R12

Size and Spatial Distributions of Regional Economic Activity

Spatial Externalities, Openness and Financial Development in SADC: Beyond the Multilateral Monetary Agreement

This study empirically evaluates spatial externalities in financial development in SADC in line with spatial proximity theory, which asserts that externalities increase with proximity. Precisely, the study tests if financially less developed economies in SADC benefit from linkages with and proximity to South Africa, a financially developed economy. The Spatial Durbin Model estimated using GMM and Dynamic Panel Estimations, establishes that financial development in the SADC region is sensitive to space and hence not immune to spatial externalities.

Buyer-Seller Relationships in International Trade: Do Your Neighbors Matter?

Using confidential U.S. customs data on trade transactions between U.S. importers and Bangladeshi exporters between 2002 and 2009, and information on the geographic location of Bangladeshi exporters, we show that the presence of neighboring exporters that previously transacted with a U.S. importer is associated with a greater likelihood of matching with the same U.S. importer for the first time. This suggests a role for business networks among trading firms in generating exporter-importer matches.

The spatial persistence of population and wealth during apartheid: comparing the 1911 and 2011 censuses

This article examines the spatial distribution of people and wealth in South Africa over the period 1911 to 2011. Economic development is typically characterised by agglomeration, but Apartheid policies tried to separate people and disperse economic activity. Zipf’s Law is used to examine the balance of these forces. The results show that Apartheid’s interventions could not stop agglomeration, which seems to have continued to the point of over-concentration today. Wealth has become increasingly concentrated in places of initial white settlement and the large urban agglomerations.

Do rent-seeking and interregional transfers contribute to urban primacy in sub-Saharan Africa?

We develop an economic geography model where mobile skilled workers choose to either work in a production sector or to become part of an unproductive elite. The elite sets income tax rates to maximize its own welfare by extracting rents, thereby influencing the spatial structure of the economy and changing the available range of consumption goods. We show that either unskilled labor mobility, or rent-seeking behavior, or both, are likely to favor the occurence of agglomeration and of urban primacy.

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