Transport provision has a clear relationship to regional economic performance. Since transport is typically provided in a regulated market it is important to understand the ways in which the regulatory regimes can affect the efficient provision of transport. This paper explores ways in which the differential regulation of transport by regional authorities can affect the relative economic performance of regions. The basic hypothesis to be assessed is whether under competing regulatory regimes regions will tend to under-invest or over-invest in their transport provision. In this paper we develop a simple model of regulatory competition in a multi-agency world. The analysis demonstrates how regulatory conflicts can lead to inefficiencies which impact not just on the provision of transport services, but also on the potential wider benefits from transport, most notably labour market efficiency and productivity growth. In some cases this may result in regions over-investing in transport in an attempt to seek competitive advantage; in other cases they may under-invest seeking to benefit from spillovers from the level of investment in neighbouring regions. The paper concludes with a discussion of policy implications and alternatives.
Proposed by OECDin its Territorial Outlook (2001) and recently re-launched by DG Regio of the Commission of the European Union, the new concept of territorial capital deserves a closer inspection, mainly regarding its components and economic meaning. This paper suggests a theoretical interpretation of this new concept and provides an empirical measure of its role on regional growth in the near future. The empirical analysis is applied to all 259 NUTS2 regions of the 27 European countries using an original forecasting macro-econometric regional growth model, called MASST. The empirical analysis clearly demonstrates that in those regions where territorial capital assets play an important role on regional growth, the overall performance of the regions is higher. Moreover, it clearly demonstrates that territorial capital, as all production factors, is subject to strong decreasing returns to scale: in fact, in those regions in which the level of territorial capital is higher, its effects on regional growth are more contained.
In recent decades, the world economy has undergone major changes, particularly with regard to trade and foreign direct investment. In view of this evolution, we need to review some basic assumptions of international economics. According to models based on the Heckscher-Ohlin-Samuelson seminal contribution, trade and foreign direct investment are taken as substitutes. Nevertheless this is not consensual. The purpose of this paper is thus to examine the links between trade and foreign direct investment through a gravitational model in the context of the present-day world economy. In the model, the explanatory variables of trade are the physical distances between countries, as proxy to transaction costs, their incomes, dummies for each country and standardized indicators of foreign investment attractiveness. The parameters to be estimated are the distance attrition, the coefficients associated with the foreign investment, and the dummies' coefficients, which can be seen as extra costs or benefits attributable to each country that are not explicit in the physical distance. Taking into account our findings, which favor the argument of substitutability, we draw some conclusions about the relationship between trade and foreign direct investment, with the aim of contributing to the ongoing theoretical debate.
Economists generally pay little attention to the effects of liberal trade policies on the internal geography of countries. This paper presents a fully operational interstate CGE model implemented for the Brazilian economy that examines how the distribution of economic activity may change as the country opens up to foreign trade. Among the distinctive features embedded in the model, modeling of scale economies, port efficiency and land-maritime transport costs provides an innovative way of dealing explicitly with theoretical issues related to integrated regional systems. In order to illustrate the role played by the quality of infrastructure and geography on the country's foreign and interregional trade performance, a set of simulations are presented where import barriers are significantly reduced. The relative importance of import tariffs, port efficiency and maritime transport costs for the country trade relations and regional growth is then detailed and quantified. A final set of simulations shed some light on the spatial effects of scale economies, where the manufacturing sector in the state of São Paulo, taken as the core of industrial activity in the country, is subjected to different levels of increasing returns to scale at the firm level. Core-periphery effects are then traced out suggesting the prevalence of agglomeration forces over diversion forces could rather exacerbate regional inequality as import barriers are removed up to a certain level. Further removals can reverse this balance in favor of diversion forces, implying de-concentration of economic activity, a result quite in line with recent advances in New Economic Geography models.
European spatial development policy supports a transnational polycentric urban development and development of new global integration zones to accelerate job creation and decrease inequalities. In this context, Southeastern European Space (SES) is a potential global integration zone as proposed by Mehlbye. It is one of the most problematic areas in Europe due to high regional inequalities, structural problems and spatial integration. While the European Union's (EU) spatial development policy supports transnational and cross-border cooperation in the SES, Turkey's involvement has been problematic. In the current 2007-2013 period, Turkey not only faces the challenge of EU membership, but also the challenge to integrate to the SES. We first take a brief look at regional development in SES after year 2000. Metropolitan and few smaller regions continue to grow, contributing to decreasing international inequalities in SES, but intra-country inequalities seem to persist. Turkey has an important contribution to overall inequality. Loss of population in Bulgaria, Romania and in parts of Greece, and high growth rates of population in Turkish regions introduce different challenges for regional policy. Despite significant growth in regional GDP per capita in SES, it is not clear if there is disintegration rather than integration. For Turkey, developing human resources in science and technology and dealing with population pressures on metropolitan areas remain as key challenges. In the second part of the study, we try to evaluate the implications of institutional capacity constraints and spatial planning system of Turkey for further spatial integration to the area.
This article analyzes the characteristics of the Brazilian trade flow from the Northeast, Southeast and South Regions in MERCOSUL in terms of factor intensity within the principles of traditional trade theory. The analysis is performed for the period 1990-2004 and the input-output technique is used. The classification of products according to factors' intensity is performed using the Endowment Triangles method developed by Leamerand adapted by Londero and Teitel. Considering that there are regional disparities in Brazil, it is natural to investigate the patterns of the international trade of Brazilian Regions, particularly the Northeast, Southeast and South, which together account for more than 90.0% of the Brazilian international trade and 95.0% for MERCOSUL. Regarding the use of factors for MERCOSUL, the results show that in exports from the Northeast, there is a paradoxical behavior in the use of comparative advantages, once there is greater share of goods intensive in capital and less in natural resources and labor. Concerning the South and Southeast Regions, exports are more intensive in capital than the imports, therefore consistent with the precepts of comparative advantages, if recognized that these two regions are relatively well endowed with more capital than the partners of MERCOSUL.
Japan's economy is entering a new phase of economic growth through the so-called “lost 15 years” since 1990. Particularly Tokyo and Aichi prefectures have been drawing attention as engine of new economic growth in Japan. Although the recovery of Japan's economy has resulted in an increase in the demand for traffic, construction of new roads in rural areas has been located in a serious situation. It is attributed to a decreasing trend in Japan's population and aging. Thus Japan's national budget will be being reduced in the future. On the other hand, the environmental issues that Japan is facing are becoming serious as well. Japan is one of countries which have ratified Kyoto Protocol, but attaining the target of Kyoto Protocol seems to be very difficult for Japan. Particularly the carbon dioxide emissions from the motor vehicles have still been showing an increasing trend. Thus one can observe a dilemma between the growing demand for traffic and the increasing environmental load in Japan. So this article aims at finding a solution for this dilemma developing an economy-transport-environment interactive model from the spatial point of view. In this study, Aichi, Shizuoka, and Nagano prefectures in Japan are taken as a study region, and then economy-transport-environment interactions are investigated focusing upon emissions of carbon dioxide, nitrogen oxide, sulfur oxide, and suspended particulate matter.
The objective of the paper is to provide an estimative of the impacts that changes in international prices of agricultural commodities will have on income distribution and poverty in Brazil. To do so, a Social Accounting Matrix is constructed and applied, using a Leontief-Miyazawa model framework. The SAM is defined for 40 products, and households are allocated into 10 groups, being 6 agricultural and 4 urban. Demand elasticities (price and income) for the products defined in the SAM are considered, as well as limitations on the supply of agricultural inputs. The results indicate that a 50% reduction in tariffs across the board, by all countries and for all products, will produce minor impacts in Brazil: national GDP would increase by up to 1.6%, and the impacts on poverty and income inequality, although positive, would be very small.
This study contributes to the debate on whether China's domestic enterprises (DEs) have experienced a significant catch-up compared with foreign-funded enterprises (FFEs) in high-tech industries. Our paper tries to estimate a new set of capital stock and R&qmp;D capital stock by ownership for China's high-tech industries. Then, using this newly constructed data set, it assesses the comparative productivity performance of state-owned enterprises (SOEs) (as the most important proxy for DEs) in high-tech industries from 1996 to 2006. The results show that SOEs as a whole have experienced an inverted U-shape trajectory of catch-up for 1996-2006, while those SOEs which originate from competitive industries tend to show a better performance. With respect to the technology catch-up, SOEs in particular are still lagging behind because of their failure to develop indigenous technology capabilities.
Trade liberalization is an essential requirement for the increase of trade between nations, providing numerous gains to the involved countries, due to the reducing of trade barriers, which can change price behavior. In the 1990's, Brazilian trade integration followed the world's new standard context, based on the so-called New Regionalism, which is characterized by the countries' integration through both bilateral and multilateral deals. The purpose of this work is to analyze the impacts of a hypothetic formation of Free Trade Area of the Americas (FTAA) and the union between Southern Common Market (MERCOSUR) and European Union (EU), MERCOEURO, in respect of the Brazilian green coffee exportations to the United States of America and the European Union, from 1999 to 2006. For this purpose, the partial equilibrium model developed by Laird and Yeats  was used, since it measures trade creation and trade diversion after the institution of those blocs. This study shows us that the effects of the formation of FTAA and MERCOEURO had positive effects on the Brazilian coffee exports.
In response to rising oil prices and carbon emission concerns, policies promoting increased ethanol usage in gasoline blends are debated and implemented by many countries, including major energy users such as the USA, the EU and Japan. As a result, Brazil, as the largest sugar ethanol producer and exporter in the world, can expect growing foreign demand for ethanol exports. Also, the introduction of flex-fuel vehicles in Brazil is causing domestic sales of ethanol to increase steadily. In this paper, we investigate the regional and industrial economic consequences of rapid growth in Brazilian ethanol domestic consumption and exports. For this, we use a disaggregated multi-regional computable general equilibrium (CGE) model with energy industry detail. Our modelling emphasises a number of features of ethanol production in Brazil which we expect to be important in determining the adjustment of its regional economies to a substantial expansion in ethanol production. These include regional differences in ethanol and sugar production technologies, sugarcane harvesting methods and the elasticity of land supply to sugarcane production. Some of the conclusions are as follows. (i) Debate on the prospects for the Brazilian ethanol industry often places a high weight on export growth. Our simulations suggest that growth in domestic ethanol demand will be the major influence on the Brazilian economy, at least to 2020. (ii) Pressure for further land clearance is often associated with a rapid ethanol growth scenario. But only a small (less than 2%) reduction in land use by other agriculture is necessary to accommodate the required expansion in ethanol production. Food production is equally affected by the appreciation of real exchange rate (Dutch disease effect) and growth of the light-duty vehicle fleet. (iii) Tight enforcement of a nation-wide ban on manual harvesting could reduce the ability of some (poor) regional economies to participate in the benefits of growth in ethanol production.