Richard Rijnks, Daragh O'Leary, Viktor Venhorst (p)

Juan Alvarez Vilanova

In this report we set out to investigate the role of regional attractiveness of rural regions, as a pre-market condition, in new firm formation.

Previous studies have shown that rural service delivery is strained due to concentration and government withdrawal. Earlier work shows that those regions that have more favourable pre-market conditions, tend to pull in different people as well as different types of entrepreneurial activity
What is less well known is to what extent lacking favourable pre-market conditions depresses entrepreneurial activity. The literature suggests a bi-directional relationship, where entrepreneurial activity affects regional attractiveness, and vice versa. This study aims to disentangle these two relations and to show the impact of a change in rural attractiveness on entrepreneurial activity. This enables us to disentangle the market response from the pre-market, exogenous, conditions.
To do so, we leverage the impact of an exogenous shock, the Groningen earthquakes on entrepreneurial activity. We build on the literature on firm-demographics to establish whether the exogenous shock translated into a change in firm entry- and exit-rates in the affected region. In the models we control for local economic conditions (related and unrelated variety, concentration, and local market size).
The main findings are that increased exposure to earthquakes negatively impact firm entries, with a doubling of the exposure in terms of peak ground velocities leading to a 0.038 point decline in the firm entry rate, while the exposure to earthquakes strong enough to be felt lead to a marginal decrease in new firm formation of 0.012 when looking at all firms combined. There is no significant association with firm exits in either specification. The findings indicate that new firm formation, and relatedly, innovation, new service delivery (Delfmann et al., 2017) are negatively affected by earthquakes.
Turning to the more immediate impact on service public goods delivery in rural areas, through social infrastructure, we find that social infrastructure firm entries are not affected by earthquakes.

Juan Alvarez Vilanova (p), Riccardo Crescenzi, Lee Mager

Yiannis Saratsis

Foreign Direct Investment (FDI) is a crucial source of capital, technology and skills for the green transition, yet we lack a robust methodology for identifying ‘green’ FDI beyond investment in renewable energies. This paper develops a novel approach that leverages the newly published EU Taxonomy of Sustainable Finance and the rapidly advancing capabilities of pre-trained Large Language Models (LLM) to accurately, consistently and reliably identify green FDI projects in all sectors of the economy. This is, to our knowledge, the first application of LLMs specifically for classifying green investments. Our methodology reveals that 1 in 5 inward FDI USD into the European Union (EU) and the United Kingdom (UK) between 2013 and 2023 can be considered green, of which half lie beyond renewable energy and would otherwise not be fully picked up by existing approaches as capable of contributing to sustainable development. In terms of geography, our analysis unveils a new geography of green FDI that goes well beyond ‘sunny’ and ‘windy’ regions typically associated with renewable energies FDI. These descriptives demonstrate that, beyond acting as a source of finance for vital renewable energy infrastructure, FDI in Europe is beginning to serve as a vehicle through which to decarbonise other sectors of the economy, including those (such as manufacturing and heavy industries) which are associated with high direct and indirect carbon emissions.

George Petrakos, Dimitris Kallioras, Alexandra Sotiriou, Yiannis Saratsis (p), Stavroula Alexiou

Michel Dimou

The paper focuses on three areas of research where the evidence is not yet very solid. First, the paper examines the impact of the EU Cohesion Policy on three types of inequality that may be related to each-other: within-country regional inequalities, between countries inequalities and within-countries income inequalities. Second, the paper examines what policy tool (i.e., investment, infrastructure, human capital, or environment) is more likely to reduce spatial inequalities or income inequalities. These policy tools are to some extent related to pre-market, in-market, or post-market policies and help identify which mix is more likely to reduce different types of inequalities. Third, the paper examines whether administrative efficiency and the absorbing capacity of Managing Authorities at the national or regional level affect the effectiveness of the EU Cohesion Policy to reduce inequalities.

Michel Dimou (p), Alexandra SCHAFFAR, Laurent GOMEZ

Viktor Venhorst

Numerous studies have documented behavioral differences in daily mobility patterns between native-born individuals and immigrants. Immigrants tend to use public transportation and non-motorized modes of travel, such as walking and cycling and car-sharing services more frequently. These mobility choices are influenced by various factors, such as residential location decisions shaped by financial constraints and preferences for living near ethnic or cultural communities. Furthermore, immigrants' mobility behaviors vary significantly depending on their host country and country of origin. For example, In the United States, Asian immigrants tend to commute shorter distances on average compared to Hispanic or European immigrants. Several studies emphasize the importance of analyzing the mobility behaviors of distinct immigrant subgroups instead of treating all immigrants as a single category.

This study draws data from the French National Transport Survey, known as “Enquête Mobilité des Personnes” (EMP, 2021), to address a critical gap in understanding daily mobility and travel speed inequalities among natives, immigrants, and various immigrant subgroups in France. It aims to understand how socio-demographic, spatial, and structural factors contribute to these disparities, offering insights into more equitable mobility public policies.

Our methodology involves a multi-step approach to analyze the determinants of travel speed disparities. First, we use a step-by-step model to assess how various factors influence daily mobility choices. Next, we conduct a mediation analysis to disentangle the effects of individual characteristics and locational conditions on travel speed. Then, we apply an interaction model to compare the mobility behaviors and performance of immigrants and natives, highlighting potential differences. We also use a truncated regression model, focusing exclusively on the immigrant population, to investigate the impact of economic and social integration on mobility performance, with a specific emphasis on travel speed. Finally, we use a multinomial Logit model to examine the choices of transport modes of different population groups.

The findings of this study reveal significant differences in travel speed among various population groups. Gender and family circumstances have a more pronounced impact on the mobility of immigrants compared to natives. Residential location is another crucial factor driving variations in travel speed. An immigrant's country of origin and level of integration play essential roles in their mobility performance. Integration factors such as civic involvement are linked to travel speed. Acquiring citizenship and long-term residency suggests that institutional integration also contributes to increased travel speed, highlighting the importance of social and economic inclusion in reducing mobility inequalities.