Making city lights shine brighter

Shahid Yusuf, Danny Leipziger, 3 March 2014

Vox readers can download CEPR Policy Insight 71 for free here.

URL: http://www.cepr.org/active/publications/policy_insights/viewpi.php?pino=71
Topics: Development
Tags: agglomeration, cities, externalities, growth, Inequality, slums, urbanisation

Making city lights burn brighter

Danny Leipziger, Shahid Yusuf, 3 March 2014

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Urbanisation and per capita GDP are well correlated.1 According to a recent estimate by Gilles Duranton using cross-country data for 2012 (see Figure 1), each percentage point of urbanisation is associated with a five-percentage-point increase in GDP per capita, with urbanisation apparently explaining 60% of the variation in incomes.

Topics: Development
Tags: agglomeration, cities, externalities, growth, Inequality, slums, urbanisation

Historical trends of agglomeration to the capital region

Takatoshi Tabuchi, 28 November 2013

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Postwar trends

The first stylised fact about regional population distribution is the steady progress of urbanisation. As shown in Figure 1, the urban population percentage has been steadily growing for a long time all over the world (United Nations 2011).

Figure 1. Urban population share by major geographical area

Topics: Migration
Tags: agglomeration, capital cities, cities, new economic geography, urbanisation

Competing successfully in a globalising world: Lessons from Lancashire

Nicholas Crafts, Nikolaus Wolf, 22 October 2013

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The ‘first globalisation’ of the 19th century – driven by the substantial falls in trade costs associated with the age of steam – saw the ‘First Unbundling’ (Baldwin 2006), in which industrial production and consumption became spatially separated, often by large distances.

Topics: Economic history, International trade
Tags: agglomeration, cities, cotton, globalisation, Industrial Revolution, industrialisation, Lancashire, trade, wages

Do large departments make academics more productive? Agglomeration and peer effects in research

Clément Bosquet, Pierre-Philippe Combes, 21 June 2013

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Every academic has an opinion about what makes a good department. Surprisingly, there are few hard studies quantifying this precisely, although possible implications for an optimal design of education and research policies are numerous. Aghion et al. (2010) is an example of the general recent concern about the optimal design and governance of universities.

Topics: Education, Productivity and Innovation
Tags: agglomeration, France, Peer Effects

Caution to place makers: Greater firm density does not always promote incumbent firm health

William Kerr, Oliver Falck, Christina Günther, Stephan Heblich, 11 February 2013

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A common theme in economic geography is that increasing returns to scale at the local level are essential for explaining the geographical distribution of economic activity. These agglomerative forces are often cited as a rationale for policy intervention to attract new firms to areas.

Topics: Industrial organisation
Tags: agglomeration, clusters, East Germany, Germany

Why policies may need to be place-based in order to be people-centred

Jose Enrique Garcilazo, Joaquim Oliveira Martins, William Tompson, 20 November 2010

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In a recent Vox column “Regional Development Policies: Place-Based or People-Centred?”, Indermit Gill (2010), the World Bank’s Chief Economist for the Europe and Central Asia Region, argues strongly for the “spatially blind” approach to regional development policies advocated by the Bank’s 2009 World De

Topics: Development
Tags: agglomeration, aid, development, economic growth

You can raise productivity through R&D, but geography matters a lot

Sergey Lychagin, John Van Reenen, Margaret E Slade, Joris Pinkse, 25 October 2010

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President Obama recently proposed increasing the generosity of the US research and development (R&D) tax credit system and making it a permanent feature of the US tax code. This was justified by the idea that more R&D would lead to growth, not just worldwide but particularly in the US.

But such a bold statement raises some fundamental questions:

Topics: Productivity and Innovation
Tags: agglomeration, economic geography, innovation, productivity and innovation, research and development

Multinational firms, agglomeration, and global networks

Laura Alfaro, Maggie Chen, 8 January 2010

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Recent decades have witnessed an explosion in the activities of multinational corporations. Sharp declines in trade and telecommunication costs have led to increasing separation of management and production facilities within individual firms. The rise of multinational firms represents a particularly extreme example of expanding geographic distance between firm leadership and production.

Topics: Industrial organisation, International trade
Tags: agglomeration, externalities, multinationals

Clustering together abroad: South Korean multinationals in China

Peter Debaere, Joon H. Lee , Myungho Paik, 3 June 2009

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Foreign direct investment has played a prominent role in the current wave of globalisation. The World Investment Report (UNCTAD, 2008) notes that total worldwide FDI flows in 2007 amounted to 1.8 trillion dollars. More than 25% of these flows were to developing economies.

Topics: International finance
Tags: agglomeration, foreign direct investment, spillovers

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