Economic Geography Current Issue

“Go West, Young Woman?”: The Geography of the Gender Wage Gap through the Great Recession

Jamie Goodwin-White

Abstract: Despite headline-grabbing accounts of the mancession and childless metropolitan-dwelling women who earn more than men, the gender wage gap remains persistent. However, the spatiality of the gender wage gap has received little attention. I ask whether, where, and how the gender wage gap changed with the Great Recession. Using American Community Survey pooled surveys for 2005–2007 and 2011–2013, I model counterfactual wage distributions for full-time male and female workers in the top one hundred metro areas of the United States, controlling for education, age, experience, and occupation. Gender inequality is polarizing spatially and across the wage distribution, and the recession exacerbates this pattern. Gender gaps decline most in the Rustbelt, but show relative increases in many Western metro areas. Further, declines are mostly among below-median earning workers, whereas increases are likely at the seventy-fifth or ninetieth percentiles. Disproportionate returns to men’s characteristics explain much of these geographic and distributional shifts. The combination of geographic and distributional analysis reveals a more thorough picture of how gender inequality shifted with the recession, since previous patterns of uneven development under economic restructuring are still evident. The analysis also signposts regions of emerging gender inequality where relative equality is often presumed, suggesting critical research directions for feminist and economic geographers.

Key words: recession, gender wage gap, geography, inequality, labor markets, distributional analysis

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Regional Growth Paths and Resilience: A European Analysis

Don J. Webber, Adrian Healy, and Gillian Bristow

Abstract: Research highlighting the differential resilience of economies to shocks opens up the possibility that long-run growth paths are associated with how regions cope with and recover from such shocks. To date, however, there has been limited exploration into whether long-run evolutionary growth paths or trajectories influence regional economic resilience and what types of trajectories might be more associated with resilience. This article explores the connections between regional economic resilience and regional and national growth trajectories by utilizing a novel set of methods to group regions according to the similarity of their growth paths, identifying the relative importance of national growth for regional growth, and categorizing regions according to their resilience to the 2007–2008 economic crisis. The results suggest that regions have empirically identifiable long-run and path-dependent development trajectories that are significantly associated with industrial employment shares and observed resilience outcomes. Critically, however, these regional growth paths are significantly shaped by national trajectories. Furthermore, regions with greater employment shares in sectors that are less susceptible to demand fluctuations are likely to experience more stable growth rates and be more resilient to economic downturns. This has implications for understanding the importance of evolutionary trends and specifically the role of national contexts and industrial legacies in shaping regional resilience.

Key words: resilience, trajectories, evolutionary economic geography, GVA

JEL codes: R11, R58, R23

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Economic Geography of Investment Banking Since 2008: The Geography of Shrinkage and Shift

Dariusz Wójcik, Eric Knight, Phillip O’Neill & Vladimír Pažitka

Abstract:
Investment bank capitalism might have foundered during the global financial crisis in 2008, but what has happened to investment banks? Our analysis reveals that core investment banking activities have experienced a significant contraction, accompanied by diminished institutional and geographic concentration. Large banks have experienced the largest falls in revenue, and Asian banks have capitalized on the growth of their local capital markets. With direct access to the largest market in the world, US banks remain dominant globally, but their market shares have declined. Our results highlight the variegated nature of change under way in the global financial system, and its implications for geopolitics and geoeconomics.

Key words: investment banks, financial crisis, globalization, geographic concentration
JEL codes: F30, F65, G24, L10, R10

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Lead Firms in the Cocoa–Chocolate Global Production Network: An Assessment of the Deductive Capabilities of GPN 2.0

Jeff Neilson, Bill Pritchard, Niels Fold, and Angga Dwiartama

Abstract: Recent models of Global Production Network Theory (known as GPN 2.0) have attempted to theoretically explain the underlying determinants, or causal drivers, of particular industry network configurations, which in turn shape the territorial outcomes for regional development. To date, the ability of this ambitious conceptual model to thereby explain economic geography has remained largely untested beyond the select industry networks examined by its proponents, most notably the electronics, retail, and automotive sectors of East Asia. In this article, we stress test the causative model for the case of lead firms in the global cocoa–chocolate sector, and assess its ability to subsequently explain industry configurations and territorial outcomes in a particular country: Indonesia. Our application suggests that GPN 2.0 has considerable utility for directing empirical research, but challenges beset its fuller theoretical promise. We identify a problematic relationship between the deductive causality implied by GPN 2.0 and the inherent relationality of GPN 1.0 that remains, in our view, unresolved. As a result, we remain skeptical of the broader theoretical claims that GPN 2.0 possesses explanatory powers capable of deducing industry network configurations from a discrete set of supposedly independent variables.

Key words: GPN 2.0, global value chains, cocoa, chocolate, Indonesia, global production networks, value capture trajectories, economic geography, lead firms

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Does Foreign Direct Investment Generate Economic Growth? A New Empirical Approach Applied to Spain

Jorge Bermejo Carbonell and Richard A. Werner

Abstract:
It is often asserted with confidence that foreign direct investment (FDI) is beneficial for economic growth in the host economy. Empirical evidence has been mixed, and there remain gaps in the literature. The majority of FDI has been directed at developed countries. Single-country studies are needed, due to the heterogeneous relationship between FDI and growth, and because the impact of FDI on growth is said to be largest in open, advanced developed countries with an educated workforce and developed financial markets (although research has focused on developing countries). We fill these gaps with an improved empirical methodology to check whether FDI has enhanced growth in Spain, one of the largest receivers of FDI, whose gross domestic product growth was above average but has escaped scrutiny. During the observation period 1984–2010, FDI rose significantly, and Spain offered ideal conditions for FDI to unfold its hypothesized positive effects on growth. We run a horse race between various potential explanatory variables, including the neglected role of bank credit for the real economy. The results are robust and clear: The favorable Spanish circumstances yield no evidence for FDI to stimulate economic growth. The Spanish EU and euro entry are also found to have had no positive effect on growth. The findings call for a fundamental rethinking of methodology in economics.

Key words: capital flows, bank credit creation, foreign direct investment, FDI, economic growth

JEL codes: F21, F34, O16, O23, R11

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