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Lights along the frontier: Convergence of economic activity in the proximity of the Polish-German border, 1992-2012

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Presented by Michal Myck during the Academic Conference 2019.

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Lights along the frontier: Convergence of economic activity in the proximity of the Polish-German border, 1992-2012

  1. 1. Lights along the frontier: convergence of economic activity in the proximity of the Polish-German border, 1992-2012 Michał Myck (joint work with Ronny Freier and Mateusz Najsztub) SITE Academic Conference, 16-17/12/2019
  2. 2. • Theoretical background for analysis spatial distribution of economic activity • New Economic Geography: smooth distribution of economic activity around agglomeration centres (Krugman 1991; see also: Ottaviano & Thisse 2004; Fujita & Mori 2005; Scott 2004) • significant discontinuities in the distribution of activity – in particular due to natural or man-made constraints (first and second nature factors) • Economic growth literature: economic convergence with spread of technologies and differences in returns to capital and labour (Barro et al. 1991; Bernard & Durlauf 1995; Acemoglu et al. 2001; Kline & Moretti 2013) • Number of related strands of literature: • role of history for current economic development (Davis & Weinstein 2002; Bai & Jia 2019; Bleakley & Lin 2012; Heblich et al. 2016) • politics and regional development, spatial proximity to power (Ades & Glaeser 1995, Egger et al. 2017, Bai & Jia 2019, Hodler & Raschky 2014) Motivation and key objectives
  3. 3. • The role of borders and physical infrastructure for regional economic development (and degree of economic convergence) • role of proximity to national borders for regional development • role of proximity to entry points (border bridges) • Lifting spatial constraints and development: end of visa-requirements in April 1991 and cross-border mobility • increased cross-border trade and market access (Redding & Sturm 2008), through traffic • greater mobility of labour: sorting and displacement effects (Roback 1982, Dustmann et al. 2017) • increased cross-border competition (Cassette et al. 2012) Motivation and key objectives
  4. 4. • Focus on the region in proximity of the Polish-German border Motivation and key objectives
  5. 5. Measuring economic development through night-time lights: • Regional development and data availability: • consistency and continuity of data series • administrative changes and data availability • international comparability of administrative data • Nighttime illumination data from the American National Oceanic and Atmospheric Administration, NOAA, available in consistent format from 1992-2012, (Clark et al., 2017; Henderson et al., 2012): • based on NASA satellite night-time photographs; • annual data; DMSP-OLS format; • each pixel approx. 1km*1km; • sum/average of nighttime illumination measures for each year for every municipality; • problems: blurring, precision, bottom censoring and top coding (at pixel level).  Data used as proxy for regional economic development (Egger et al. 2017; Hodler & Roschko, 2014) Economic development along the PL-DE border
  6. 6. Measuring economic development through night-time lights: Economic development along the PL-DE border Source: US NOAA data and Mapbox; compiled by Mateusz Najsztub 1992
  7. 7. Measuring economic development through night-time lights: Economic development along the PL-DE border Source: US NOAA data and Mapbox; compiled by Mateusz Najsztub 2012
  8. 8. Measuring economic development through night-time lights: Economic development along the PL-DE border Selected municipalities: night-time lights intensity in 1992 Selected municipalities: night-time lights intensity in 2012
  9. 9. Measuring economic development through night-time lights: Economic development along the PL-DE border Germany Poland Number of municipalities 488 193 Mean area [km2] 57.9 (56.8) 144.4 (90.9) Mean distance to border [km] 45.6 (29.9) 49.7 (28.7) Mean distance to nearest bridge [km] 47.6 (29.0) 51.5 (28.1) Mean travel time to nearest bridge [h] 0.76 (0.43) 0.85 (0.44) Notes: municipalities along the PL-DE river border up to 100 km to the border; outlier municipalities excluded from analysis due to high proportion of top-coded lights pixels in 1992; municipality borders as of 2013 (DE) and 2012 (PL); mean municipal total lights calculated using average pixel values per municipality and weighted by municipality area. Source: own calculations based on data from: GeoBasis-DE / BKG 2013, PRG 2012, DMSP OLS v4 and OpenStreetMap. Selected municipalities: sample and descriptive statistics
  10. 10. Measuring economic development through night-time lights: Economic development along the PL-DE border Selected municipalities: night-time lights intensity changes between 1992 and 2012
  11. 11. Convergence in economic activity on both sides of the PL-DE border: 𝑦𝑖𝑡 = 𝛼 + ෍ 𝑡 𝑇 (𝛽𝑡 𝑑_𝑦𝑒𝑎𝑟𝑡 + 𝛾𝑡 𝑑_𝑦𝑒𝑎𝑟𝑡 ∗ 𝑃𝐿𝑖) + 𝜀𝑖𝑡 Economic development along the PL-DE border Changes in the DE-PL difference in light intensity, 1992-2012: a) Average lights c) (Log) total lightsb) (Log) average lights Notes: a) difference in average pixel values per municipality, b) difference in log of average pixel values per municipality, c) difference in (log) total night-time lights; in all cases measured through coefficients on country*year interaction in a linear regression; year fixed effects included; regressions in (a) and (b) weighted by municipality area; standard errors clustered on municipality level; 95% CI.
  12. 12. Examining the role of distance: Distance to border and levels of light intensity: Economic development along the PL-DE border Distance to border and lights intensity: 1992 (bars) & 2012 (arrows) Distance to border and change in lights intensity: 2012-1992
  13. 13. Examining the role of distance: Distance to border and levels of light intensity: Economic development along the PL-DE border a) Distance to border b) Distance to border bridge Notes: Distance to the border measured from centroids of municipalities; municipalities with bridges on the border excluded; standard errors clustered on municipality level. Source: own calculations based on GeoBasis-DE / BKG 2013, PRG 2012, DMSP OLS v4 and OpenStreetMap data. 𝑦𝑖𝑡 = ෍ 𝑡 𝑇 𝛽𝑡 𝑑_𝑦𝑒𝑎𝑟𝑡 + 𝛾𝑡 𝑑_𝑦𝑒𝑎𝑟𝑡 ∗ 𝑃𝐿𝑖 + 𝛿𝑡 𝑃𝐿 𝑑_𝑦𝑒𝑎𝑟𝑡 ∗ 𝑃𝐿𝑖 ∗ 𝑑𝑖𝑠𝑡𝑖,𝑃𝐿 + 𝛿𝑡 𝐷𝐸 𝑑_𝑦𝑒𝑎𝑟𝑡 ∗ 𝐷𝐸𝑖 ∗ 𝑑𝑖𝑠𝑡𝑖,𝐷𝐸 + 𝜀𝑖𝑡
  14. 14. Examining the role of distance: Distance to border and changes in light intensity: Economic development along the PL-DE border (Log) total lights: 1992-2012 (Log) total lights: 1992-1994 (Log) total lights: 2010-2012 DE * distance to border 0.00157+ 0.00161* 0.00085+ (1.68) (2.37) (1.73) PL * distance to border -0.00672** -0.00183 0.00099+ (-2.60) (-1.53) (1.73) DE * distance to bridge 0.00209* 0.00169* 0.00064 (2.15) (2.37) (1.28) PL * distance to bridge -0.00668* -0.00200 0.00096+ (-2.53) (-1.63) (1.65) Constant 0.348*** 0.320*** -0.0676+ -0.0743+ -0.436*** -0.428*** (7.29) (6.46) (-1.78) (-1.85) (-15.24) (-14.49) N 639 639 637 637 650 650 R-squared 0.228 0.228 0.0170 0.0176 0.0142 0.0121 Notes: Municipalities up to 100km from the PL-DE border; municipalities with border bridges and those within range of 20 km from Berlin excluded; OLS results with standard errors clustered at municipality level; country effects included, t statistics in parentheses, statistical significance: + p < 0.10, * p < 0.05, ** p < 0.01, *** p < 0.001. Source: own calculations based on GeoBasis-DE / BKG 2013, PRG 2012, DMSP OLS v4 and OpenStreetMap data. ∆𝑦𝑖𝑡= 𝛼 + 𝛾 ∗ 𝑃𝐿𝑖 + 𝛽1 𝑑𝑖𝑠𝑡𝑖 ∗ 𝑃𝐿𝑖 + 𝛽2 𝑑𝑖𝑠𝑡𝑖 ∗ 𝐷𝐸𝑖 + 𝜀𝑖𝑡 Changes in night-time lights along the Polish-German border: 1992-2012
  15. 15. Conclusions: • Satellite images of night-time lights are used to study convergence in economic development in proximity of the Polish-German border from 1992-2012 • Analysis confirms high degree of convergence largely due to: • slower pace of growth on the German side of the border; • more intensive growth in night-time light intensity on the Polish side in municipalities closer to the border (compared to those further east) • Distance to border and economic activity”: • DE: only weakly (positively) related throughout the examined period • PL: role of distance in differentiation of activity weakens over time • however, in last years of analysis (2020-2012) shows signs of weakening of development in municipalities closer to the border compared to those further away • We cannot separately identify the role of distance to border vs distance to closest border bridge Economic development along the PL-DE border

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