Using theory-grounded estimations of trade flow equations, this paper investigates the role that business and social networks play in shaping trade between French regions. The bilateral intensity of networks is quantified using the financial structure and location of French firms and bilateral stocks of migrants. Compared to a situation without networks, migrants are shown to double bilateral trade flows, while networks of firms multiply trade flows by as much as four in some specifications. Finally, taking network effects into account divides the estimation of the impact of transport costs and of the effect of administrative borders by around three.JEL classification: F12, F15

This paper evaluates, in the context of economic geography estimates, the magnitude of the distortions arising from the choice of zoning system, which is also known as the Modifiable Areal Unit Problem (MAUP). We consider three standard economic geography exercises (the analysis of spatial concentration, agglomeration economies, and trade determinants), using various French zoning systems differentiated according to the size and shape of spatial units, which are the two main determinants of the MAUP. While size matters a little, shape does so much less. Both dimensions seem to be of secondary importance compared to specification issues.JEL classification: R12, R23, C10, C43, O18.

We develop a methodology to compute transport costs accurately. Based on the real transport network, our measure encompasses the characteristics of the infrastructure, vehicle and energy used, as well as labor, insurance, tax and general charges borne by transport carriers. Computed for the 341 French employment areas, road transport shipments and the period 1978-1998, this new measure is compared to alternative ones such as great circle distance, real distance or real time. We conclude that these proxies do a very good job in capturing transport costs in cross-section analysis. However, important discrepancies limit the possibility of substituting them to our measure in time series analysis. Moreover, our measure enables one to identify the policies that most impact transport costs. We show that transport technology and market structure are responsible for most of the transport cost decrease. Infrastructure improvements confine to condition the spatial distribution of the gains. Finally, we detail the opportunities our results could present for researchers and regional policy makers.JEL classification: C81, H54, L92, R58

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The paper assesses the trade-creating impact of foreign-born residents on the international imports and exports of the French regions where they are settled. The protrade effect of immigrants is investigated along two intertwined dimensions: the complexity of traded goods and the quality of institutions in partner countries. The trade-enhancing impact of immigrants is, on average, more salient when they come from a country with weak institutions. However, this positive impact is especially large on the imports of simple products. When we turn to complex goods, for which the information channel conveyed by immigrants is the most valuable, immigration enhances imports regardless of the quality of institutions in the partner country. Regarding exports, immigrants substitute for weak institutions on both simple and complex goods

International audienceThis paper shows that urban geography matters to the effectiveness of place-based policies, using the French enterprise zone program as a case study. Whereas this program created more jobs in spatially integrated neighborhoods, its impact on local wages was only visible in the more isolated ones. In addition, a focus on the average impact of the program would lead to the conclusion that it mostly succeeded in displacing preexisting firms, but a lower level of spatial isolation was a clear determinant of the decision to create new firms from scratch

This paper investigates whether the geographic distribution of manufacturing activities in Italy is likely to differ according to the scale of plants. We find strong evidence of a significant positive relationship between size and concentration, as in Kim (1995) or Stevens (2002, 2004). However, we go one step further in examining how sensitive is this feature to the consideration of spatial dependence between geographic units. We show that, while large plants exhibit a clear tendency to cluster within narrow geographical units such as local labor systems, small establishments, by contrast, rather co-locate within wider areas in which a distance-based pattern emerges. These findings are consistent with plants of heterogeneous size engaging in different transport intensive activities.JEL classification: C21, L11, R12, R30, R34.

The chapter surveys the main contributions of new economic geography from the point of view of transport analysis. It shows that decreasing transport costs is likely to exacerbate regional disparities. However, very low transport costs should foster a more balanced distribution for economic activities across space. Thus, the spatial curve of development, which relates the degree of spatial concentration to the level of transport costs, would be bell-shaped. The paper also provides a detailed discussion of the main determinants of transport costs, which remain fairly large in most countries. It concludes with a discussion of some policy implications.