The job chains model of local labor market change is a demand-driven analytic device for estimating the effects of new job creation. This paper explores the effects of restricting supply, i.e., limiting job access, on the model’s primary outcomes: vacancy chain multipliers, welfare effects, and distributional impacts. Major sources of labor supply are the local unemployed, out of the labor force and in-migrants. Three simulations are reported relating to (1) restricting new jobs to current local residents (i.e., no in-migrants), (2) restricting new jobs to current residents in the first round of hiring only, and (3) restricting hiring to local unemployed/out of labor force on the first round alone. The results are compared to the basic model that assumes no supply-side restrictions. In terms of chain length, welfare effects, distributional impacts, and policy palatability, first-round restrictions on in-migrants would seem to be the most plausible option. However, as an economic development strategy, well-targeted demand-side initiatives would still seem to be preferable.
This paper revisits the commonly held view that small countries do not exhibit significant regional disparities. The issue is framed as one in which the attributes of small size (land area, population and the magnitude of the economy) are mediated by a series of spatial and non‐spatial factors such as distance, density, factor mobility, natural resources, land supply, social cohesion and governance structure. Given the existence of these mediators, the magnitude of regional disparities in small countries is not as surprising as it may seem at first glance.
These are basic questions that, because of difficulties in evaluating the effects of state and local economic incentives, are often left unanswered. This book, however, offers a solution to this problem. Persky, Felsenstein, and Carlson explore a new framework for evaluating state and local economic development efforts. They propose a method, referred to as the ""job-chains approach,"" that they say clarifies the potential justifications for economic development subsidies as well as the limitations surrounding these efforts. This innovative approach addresses not only the number of job vacancies created as a result of a subsidized business investment or expansion, but also the extent to which gains are achieved by the unemployed and the underemployed, whether skilled or unskilled.
Application of the authors' job-chains model leads to novel insights into local economic development evaluation and strategy. First, where standard employment multipliers focus exclusively on horizontal multipliers—increasing demand for locally produced products and services—the job-chains model identifies the existence of vertical multipliers, or links that work through job vacancies created by job changers. Second, using the job-chains model allows the authors to develop a technique for evaluating the welfare value of employment creation. The mechanics of job chains result in this value spreading more broadly across the local population than the original new jobs that created the chains. And third, the job chains perspective affords new insights into labor market dynamics by introducing individual preferences and behavioral probabilities into job choice.
Existing studies of the trend towards electronic provision of travel services tend to be highly bifurcated. They focus either on the supply-side characteristics of this change (new technologies and mediation platforms) or on the demand-side attributes, such as the socio-economic profile of the Internet user and attitudes towards electronic purchasing in the travel market. The latter approach, however, can lead to sample selectivity bias and misleading parameter estimates. It fails to recognize that actual Internet travel purchases are observable only for individuals who have made the prior decision to use the Internet as a market intermediary. This paper addresses this drawback by modelling the decision to purchase travel products on the Internet in a bivariate probit framework. The choice of travel service intermediary, travel agent (face-to-face) or Internet (cyberspace), is determined by the joint probabilities of general Internet purchasing and specific Internet travel purchasing. Using unique survey evidence of actual Internet transactions, the discrepancies between preferences for Internet travel purchasing and actual travel purchases are highlighted. The results suggest that demand for the latter is more closely related to previous Internet purchasing experience than to the socio-economic attributes of the purchaser.
Local festivals are increasingly being used as instruments for promoting tourism and boosting the regional economy. This is often reflected in the level of public assistance made available to them. However, it is difficult to assess the extent of the contribution of the festival to local economic growth, and most studies do not examine this issue beyond standard multiplier impacts. This study looks at two local festivals that take place annually in northern Israel. On the basis of detailed data on public assistance and visitor expenditure patterns, it goes beyond the basic impact analysis framework. A method is presented that accounts for net local income increase induced by the festival. The results show modest but positive local growth, suggesting some justification for public assistance for local festivals as a tourism strategy. Policy implications related to increasing the volume of visitors and their spending are discussed.
The chapter deals with processes of change in the functional structure of the Tel Aviv Metropolitan Area (TAMA) in the wake of economic globalization processes of the 1980s and 1990s. Of all the components making up the spatial organization of the TAMA, the chapter focuses on the development of two Central Business Districts (CBD) in metropolitan Tel Aviv: the traditional central city business arena and a new emerging center. Rather than heralding the formation of a polycentric urban structure, the new Tel Aviv CBD represents a real-estate led response at generating a new center of gravity for economic activity in Tel Aviv. The new center therefore competes vigorously with the established center. A further unique feature of the developing metropolitan structure is the ex nihilo nature of the new development. Instead of following the well-known pattern of incremental CBD expansion via new building at the margins of the established center, the new Tel Aviv business district represents an attempt at re-directing growth to a new location altogether.
This study focuses on globalization trends in the cultural industries of the Tel Aviv metropolitan area. It is well known that global centers are often cultural service centers as well. London, New York, Paris and Moscow are all economic hubs in the global system but are also cultural centers. The centrality of a cultural node can be measured (like the centrality of any node in a system) through observing the flows into and out of that center (see above Chapters 1 and 6). The identification of flows gives a more dynamic view of the relations between nodes than do static rankings (Beaverstock et al., 2000). In addition, attribute-based characterizations are particularly likely to under-identify ‘emerging’ nodes and the activities that take place within them. As such, a flows-based approach seems more appropriate for yielding insights into the way emerging nodes attempt to break into global networks using cultural activity as a vehicle of entry.
This chapter investigates Israel’s role as an `emerging node’ in the global economy through the prism of foreign direct investment (FDI). Empirically, we investigate the probability that a foreign-owned firm will locate in Tel Aviv. Foreign ownership is taken here as representing one facet of globalization. While we are aware that globalization processes encompass much more than the presence of foreign investors in the domestic economy and should also include some investigation of Israeli firms operating abroad, this topic will be touched on, inter-alia, through the analysis of patterns of FDI. As will be noted, much of this latter process is bound up with FDI in that many Israeli, technologically advanced, firms that try to break into global markets do so through by being incorporated or traded abroad (see chapter 6 and also Haaretz, 2000; Red Herring, 2000). A presence abroad is therefore linked to some form of foreign control over local firms and thus the two facets of globalization are inter-linked.
One of the most salient features of technological development and progress is its tendency to agglomeration in space. Popular accounts glorify the emergence of these new global high tech ‘hot-spots’ (Business Week, 1998; Newsweek, 1998) and academic studies debate their uniqueness (Bania, Eberts and Fogarty, 1993; Castells and Hall, 1994, Pouder and St. John, 1996). However, one feature that seems to have been over-looked relates to the extent to which these agglomerations are concretely linked into their regional and national economies. If they act as integral components in their regional contexts, then we would expect some form of unique linkages to exist between them and their environs, linkages which could not exist if the concentration was located elsewhere. On the other hand, if they function purely as nodes in global networks, then the local context within which they perform will act purely as a back-drop. In this kind of abstract environment, little uniqueness is related to a specific location. The external economies of the agglomeration could have developed in similar fashion somewhere else. As Krugman notes with respect to the Los Angeles economy:
(the people of L.A.) are there because of each other: if one could uproot the whole city and move it 500 miles, the economic base would hardly be affected (Krugman 1996, p. 209).
Cities form one of the principal arenas in which globalization processes are manifest. Much of the interest in the urban outcomes of globalization is focused on a limited number of iconic 'global' or 'world' cities. Most places however will never attain that status. They are more likely to play limited and specialized roles in a world economy increasingly dominated by flows. Emerging Nodes in a Global Network looks at the temporal and volatile ways in which two such cities, Frankfurt and Tel Aviv, engage the global economy. The central thesis of the book contends that the current round of globalization is characterized by places selectively functioning as nodes within global networks. Drawing on a combination of qualitative and quantitative empirical studies of leading sectors in Frankfurt and Tel Aviv (financial and business services, high technology, air transportation, tourism and cultural industries), the process of network formation is systematically analyzed and the role of national and regional policy is highlighted. Audience: This book will be of major interest to academics, researchers, practitioners and policy makers in the areas of urban and economic geography, public policy and economic development. It also provides valuable material for government officials and regional and national agencies involved in metropolitan planning and development.