Is Gibrat's law robust when cities interact each other?

Abstract

AbstractGibrat's law asserts that the growth of a city is independent of its initial size, but the populations of cities display a pattern of systematic agglomeration. This pattern may emerge because some cities are more attractive than others. We analyse the relationship between the growth and size of 1,188 cities in the South Region of Brazil using municipal data between 2000 and 2010. The selected model is the spatial Durbin model (SDM) that controls for temporal and spatial dependence, relevant omitted variables, economic factors, local amenities and externalities. The results indicate that Gibrat's law is not robust when cities interact.