Resource frontiers and agglomeration economies: The varied logics of transnational land-based investing in Southern and Eastern Africa

Actor-level data on large-scale commercial agriculture in Sub-Saharan Africa are scarce. The peculiar choice of transnational investing in African land has, therefore, been subject to conjecture. Addressing this gap, we reconstructed the underlying logics of investment location choices in a Bayesian network, using firm- and actor-level interview and spatial data from 37 transnational agriculture and forestry investments across 121 sites in Mozambique, Zambia, Tanzania, and Ethiopia. We distinguish four investment locations across gradients of resource frontiers and agglomeration economies to derive the preferred locations of different investors with varied skillsets and market reach (i.e., track record). In contrast to newcomers, investors with extensive track records are more likely to expand the land use frontier, but they are also likely to survive the high transaction costs of the pre-commercial frontier. We highlight key comparative advantages of Southern and Eastern African frontiers and map the most probable categories of investment locations.

Inquiry into population, migration and agglomeration

This Inquiry final research report investigates agglomeration economies and their ability to alter the economic productivity of cities, together with what are the key drivers of population growth and mobility in Australia.

The dynamics of industrial geographic distribution: evidence from Brazil (2002-2014)

ABSTRACT The geographical distribution of Brazilian industries changed between 2002 and 2014, and it was more significant for some industries. Based on Dumais et al. (2002), we explore the dynamics of these changes by a decomposition of the employment variation and concentration index for manufacturing industries grouped by technological intensity, and we identify the direction of the locational movements of the firms among microregions. In general., the results indicate that between 2002 and 2014, there was a trend of convergence among the microregions’ participation in industrial employment, contributing to industrial deconcentration in the country, with the exception of the group of high-technology industries, which became more concentrated. Components of the life cycle of industries, especially the growth of employment generated by new industries in non-metropolitan microregions, are identified as main propelling of this evidence. In general., the results are consistent with the importance of agglomeration economies over historic accidents to explain the industrial concentration in Brazil between 2002 and 2014.

Industry Networks and the Geography of Firm Behavior

Using a network approach that circumvents well-known challenges in estimating peer effects, we show that interactions with a firm’s geographic neighbors play a significant causal role in corporate investment behavior and a modest role in financial policies and firm performance. Moreover, these geography network effects are almost entirely driven by propagation effects through product market and supply chain networks. We corroborate our findings in a quasi-experimental framework that allows for spillovers in treatment effects. Our findings help rationalize industrial clusters (e.g., Silicon Valley), as they illustrate that agglomeration economies are substantial and operate predominantly within industry boundaries. This paper was accepted by David Simchi-Levi, finance.

Measuring the Impacts of Roads Infrastructure on Manufacturing Location

Using a detailed dataset on manufacturing firms, this study analyses the link between roads infrastructure and manufacturing location in Heilongjiang province, China. The results show that the improvement in roads facilities has very limited impact on the agglomeration of economic activities in Heilongjiang province during the 2001-2013 period, but this impact has changed to be significantly positive during 2008-2013 period, which has seen greater concentration. The explanation for this finding could be that the local protectionism and failed market economy took place in Heilongjiang province more recently. We also try to differentiate this distributive effect of road infrastructures across manufacturing sectors. The empirical results show that the technology-intensive and labor-intensive firms show a greater preference for areas with better road networks, while the resource-oriented industries appear to be not attracted by better road infrastructure. Important policy implications emerge from our findings for transport planning, enabling manufacturing firms to benefit from agglomeration economies and regions to achieve sustainable economic growth.