Sabine D'Costa (p), Adelheid Holl, Dalila Ribaudo

Alessio Muscillo

Productivity is a critical determinant of firm survival and exit as theory suggests that in an efficient outcome the least productive firms exit the market. In parallel, the urban economics literature has shown that firms in denser locations are more productive than in less dense areas. Most of this literature focuses on cities of different sizes or densities, with a smaller literature exploring rural-urban differences. Finally, the literature has also shown that the local environment affects the probability of firm survival. However, evidence at a granular-geographic level is still lacking and little attention has been given to the urban-rural dimension of the productivity-exit nexus. Yet, there can be important heterogeneity in productivity and exit rates between the urban core, suburban and rural areas: we therefore investigate the possibility that the relationship between firm exit and productivity can be mitigated by firms’ local environment.
We use a panel of 3.5 million observations covering 600,000 Spanish firms from the SABI database to study the determinants of firm exit at a detailed geographical level in mainland Spain between 2011 and 2019. Our descriptive findings show important urban versus rural differences in firm-level productivity and exit rates. As expected, productivity levels follow the urban hierarchy, highest in core urban areas and lowest in rural areas. Our empirical results indicate that the probability of exit is highest in core urban areas followed by suburban areas, in both manufacturing and services. In manufacturing, this effect increases after controlling for firm age, size, exporter status, capital intensity and industry. Firms in suburban areas are almost twice, and firms in core urban areas nearly three times as likely to exit as comparable firms in rural areas. When including the distance to the productivity frontier, the effect of the urban hierarchy is unchanged and remains significant. Increasing the distance to the frontier by one standard deviation leads to a 78% increase in the probability of exit. In services however, the effect of location is no longer significant when we include firm controls. When we add the distance to the productivity frontier, we find that a one standard deviation increase is associated with a 70% higher probability of exit and firms in the urban core localities are 46% more likely to exit than in rural localities.

Anette Haas (p), Annekatrin Niebuhr, Tanja Buch, Carola Burkert, Stefan Hell

Sabine D'Costa

The paper investigates how xenophobic attitudes, as measured by the regional share of votes for right-wing parties and xenophobic violence, affect migrants’ choice of where to live in Germany. We use a unique panel data set for the period 2004 to 2017 and apply fixed effects regression models and instrumental variable estimation to examine the relationship between xenophobia and immigration. Our results indicate that xenophobic behaviour tends to reduce regional labour immigration. However, evidence seems to be more robust for the support of right-wing parties than for xenophobic violence. Regarding heterogeneous effects across skill groups, the findings are ambiguous. While low-skilled foreign workers might be affected more strongly by the share of right-wing votes, the immigration of skilled workers seems to be more sensitive to xenophobic violence.

Nadezhda Zamyatina, Boris NIkitin (p)

The problem of shrinking of Arctic cities has been gaining more and more attention in recent years. Several stereotypes have already developed in relation to this problem. The first and most important is the idea of the general non–viability of Arctic cities. The second stereotype assumes that the world North was developed mainly by the shift method, while the Soviet One was developed by the integrated development of a network of cities. This study aims to refute the aforementioned stereotypes on the basis of the analysis of the population dynamics of the Arctic cities of Russia and Northern Canada since the beginning of the XX century. We identified several types of population dynamics of Arctic cities in Russia and Canada. Unlike the vast majority of studies, where a three-part type of urban population dynamics is distinguished (growth-stabilization-shrinkage), the novelty of the proposed approach consists in an attempt to identify exactly different types over a period of several decades, taking into account the possibly wave-like change in the population of cities. A total of 8 types of urban population dynamics have been identified. The study shows the variability of the development of Arctic cities – although the "boom – bust" trend can be traced in many cases. The cycles of ups and downs are often associated with the individual trajectory of urban development (resource development, cycles of gaining or losing advantages of economic and geographical location, etc.), and not only with the general external factors on the national or global level.