Vinicius Vale (p), Kênia Souza , Fernando Perobelli

The productivity is a crucial and central theme on economic development debate. It is a key factor that may increase the international competitiveness and drive a long-term economic growth. However, the effects of productivity gains are not homogeneous. The sectorial productivity gains may impact the economy in a different way.

Thus, this paper aims to analyze the sectorial productivity spillover effect in the Brazilian economy. In order to reach this aim, we used an applied general equilibrium model calibrated to the Brazilian economy for 2010 and 2015. Our Computable General Equilibrium (CGE) model has its analytical and functional structure based on the ORANI-G (a Generic Single-Country CGE Model). The numerical structure is calibrated based on the Brazilian System of National Accounts (SNA) provided by the Brazilian Institute of Geography and Statistics (IBGE), which had allowed us to consider 68 activities and 128 products.

In order to map the sectorial productivity spillover effect in the Brazilian economy, we had considered a homogeneous increase in the sectorial productivity by 1%. The productivity increase has been implemented by sector separately in order to isolated the effect of each of them. Furthermore, we had considered two years, 2010 and 2015, to capture the effect of the economic downturn in Brazil during the period.

We contribute to the literature and the policy debate through a prospective study able to create a background about the sectorial productivity in Brazil and their heterogeneous spillover effects in the economy. Our results may indicate strategies of investment that may boost the Brazilian economy, since it brings some potential effects on key macroeconomic and sectorial variables. In other words, by the map of the sectorial productivity spillover effect, we had pointed out those sectors that has greater potential to affect the economy as result of a productivity increase.

Richard Harris, John Moffat (p), Emil Evenhuis, Ron Martin, Andy Pike, Peter Sunley

The United Kingdom’s economy is one of the most regionally imbalanced in Europe. The government’s recent industrial strategy discusses various means of addressing this, one of which is the strengthening of existing clusters. This accords with the view that firms benefit from membership of localised groupings that provide access to skilled labour markets, specialised suppliers and knowledge spillovers. Most of the extant empirical evidence on spatial concentration in the United Kingdom has employed measures that suffer from areal unit problems. Using plant-level indices of spatial proximity derived from postcode district data, this paper investigates the extent of spatial concentration and its impact on total factor productivity in advanced manufacturing sectors in Great Britain. Separate indices of spatial concentration are calculated to take account of distances to plants in the same industry and distances to plants in ‘related’ industries as well as different distance decay factors. The extent to which, and where, clustering occurs is shown to vary considerably across advanced manufacturing sectors. The results from estimation of production functions indicate that, in most advanced manufacturing sectors, spatial concentration has a negative impact on productivity in small plants and a positive effect in larger plants. This suggests that small plants operating in clusters suffer from congestion diseconomies. However, large plants experience a positive net effect since they benefit more from knowledge spillovers due to their higher levels of absorptive capacity.

Oana Mihaescu (p), Niklas Rudholm , Sven-Olov Daunfeldt

Although external trade is often pointed out as a principal determinant for the loss of city center attractiveness, we still have debatable empirical evidence about the direction and the extent of this relationship. External trade is not as major a threat to downtowns in larger cities where the customer base is often sufficiently large to cover several marketplaces, and resources for downtown redevelopment are usually easier to provide. In this article we focus instead on the challenges of small cities, many of which are struggling to create an attractive urban environment in their city centers in a time of structural change, increasing urbanization, and (often) inadequate financial resources and human capital.

To determine the effects of edge-of-town shopping centers on firms in city centers we use a difference-in-difference regression model with ‘random effects’ that control for heterogeneity at industry and geographical level. The results show, for example, that entry by edge-of-town shopping centers determines a 10% decrease, on average, in the CPI-adjusted real revenues of firms located in the city center. This effect seems to be mainly due to the impact on retail firms, which experience an average decrease in real revenues by 13%, and on the lower population quartiles of our sample (i.e., cities with less than 12,500 inhabitants). The market shares of the city centers are also negatively affected. This is an indication that new edge-of-town shopping centers ‘steal’ customers from city center retail firms. However, downtown firms in the hospitality sector do not seem to be affected the same extent, indicating that the hospitality sector may be the key for redevelopment in small city centers. Thus, competition makes these city centers willing to adopt, in line with the Schumpeterian value creation idea, innovative responses to the challenge posed by the development of external trade.

The ambition is that this knowledge can be used to increase the city center's attractiveness in the smaller cities, thus contributing to their importance as meeting venues and destinations.