Economic Geography Current Issue

The Limits to Private-Sector Climate Change Action: The Geographies of Corporate Climate Governance

Jayme Walenta

Abstract: Corporate carbon footprint assessments have been employed by hundreds of the world’s largest corporations in an effort to take seriously the role of climate change for a company’s operations. These assessments differ from personal footprints in that to produce credible and transparent calculations, companies follow established reporting guidelines. This article investigates how the corporate carbon footprint structures the business response to climate change across space. Two key tasks are undertaken. First, in referencing the rules and standards for calculation, how the footprint tool makes sense of atmospheric greenhouse gases (GHGs) for companies, helping them establish ownership and responsibility for certain emission sources is described. This is accomplished through an emission ranking system where GHG sources are categorized as either owned (scope 1 or 2) or value chain (scope 3). Second, the spatial implications to using this governing device as a climate management tool are documented. To do this, the emission performance of twenty-one large US-based corporations over a six-year period (2010–15) are tracked. The data reveal that over time, corporations reduce their owned emissions, while their value chain emissions grow. The article argues that the footprint tool as a means to govern GHG emissions contributes to the spatializing of a corporate response climate change. Specifically, it works to enclose climate responsibility, locating it in particular spaces and not in others. Importantly, this represents a limit to what the private sector can accomplish with regard to climate change action and should be considered in light of recent widespread calls for private-sector leadership on climate change.

Key words: carbon footprint, climate change, corporations, environmental governance

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Breaking Down the Border: Physical, Institutional and Cultural Obstacles

Roberta Capello, Andrea Caragliu, and Ugo Fratesi

Abstract: The literature on borders as barriers to economic growth presents some weaknesses in conceptualizing and measuring border effects due to obstacles of different nature (e.g., physical, institutional, and social/cultural). This article aims at overcoming this limitation by demonstrating that political borders actually comprise several lines of fracture in the continuity of socioeconomic space. As such, border effects must be decomposed into their building blocks in order to more clearly identify the sources of border-related inefficiencies and enact appropriate policies. By applying an original methodology, the article analyzes the extent to which different types of barriers create obstacles to different growth assets. Results applied to European cross-border regions on a newly collected database at NUTS3 level suggest that (1) physical obstacles hamper several types of economic interactions; (2) sociocultural barriers limit the exploitation of intangible assets; and (3) social and cultural barriers limit the access to intermediate goods and to geographically close labor markets. Evidence-based policy implications call for the identification of the sources of these discontinuities, of the real cost that they engender, and of the type of growth assets hampered in their exploitation by the presence of a border.

Key words: cross-border regions, border obstacles, regional growth

JEL codes: R11, R12, R58

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Industrial Diversification in Europe: The Differentiated Role of Relatedness

Jing Xiao, Ron Boschma, and Martin Andersson

Abstract: There is increasing interest in the drivers of industrial diversification, and how these depend on economic and industry structures. This article contributes to this line of inquiry by analyzing the role of industry relatedness in explaining variations in industry diversification, measured as the entry of new industry specializations, across 173 European regions during the period 2004–2012. First, we show that there are significant differences across regions in Europe in terms of industrial diversification. Second, we provide robust evidence showing that the probability that a new industry specialization develops in a region is positively associated with the new industry’s relatedness to the region’s current industries. Third, a novel finding is that the influence of relatedness on the probability of new industrial specializations depends on innovation capacity of a region. We find that relatedness is a more important driver of diversification in regions with a weaker innovation capacity. The effect of relatedness appears to decrease monotonically as the innovation capacity of a regional economy increases. This is consistent with the argument that high innovation capacity allows an economy to break from its past and to develop, for the economy, truly new industry specializations. We infer from this that innovation capacity is a critical factor for economic resilience and diversification capacity.

Key words: industrial diversification, related diversification, evolutionary economic geography, unrelated diversification, European regions, resilience
JEL codes: B52, L16, O14, O18, R11

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Labor Regimes, Global Production Networks and European Union Trade Policy: International Labor Standards and Export Production in the Moldovan Clothing Industry

Adrian Smith, Mirela Barbu, Liam Campling, James Harrison, and Ben Richardson

Abstract: This article examines the relations between workplace and local labor regimes, global production networks (GPNs), and the state-led creation of expanded markets as spaces of capitalist regulation through trade policy. Through an examination of the ways in which labor regimes are constituted as a result of the articulation of local social relations and lead-firm pressure in GPNs, the article examines the limits of labor provisions in European Union trade policy seeking to ameliorate the worst consequences of trade liberalization and economic integration on working conditions. The article takes as its empirical focus the Moldovan clothing industry, the leading export-oriented manufacturing sector in the country. Trade liberalization has opened up a market space for EU lead firms to contract with Moldovan-based suppliers, but in seeking to regulate labor conditions in the process of trade liberalization, the mechanisms in place are not sufficient to deal with the consequences for workers’ rights and working conditions. Indeed, when articulated with national state policy formulations seeking to liberalize labor markets and deregulate labor standards, the limits of what can be achieved via labor provisions are reached. The EU’s trade policy formulation does not sufficiently take account of the structural causes of poor working conditions. Consequently, there is a mismatch between what the EU is trying to achieve and the core labor issues that structure social relations in, and labor regimes of, low-wage labor-intensive clothing export production for EU markets.

Key words: labor regimes, trade policy, global production networks, European Union, Moldova, clothing industry

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