Agglomeration Economies Research Articles

Is environmental regulation the answer to pollution problems in urbanizing economies?

This paper seeks to better understand the persistent environmental problems in urbanizing economies. We examine the effectiveness of environmental policy in an economy with agglomeration economies and endogenous firm relocation and entry/exit. We show that, although environmental regulation is effective in the short run, in the presence of agglomeration economies, spatial relocation of firms in response to environmental regulation can undermine the effectiveness of regulations, rendering them less effective or even ineffective. In fact, we show that regulation might even be counter-productive, i.e., exacerbate environmental problems, at certain stages of development. We present initial empirical evidence in the context of water pollution in China that demonstrates the importance of agglomeration economies in determining the impacts of environmental regulation.

Модель оценки преимуществ проживания в городах России

At the present stage of globalisation, the phenomenon of urban agglomerations and the need to create conditions to fully realise agglomeration effects require methodological approaches and models for assessing the factors of location efficiency in Russian cities. The study aims to assess the aggregate function of urban production of the effectiveness of benefits of living by using the indicator “the cost per square meter of real estate in the primary market”. The presented author’s methodology for assessing the aggregate function of urban production of average location benefits differs from traditional approaches: it includes an analysis of conditions for the interaction of independent variables and dummy cities, as well as a model with dummy variables. Cities with a population of more than 100 thousand people (megacities, big and large cities) of the Central and Volga Federal Districts in the period 2001-2020 were examined. The testing of the proposed method on the entire sample of cities showed that an increase in high urban functions promotes economic growth of a city and enhances its attractiveness, with a pronounced agglomeration effect. Analysis of properties of large cities in the Central Federal District revealed the inverted U-shaped relationship between location efficiency and the city size, reflecting the disadvantage of the excessively large size. The simulation results demonstrate that high urban functions also play an important role in explaining increasing returns. In order to turn the risk of diminishing returns into the agglomeration economy, it is necessary to invest in high-performance workplaces, research and development. The findings can be used to create and implement policies for the development of urban agglomerations in the Russian Federation.

Discussion on the characteristics and causes of county economic agglomeration and discrepancy in Henan Province from 2005 to 2021

Discussion on the characteristics and causes of county economic agglomeration and discrepancy in Henan Province from 2005 to 2021

Agglomeration effects in a developing economy: evidence from Turkey

AbstractI estimate the role of agglomeration economies and other local factors on productivity differences across Turkish provinces, which are some of the highest seen in OECD countries. Using a novel administrative dataset and historical instruments to deal with estimation concerns, I find that the elasticity of productivity to density is higher than in developed countries. Moreover, using an individual panel at the regional level, I find weak sorting effects for workers, contrasting with evidence from developed countries. These results suggest that urbanization patterns could be operating differently in developing countries.

Spatio-temporal variations, spatial spillover, and driving factors of carbon emission efficiency in RCEP members under the background of carbon neutrality.

Improving carbon emission efficiency (CEE) has emerged as a critical way for Regional Comprehensive Economic Partnership (RCEP) members to promote carbon reduction in the context of climate change mitigation and carbon neutrality. The super-efficiency slacks-based measure (SBM) model, which considers non-desired outputs, is adopted to comprehensively assess the current state and trend of CEE in 15 RCEP countries from a spatio-temporal dynamic perspective, and the global Malmquist-Luenberger (GML) index is coupled to quantify the spatial and temporal differences and dynamic changes. Following that, taking into account the spatial characteristics of CEE, the extended STIRPAT model and the spatial Durbin model are combined to further investigate the primary influencing factors of CEE. It is found that (1) the CEE of RCEP members is generally poor and unevenly distributed in temporal and spatial dimensions, with significant room for improvement and an overall positive spatial autocorrelation; (2) CEE varies considerably among RCEP members, with developed countries far outstripping developing countries in terms of both the current status and trend of CEE; (3) on a dynamic level, the GML index exhibits W-shaped fluctuations, with technological progress acting as the dominant force; and (4) in terms of spillover effects, affluence and economic agglomeration inhibit CEE enhancement, whereas technology level and investment capacity facilitate it. The findings will be useful in developing carbon-neutral plans for various countries as well as coordinated sustainable development for RCEP regions.

Spatial agglomeration effects on eSports events: An intra- and inter-industry and regional analysis approach

With the increasing popularity of eSports, tourism marketers and scholars are particularly interested in the spillover effects of large sporting events, as well as the motivation to attend them. Using a demand-driven model, this study explores the intra- and inter-regional agglomeration economics of public and private investment in eSports events on the entire industry. This research focuses on the Pangyo Techno Valley in Gyeonggi province, which South Korea has developed into the most innovative IT cluster hub. This research defines the ecosystem of eSports events tourism, which includes electronics, communication and broadcasting, entertainment, and tour-related businesses. Moreover, the findings reveal that the eSports events sector has a relatively high ripple effect on the wholesale and retail trade, as well as food products and beverage industries. In terms of regional agglomeration externalities, this study presents empirical evidence on the spillover economic effect of the eSports events ecosystem. When designing and implementing smart tourism-related regulations, policymakers must take eSports events ecosystems into account.

Unraveling urban advantages—A meta‐analysis of agglomeration economies

AbstractA large body of empirical literature considers the productive advantages of cities, or “agglomeration economies.” We present a meta‐analysis of this literature that draws on 6684 agglomeration elasticities from 294 studies spanning 54 countries and six decades. We find that elasticities are likely to lie in the range 0.015–0.039 and, like earlier reviews, that the controls enabled by detailed data are associated with smaller estimates. We make five main contributions: First, we find evidence that publication selection imparts a positive bias to the literature; second, we adopt novel methods that tend to yield more precise parameter estimates than conventional approaches; third, unlike earlier reviews, we do not find large differences between most countries nor an association with national income; fourth, we report new associations, for example between elasticities and the spatial scope of agglomeration, which may reflect underlying microeconomic channels; and fifth, we find evidence that elasticities for manufacturing sectors have fallen in recent decades, possibly due to lower freight costs and stricter environmental regulations.

Agglomeration and Spatial Distribution of E-Commerce Sector in China: A Case Study of Jiangsu Province

The research intends to examine the pattern of e-commerce and to investigate the clustering of e-commerce activities in the Jiangsu Province of China. The development of “Taobao villages” has become a new growth pattern for the economy of rural areas in China. This typical model of e-commerce industry agglomeration has generated huge sales, which is not only important for local economic development but also has some implications for other places with underdeveloped e-commerce industries. The proposed study combines theory and empirical evidences based on panel data generated from “Taobao villages” in all 13 regions of Jiangsu Province, China. To explore the spatial distribution and economic returns of e-commerce in the perspectives of economic agglomeration, data of five years—2016 to 2020—is exploited. Samples of regions are selected based on different agglomeration types. The type of e-commerce industry agglomeration in the form of “Taobao villages” is measured by constructing a spatial weight matrix. Using the facts and figures of the five years, a Moran scatterplot and a Local Indicators of Spatial Association (LISA) cluster map are drawn. From the perspective of economic agglomeration, the e-commerce industry in Jiangsu Province presents three basic patterns: High-High cluster, Low-High cluster, and Low-Low cluster. In addition, the Location Quotient (LQ) was used to quantitatively characterize the agglomeration of “Taobao villages.” Findings of the analysis revealed that there is a positive spatial correlation between the clusters of Taobao villages, mainly between the H-H cluster and L-L cluster. The results are summarized and the most useful solutions for promoting the e-commerce industry in China. The empirical model proposed has great significance in e-commerce and may be used to enhance rural economy of China.

Equity-based linkages in the evolving process of industry enclaves: a case study of Suzhou Industrial Park, China

ABSTRACT Chinese policymakers have widely established special economic zones (SEZs) as key drivers to attract FDI, and by extension facilitate R&D and technology diffusion to realize industry upgrading. However, to the extent that SEZs might be regarded as enclaves, the extent to which subsidiaries of MNEs foster local linkages and transfer knowledge in SEZs remains unclear. This research investigates the state of the linkages generated by firms that have shareholders from incoming MNEs within an SEZ to see if these linkages show signs of knowledge diffusion in the local area. The empirical research is based on a case study of Suzhou Industrial Park (SIP) through secondary data collection on the equity investment of incoming MNEs within SIP and data from semi-structured interviews. The findings suggest that the organizational network of incoming MNEs in SIP is still internalized, and technology transfer through these linkages is weak – this despite SIP apparently having evolved from an enclave to an urban economic agglomeration.

The Impact of Economic Agglomeration on Green Total Factor Productivity: An Empirical Analysis from China's Yellow River Basin

The Impact of Economic Agglomeration on Green Total Factor Productivity: An Empirical Analysis from China's Yellow River Basin

Productivity advantage of large cities for creative industries

AbstractThis paper examines the productivity advantage of large cities for creative industries (CIs) in China. Using Chinese firm‐level data for CIs from 2012 to 2014, we find that agglomeration economies, rather than firm selection, determine the difference between the productivity distributions of CIs in large and small cities. There are heterogeneous effects of agglomeration economies, with stronger impacts on productive firms and firms in broadcasting and TV & film. We also find that the productivity advantage of large cities for CIs is stronger when the cities have better communication and transportation infrastructure. Our results imply that the efficacy of place‐based policies for developing CIs depends on local infrastructure.

City centrality, population density and energy efficiency

We use continuous night light data and LandScan population data to construct a monocentric index to measure whether a city tends to be a monocentric or polycentric spatial structure, and estimate the impact of such structure on energy efficiency by using a two-way fixed effects model. In order to solve the endogeneity of urban structure, the historical census data and topographic relief data at the city level are used to construct the instrumental variables. We find that an increase in the urban monocentricity index would significantly reduce the level of the urban energy intensity. Meanwhile, the relationship between monocentricity and urban energy intensity is U-shaped. When the degree of monocentricity is at relatively low level, its impact on energy efficiency is positive, implying the dominance of agglomeration effect. When economic agglomeration is greater than a certain degree, the impact of monocentricity becomes negative which results from the dominance of congestion effect. Moreover, impact of urban structure on energy intensity varies with urban population density. An increase in population density would weaken the negative impact of monocentricity on energy intensity, that is, in sparsely populated cities, the monocentricity is more conducive to energy saving. In terms of city form, monocentric structure may improve energy efficiency in the cities with poor transportation infrastructure more than in the cities with good transportation infrastructure. Monocentricity facilitates energy efficiency primarily by increasing corporate innovation and saving commuting time and distance. We perform a series of robustness tests and the findings are basically consistent with the baseline result. Our findings suggest that the cities at this stage should continue to strengthen the development of monocentricity, pay attention to compactness of urban spatial structure, and develop the polycentric structure cautiously. Meanwhile, in the development process, the local population density and the carrying capacity of the transportation infrastructure should be taken into consideration to avoid the negative effects caused by the congestion in main center.

Environmental effects of financial agglomeration under dual correlations of industry and space: Evidence from 286 prefecture-level cities in China

This paper is concerned with the environmental effects of financial agglomeration supporting green development for the entity economy at the city level. By analyzing panel data of Chinese 286 prefecture-level cities between 2007 and 2019, using an input-output method and the spatial Durbin model, the obtained results show that leasing and business services and manufacturing were the financial related industries. Financial agglomeration reduced the local and surrounding wastewater emission intensity, whereas the agglomeration of leasing and business services increased environmental pollution. The pollution reduction effect of industrial agglomeration exists but not all agglomerations can achieve green development. Further regional heterogeneity analysis of financial agglomeration revealed an increase in industrial wastewater pollution in the eastern economic belts and a decrease in the central and western regions. Overall findings suggest that inter-industry and regional coordination are crucial for shaping green cities through agglomeration economies.

Seeking the Optimal Dimension of Local Administrative Units: A Reflection on Urban Concentration and Changes in Municipal Size

In the search for a better administrative functioning as a key dimension of economic performances, changes in municipal boundaries and the creation (or suppression) of local administrative units reflect a progressive adjustment to a spatially varying population size and density. With intense population growth, municipal size reflects the overall amount (and spatial concentration) of services and infrastructures, being functionally related with agglomeration economies, land availability for building, and specific sociodemographic attributes of local communities. Based on these premises, the intrinsic relationship between settlement expansion, population growth, and municipal size in a metropolitan region of Southern Europe (Attica, hosting the Greater Athens’ area in Central Greece) was investigated in this study over nearly one century as a contribution to a refined investigation of the (changing) organization of local administrative units under a complete metropolitan cycle from urbanization to reurbanization. Based on descriptive statistics, mapping, (parametric and nonparametric) correlation coefficients, and econometric techniques, a quantitative analysis of the relationship between population size and density and municipal area provides pivotal knowledge to policy and planning adjustments toward a more balanced spatial distribution of population and administered land among local government units. Together with a slight decrease in the average municipal size over time, the average population density per municipal unit increased systematically, with a considerable reduction in spatial heterogeneity of settlements. The observed goodness-of-fit of the linear model explaining municipal area with population density, increased significantly over time. Empirical results of our study indicate that municipal size has slowly adjusted to population density across metropolitan areas, determining an imbalanced spatial distribution of resident population and a supposedly less efficient government partition. The recent administrative reform of local authorities in Greece (the so-called ‘Kallikratis’ law) seems to consolidate–rather than rebalance this organizational structure over space, reflecting spatially polarized settlements. Such conditions represent a base for informed analysis of the spatial structure of local administrative units as a pivotal element of economic sustainability and may contribute to the debate on the optimal size of municipalities at both urban and metropolitan scales of governance.

Evidence of Input Sharing and Labour Pooling in an Automobile Cluster of Central India

Literature on agglomeration economies firmly establishes the trinity of Input sharing, Labour pooling, and Knowledge spillover, originally conceived by Alfred Marshal, as the foundation of any industrial agglomeration or cluster. Acknowledging the rationale of the trinity, this paper documents the pieces of evidence of Input sharing and Labour pooling in a planned automobile cluster of Pithampur, a backward region of the state of Madhya Pradesh in India. The development of the automobile cluster has transformed Pithampur from a bunch of villages to an automobile hub of central India. Knowledge spillover has been kept out of this study due to the paucity of data. These pieces of evidence are collected through primary and secondary data. It is found from the pieces of evidence of input sharing that both union and state government have played a significant role in developing industry-related infrastructures in Pithampur. The availability of supporting infrastructure, services and various fiscal incentives has helped the firms enjoy economies of scale and attracts potential investors to establish their firms in Pithampur. The evidences of labour pooling capture the dramatic changes in the demography of Pithampur in terms of population growth, sex ratio, occupational shift, migration, etc.

Carbon emission effects of publicly planned logistics nodes: experience from Chengdu, China.

Both academics and policymakers regard publicly planned logistics nodes (PPLN) as a potential measure to promote logistics agglomeration and mitigate environmental damage caused by logistics activities. However, such measure may lead to non-linear carbon emission effect from the perspective of agglomeration economy, and empirical evidences are yet to be found to verify this inference. This paper uses DID method and mediating effect models to explore the effects and mechanisms of PPLN on CO2 emissions with panel data from 2000 to 2017 in Chengdu, China. Our findings show that PPLN promotes the agglomeration of both small and large-scale logistics enterprises and increases carbon emissions. In addition, the agglomeration of large-scale logistics enterprises can reduce carbon emissions; the opposite is true for smaller ones. Despite the continuous diminishing of the carbon emission increase, the emission-reduction effect has not been achieved through PPLN operations. Based on the results, the study recommends that the government should appropriately determine the location and scale of PPLN, advocate green construction and industrial upgrading, and adopt differentiated regulatory and incentive measures for enterprises. Logistics enterprises can increase their investment in green technologies and strengthen cooperation with their customers.

Economic Growth, Investment, Economics Agglomeration, And Regional Development Inequality In West Java Province

Abstract— High economic growth is not always followed by equitable development in a region. This study aims to see the effect of economic growth, investment, and economic agglomeration on regional development inequality in West Java Province. Timeseries data regression analysis West Java Province in the period of 2004–2018 to estimate the effect of economic growth, investment and economic agglomeration on regional development inequality. The results obtained are that economic growth has a significant positive effect on development inequality, amd economic agglomeration has a positive effect on regional development but not significant, while investment has a significant negative effect on development inequality in Java. Keywords— Economic Growth, Investment, Economic agglomeration, Regioanl Development Inequlity.

Where are craft breweries located? The role of agglomeration, tourism, and know-how

The objective of this article is to identify main drivers determining the geographical location of craft breweries in Slovakia. The main contribution of the article to the literature is to provide empirical evidence on the location determines of small firms as well as the focus on the Eastern European country both of which are less explored in the literature. The article employs a conditional logit model on a regional panel data dataset of craft breweries and location attributes covering 79 counties in Slovakia for the period 1995–2019. The estimated results suggest that agglomeration economies are key determinants of location choices. However, the agglomeration of small breweries has notably strong effect, while the agglomeration of large breweries and past brewing experience are statistically insignificant in affecting location choices. Further, important drivers of craft breweries location choices are demand factors linked to tourist sector development. Other drivers, such as urban effects, life quality and labour market conditions, seem not to play role or have rather a weaker impact.

Location factors and agglomeration economies in the hotel industry: the case of Spain

PurposeThis research investigates the effect of accessibility to points of tourist interest (buffer) and direct and indirect spatial spillover effects of agglomeration economies on tourism industry revenues in Spain.Design/methodology/approachData were collected from the Bureau van Dijk's (BvD) Orbis global database. The data were analysed using a spatial econometric model and the Cobb–Douglas production function.FindingsThis study reveals that hotels located inside the buffer zone of points of tourist interest achieve better economic outcomes than hotels located outside the buffer. Furthermore, the results show that there is a direct and indirect spatial spillover effect in the hotel industry.Practical implicationsThe results provide valuable information for identifying areas where the agglomeration of hotels will produce a spillover effect on hotel revenue and the area of influence of location characteristics. This information is relevant for hotels already established in a destination or when seeking a location for a new hotel.Social implicationsThe results of this study can help city planners in influencing the distribution of hotels to fit desired patterns and improve an area's spatial beauty.Originality/valueThe paper provides insights into how investment, structural characteristics, reputation and location affect hotel revenue.

Study on credit expansion to coordinated development of Urban agglomeration economy

According to the growth pole theory, financial agglomeration has an important impact on economic growth and coordinated development of regional economy.How to realize regional coordinated development through optimal allocation of factors of production has become an important problem in regional economics in the new era.Based on the urban agglomeration mentioned in the "14th Five-Year Plan", this paper firstly evaluates the coordinated development of regional economy, and then studies the spatial effect of credit expansion, discusses the factors influencing the backflow effect and diffusion effect of credit expansion, so as to put forward policy suggestions for the coordinated development of financial support.