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Urban growth drivers in a Europe of sticky people and implicit boundaries

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  • Cheshire, Paul
  • Magrini, Stefano

Abstract

We investigate urban GDP per capita growth across the EU12 using data for functionally defined cities—rather than administrative regions. We test hypotheses on the role of human capital, EU integration and fragmentation of urban government and explore spatial dependence and mechanisms of spatial interaction. Results are acceptable on standard econometric tests without measures of spatial interaction but there is spatial dependence. If variables reflecting spatial adjustment are included, they are statistically significant and eliminate spatial dependence. Not only do the results now provide consistent estimates of parameters, but they also support relevant theoretical insights and show national borders are still significant barriers to economic adjustment. People in Europe are sticky so it is unreasonable to assume spatial disparities will disappear. Our findings also imply that cities in Europe form national rather than a single continental system.

Suggested Citation

  • Cheshire, Paul & Magrini, Stefano, 2008. "Urban growth drivers in a Europe of sticky people and implicit boundaries," LSE Research Online Documents on Economics 30774, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:30774
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    More about this item

    Keywords

    Growth; cities; local public goods; spatial adjustment; local economic growth;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R50 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - General

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