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Average city size and economic growth

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  • Susanne A. Frick
  • Andrés Rodríguez-Pose

Abstract

This article examines the link between average city size and aggregate economic growth in a total of 114 countries for the period between 1960 and 2010. The analysis—which includes pooled two-stage least-squares (2SLS), panel data analysis, system generalized method-of-moments (GMM) estimator and an instrumental variable (IV) approach—finds that, in contrast to the prevailing view, there is no universal positive relationship between average city size and economic growth and that the results vary between high-income and developing countries. In high-income countries, there is consistent evidence of a positive albeit decreasing link between city size and economic growth. In contrast, the relationship does not hold for developing countries, for which most of the coefficients display insignificant results or point towards a negative connection between both factors.

Suggested Citation

  • Susanne A. Frick & Andrés Rodríguez-Pose, 2016. "Average city size and economic growth," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 9(2), pages 301-318.
    • Handle: RePEc:oup:cjrecs:v:9:y:2016:i:2:p:301-318.
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    File URL: http://hdl.handle.net/10.1093/cjres/rsw013
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    Cited by:

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    3. Rodríguez-Pose, Andrés, 2017. "The revenge of the places that don’t matter (and what to do about it)," CEPR Discussion Papers 12473, C.E.P.R. Discussion Papers.
    4. Roberto Ganau & Andrés Rodríguez-Pose, 2022. "Does urban concentration matter for changes in country economic performance?," Urban Studies, Urban Studies Journal Limited, vol. 59(6), pages 1275-1299, May.
    5. Andres Rodriguez-Pose, 2018. "The revenge of the places that don?t matter (and what to do about it)," Papers in Evolutionary Economic Geography (PEEG) 1805, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2018.
    6. L Carlos Freire-Gibb & Luis Tapia Carrillo, 2019. "Inclusive institutions and local economic evolution: Perspectives from Guayaquil and Quito," Local Economy, London South Bank University, vol. 34(5), pages 471-488, August.
    7. Sabyasachi Tripathi, 2021. "Towards sustainable urban system through the development of small towns in India," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 777-797, June.
    8. Rodríguez-Pose, Andrés & Frick, Susanne, 2017. "Big or small cities? On city size and economic growth," CEPR Discussion Papers 12324, C.E.P.R. Discussion Papers.
    9. Ravi Kanbur & Luc Christiaensen & Joachim De Weerdt, 2019. "Where to create jobs to reduce poverty: cities or towns?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(4), pages 543-564, December.
    10. Anping Chen & Tianshi Dai & Mark D. Partridge, 2021. "Agglomeration and firm wage inequality: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 61(2), pages 352-386, March.
    11. Andrés Rodríguez‐Pose & Jamie Griffiths, 2021. "Developing intermediate cities," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 441-456, June.
    12. Łukasz Piętak, 2022. "Regional disparities, transmission channels and country's economic growth," Journal of Regional Science, Wiley Blackwell, vol. 62(1), pages 270-306, January.
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    14. Mingshu Wang & Ben Derudder & Xingjian Liu, 2019. "Polycentric urban development and economic productivity in China: A multiscalar analysis," Environment and Planning A, , vol. 51(8), pages 1622-1643, November.

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    JEL classification:

    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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