Tres ensayos en Economía Regional

Abstract

This dissertation consists of three essays where space is a fundamental component of analysis. As such, it is framed within the research fields of geographical economics and regional economics. Unlike what it has been traditionally studied in Neoclassical theory, where space is not explicitly considered in the analysis, this dissertation aims to highlight how space can become a fundamental factor in economic studies and the methodological considerations this implies. Starting with the models of von-Thünen and Alonso, up to the derivations presented by Krugman (1991) and Gallup et al. (1999), the literature on geographical economics and regional economics has shown how the consideration of geographic and spatial elements can lead to a better understanding of economic phenomena. With this considerations in mind, the first essay (Chapter 1), entitled "Firm location, regional weather conditions and bid pricing strategies in the Colombian wholesale electricity market", considers several of the concepts derived from geographical economics and industrial organization to explain how physical geography (differential weather conditions between regions) along with a mainly hydraulic technological structure and the location of the generation plant, can generate strategic behaviors for the establishment of bid prices of electricity-generating plants in the Colombian wholesale electricity market. Hence, weather conditions may influence pricing strategies based on the availability of water resources (of the plant in comparison to its competitors) and its capacity to store it. The second essay (Chapter 2) entitled "Market potential and manufacturing industry in Colombia, 1985-2015", explicitly links the concept of market potential derived from the literature in geographical economics, to explain the spatial distribution of the manufacturing industry in the departments of Colombia. The case of Colombian industry is interesting for two reasons: It operates under a context of (i) high regional disparities and (ii) a clear process of deindustrialization. Despite these elements, the chapter shows the importance of market potential to explain the behavior of manufacturing production in the territory. The third essay (Chapter 3), entitled "Market access and agricultural productivity in Antioquia, Colombia", focuses on explaining how agricultural productivity in the department of Antioquia has been affected by the distance of production units from the main regional markets. In this essay, the concepts of location and market access are of critical importance, as they have the capacity to affect the incentives that agriculture producers have; and therefore, the productivity of their activities. The essay shows how the effect of distance differs if regional agriculture markets or specialized industry markets are considered. Thus, space remains a fundamental element in explaining economic phenomena. Notably, a common element in the three essays is the use of spatial econometric techniques to test the relationships considered. These techniques have become a relevant tool for the development of studies focused on regional economics over the past years. In particular, this dissertation uses spatial econometric techniques for panel data and cross-sectional data that allow to: 1) consider space in the analysis through the inclusion of an exogenous weight matrix, which defines the concept of neighborhood considered in the study; 2) differentiate direct effects (traditionally estimated in classical econometrics) and indirect effects (mainly associated with the geographical context of the geographical unit); and 3) the possibility of taking into account global and local spillovers, which may have different implications depending on the analyzed phenomenon.