomy is over 1 in all cases except in
the linear homogeneity model andsigniﬁcant at the 1% level. Third, theelasticity of agglomeration effects on
production is estimated at 0.023, again
signiﬁcant at the 1% level. We also
found that agglomeration in theJapanese food industry has a positiveeffect on production using the 4-digit
sub-classiﬁcation data. That is to say,our inﬂuential ﬁndings are that in theJapanese food industry, with theexistence of scale economies,
productivity increases around 2% whenplants agglomerate.
In other words, a positive circulation
linkage is generated through increasing
returns to scale arising from plants
included in the same sub-industry
choosing their location close to anotherin one particular area, and maintaining
plant agglomeration generates more spin
off production. Previous research about
productivity in the Japanese foodindustry tends to be focused ontechnical structure and changes, but wesuggest there is a need to include theconcept of ﬁrms’ location behavior into
the productivity analysis.

10/27/2011 11:19:12 AMpirs_20112.indd 22

10/27/2011 11:19:12 AM

216
0.973

0.980
0.048
0.064
0.097
0.007
0.005
0.007
0.005
0.005
0.004
0.064
0.007
0.003
0.003
0.004

−0.673
0.077
0.170
0.791
0.069
0.103
0.210
0.004
−0.068−0.123−0.1900.020
0.010−0.0020.016−0.686
1.591*
2.658***
8.159***
10.544***19.296***29.485***0.939−14.035***−28.869***−2.953***2.953***
4.021***−0.9374.111***

t-stat.

SampleAdj.R2

α0
αK
αL
αM
βKK
βLL
βMM
βKL
βKM
βLM
δA
δAA
γKA
γLA
γMA

Note: * signiﬁcant at 10% level, ** at 5% level, and *** at 1% level.

SampleAdj.R2

α0
αK
αL
αM
βKK
βLL
βMM
βKL
βKM
βLM
δA
δAA
γKA
γLA
γMA

S.E.

Estimate

Nonhomotheticity

Table 1. Estimation of a ﬂexible translog production function

216
0.974

0.647
0.046
0.049
0.043
0.006
0.005
0.006
0.004
0.004
0.004
0.058
0.007
0.002
0.003
0.004

S.E.
−2.956***1.568*
4.990***
21.805***12.889***18.702***35.100***0.634−16.217***−33.653***−2.074**2.819***
4.983***−1.1912.671***

t-stat.

SampleAdj.R2

α0
αK
αL
αM
βKK
βLL
βMM
βKL
βKM
βLM
δA
δAA
γKA
γLA
γMA

Source: Kageyama, Tokunaga, and Akune (2007).

−1.911
0.072
0.246
0.933
0.075
0.100
0.201
0.003
−0.072−0.123−0.121
0.020
0.012−0.0030.009

Estimate

Homotheticity−1.902
0.105
0.265
0.935
0.076
0.099
0.199
0.001
−0.074−0.123
0.076
0.011
0.009
−0.008−0.001

Estimate

216
0.973

0.636
0.045
0.051
0.043
0.006
0.006
0.006
0.004
0.004
0.004
0.021
0.007
0.002
0.002
0.002

S.E.

Homogeneity−2.989***2.332***
5.216***
21.810***13.409***17.424***34.809***0.155−16.927***−33.052***
3.546***
1.604*
3.928***−3.205***−0.566t-stat.

Table 2. Output elasticities, scale economies, and agglomeration effects (The case of γEG)
Estimate
Output elasticities
Capital
Labor
Materials
Returns to scale
Agglomeration effects
Output elasticities
Capital
Labor
Materials
Returns to scale
Agglomeration effects
Output elasticities
Capital
Labor
Materials
Returns to scale
Agglomeration effects

Nonhomotheticity
0.136
0.255
0.634
1.025
0.023
Homotheticity
0.134
0.255
0.637
1.026
0.027
Homogeneity
0.133
0.254
0.635
1.022
0.024

S.E.

t-stat.

0.003
0.007
0.010
0.003
0.003

40.2***
36.9***
61.7***
7.8***
8.4***

0.004
0.007
0.010
0.003
0.003

36.2***
36.8***
66.2***
8.4***
10.7***

0.004
0.007
0.009
0.002
0.002

36.3***
35.7***
68.4***
11.7***
16.2***

Note: * signiﬁcant at 10% level, ** at 5% level, and *** at 1% level. Source: Kageyama, Tokunaga,
and Akune (2007).

References
Akune, Y. and Tokunaga, S., “An Empirical
Analysis of the Industrial Agglomeration ofFood Industry from 1980 to 2000 (inJapanese)”, Studies in Regional Science,
2005, Vol.35 No.3, pp.625–635.
Ellison,G.,Glaeser,E.,L., “Geographic
Concentration in U.S.Manufacturing
Industries: A Dartboard Approach”, Journalof Political Economy,Vol.105, no5, 1997,
pp.898–927.
Kageyama, M., Tokunaga, S., “An Empirical
Analysis of an Agglomeration of Food
Industries Using an Index Proposed by
Devereux, Grifﬁth, and Simpson: The Caseof Tokyo Metropolitan Area in Japan”,
Studies in Regional Science, Vol. 35, No.2,
2005 pp.451–462.
Kageyama, M., Tokunaga, S. and Akune, Y.,“Agglomeration Effect on Production in theJapanese Food Industry (in Japanese)”,Studies in Regional Science, 2007, Vol.36
No.4, pp.909–920.

 )XWXUH(YHQWV 7KHWK:RUOG&RQIHUHQFH
Daniela L. Constantin, Academy of
Economic Studies of Bucharest
The Regional
Science Association
International jointlywith the RomanianRegional Science
Association andthe Faculty of
Economics andBusiness
Administration of theWest University ofTimisoara is organizing the 9th World
Congress of the RSAI on May 9–12,
2012 in Timisoara, Romania.
The main topic of the congress is“Changing Spatial Patterns in apirs_20112.indd 23

10/27/2011 11:19:12 AM

Globalizing World”, which is expected to
attract regional scientists from all over
the world interested in debates onthemes such as: Emerging challenges
for regional development; Vision andmanagement of sustainable cities; Ruraland local development; Accessibility,
infrastructure and regional economic
growth; Social capital and regional
development; Agglomeration, clusters,
congestion and policy; Learning fromfailures in European regional policy;
Crisis of public ﬁnances, Governanceand regional development; Globalization
and regional competitiveness; Crossborder cooperation and development;
Migration, cultural networks and regional
development; Social segregation poverty
and social policy; Spatial issues of thelabor market; Climate change andsustainable regional development;
Entrepreneurship, networks andinnovation; Innovation, knowledge
economy and regional development;
Geographical information systems andspatial analysis; Spatial econometrics;

New frontiers in regional science: theory
and methodology; Infrastructure,transports and communications; Landuse, real estate and housing markets;
Location studies; Tourism, culturalindustries and regional development;
Urban governance and cities
regeneration; Territorial marketing.
These themes will be the subject of bothordinary and special sessions.
The congress venue is the Regional
Business Centre in Timisoara, while theopening ceremony will be hosted by theTimisoara Opera House; one of thecity’s architectural landmarks.
Timisoara is a very attractive andprosperous city located in the Westernpart of Romania and an outstanding
example of inter-ethnical and crosscultural relationships between the
Romanians, Hungarians, Germans,
Serbs, Ukrainian, Russian, Turks, etc.
who are living together in this area. With
its marvelous baroque architecture,
Timisoara is also known as “the Rose
City” (May is the best month to enjoy it)
and it is surrounded by lots of vineyards
and exquisite natural parks. It is alsointernationally famous since it is this citythat launched the December 1989
Romanian revolution. Timisoara has very
good international transport connections
by plane, car and train.
Important deadline for the potential
participants in the 2012 World Congressof the RSAI are:• Abstract submission – November 21• Notiﬁcation of abstract acceptance –January 15• Payment of the reduced registration
fee January 31;• Paper submission – February 28.
More info can be found on the congress
webpage, www.rsai2012.uvt.ro
We are looking forward to welcoming
you to Timisoara, Romania, in May
2012!

pirs_20112.indd 24

10/27/2011 11:19:12 AM :56$$QQXDO0HHWLQJLQ+DZDLL
The Western Regional Science
Association will hold its 51st Annual
Meeting in Kauai, Hawaii, February
8–11, 2012. Plan now to be part of what
is sure to be a productive, enjoyable,
and very international conference. Alongwith a truly excellent location, the WRSA
meeting will feature, as usual, its
signature 45-minute paper slots, which
include time for assigned discussantremarks and open discussion. WRSA
meetings are a great venue for feedback
on research!
WRSA accepts submissions for the
meeting program based on complete
papers, not abstracts. Papers may be indraft form at the time of submission solong as ﬁnal versions are submitted by
the end of the year. To submit a paper,
simply email the ﬁle to wrsa@brown.
edu. The extended deadline for paper
submissions is November 14, 2011.

pirs_20112.indd 25

Further meeting information is available
on the WRSA website (www.wrsa.info).
If you have questions about the meeting,feel free to email Rachel Franklin(rachel_franklin@brown.edu).
The WRSA’s unofﬁcial motto is “Theway academic life should be.” Comeﬁnd out what keeps WRSA meeting
attendees coming back year after year!

 1H[WLVVXH
The theme of the next issue will be‘Disasters and Regional Science’.
Please send any contributions directly to
Eveline van Leeuwen e.s.van.leeuwen@
vu.nl or Graham Clarke G.P.Clarke@
Leeds.ac.uk.

10/27/2011 11:19:13 AM