Agglomeration Economies Research Articles

It’s not me, it’s you: internal migration and local wages in Great Britain

ABSTRACT Differences in regional incomes are large and persistent in many countries. On the one hand, internal migration from low- to high-income regions might eradicate these differences over time. On the other hand, internal migration might exacerbate disparities, as receiving regions benefit from incoming skills and agglomeration economies. This paper estimates the effect of internal in- and out-migration on the earnings of employees who do not move, using a panel of employee records from Great Britain between 2004 and 2018. Employees are tracked and identified as internal migrants if they start working in a new travel-to-work area (TTWA), representing functional labour market areas. The share of in- and out-migrants is significantly correlated with earnings and earnings growth of non-migrants in a TTWA. The results show that in-migrants have an immediate negative effect on local earnings of non-migrants. After three years, in-migration is positively correlated with earnings growth. These effects are exclusively driven by urban areas. Out-migrants have no significant effects. The results provide some evidence that labour mobility can be used as a tool to encourage local growth, albeit with significant adjustment costs.

Spatial association network of carbon emission performance: Formation mechanism and structural characteristics

To enhance regional carbon emission performance (CEP), understanding the spatial association characteristics of CEPs in cities has emerged as a pivotal strategy for the Chinese government to address climate issues. In this study, the formation mechanism of the CEP spatial network is illustrated and a super-efficient SBM model used to measure the CEP of each city in the Yangtze River Delta (YRD) from 2003 to 2018. Subsequently, the structural characteristics and influencing factors of the CEP network were explored using a macro-micro-individual analysis framework. The results showed that the CEP of regional cities exhibited clear network structural characteristics, with a continuous strengthening of spatial association. The motif structure type with reciprocity and agglomeration played a decisive role in the network. The low-carbon development of the YRD mainly depended on the driving effect of the core cities; however, there was a noticeable disparity in individual centrality between the core cities and the others. Geographic proximity and differences in economic agglomeration, open policy, and transportation had a significant positive impact on the CEP network. Conversely, disparities in industrial structure, population agglomeration, and technological innovation were not conducive to network formation. Based on these findings, policies to promote the low-carbon transition in the YRD have been proposed.

Urbanization, economic agglomeration and economic growth

Are Chinese cities too agglomerated, and are production factors continuing to flow to cities?In recent years, research on this issue has attracted more and more attention from academics, for the research on this issue, academics generally believe that urbanization has a positive role in promoting economic growth, but whether urbanization will bring economic agglomeration and what is the role of economic agglomeration on the development of the economy? The research on this issue is still insufficient, therefore, Based on the panel data of 27 provinces from 2006 to 2020, it is generally believed that urbanization has a positive role in promoting economic growth. This paper adds economic agglomeration factors and uses a spatial econometric model to test the spillover effect of urbanization growth. The main conclusions are as follows: First, urbanization and economic agglomeration have a positive effect on economic growth, and there is a spatial spillover effect. Secondly, the advancement of urbanization is closely associated with economic growth, particularly in relation to the development of economic agglomeration. When economic agglomeration is based on a single-center model, it tends to impede urbanization and economic progress. In contrast, an economic agglomeration model with multiple centers has the potential to stimulate urbanization and further enhance economic growth. Thirdly, it is worth noting that the influence of urbanization on economic growth varies across different regions. Factors such as geographical location, resource availability, and local economic conditions contribute to this regional variation.

The Impact of E-Commerce Transformation of Cities on Green Total Factor Productivity

The e-commerce-oriented transformation of cities is an important measure to enhance the vitality of economic development, improve the efficiency of resource allocation, and provide a new boost to the green and high-quality development of regions. Taking the quasi-natural experiment of national e-commerce demonstration city construction as the starting point, using the panel data of 281 prefecture-level cities in China from 2005 to 2021, we measure the green total factor productivity of cities by using the super-efficient SBM model with non-expected outputs and the global reference GML index method, and use the multi-period propensity score matching double-difference method to examine the impact of urban e-commerce-oriented transformation on the green total factor productivity of the city and the intrinsic mechanism of the effect. The results show that the urban e-commerce transformation policy can significantly promote regional green total factor productivity, and this result still holds after a series of robustness tests, such as changing the time point of the policy, randomly selecting the placebo proposal for the treatment group, and changing the matching method; the effect is regionally heterogeneous, and is more pronounced in large cities, non-provincial capitals, eastern cities, central cities, and non-resource-based cities; the urban e-commerce transformation mainly promotes the improvement of urban green total factor productivity through three channels: the industrial structure upgrading effect, the economic agglomeration effect, and the green technology innovation effect.

Coworking and local development outside metropolitan areas in Sweden

Through a mixed methods approach, this paper explores how coworking as a phenomenon manifests itself in Sweden, and, using the foundations of agglomeration economy theory as a lens, discusses what impact the occurrence of coworking spaces might have on local and regional development in Sweden's rural regions.Our findings show that the occurrence of coworking providers in Sweden is much more widespread than previously known, as there are far more spaces than popular aggregation sites suggest - our study found that for Sweden they only show 14–18 percent of the actual number of spaces available. In our interviews with members and owners, we used Duranton and Puga's (2004) pillars for agglomeration as a sorting mechanism, which showed that sentiments that fit the themes “matching”, “sharing” and “learning” crop up frequently when respondents explain their experiences. There is reason to go forward from this first, small study to explore how agglomeration economies at the micro level may influence surrounding society and regional economic growth in rural regions.We argue that the emergence of these spaces in rural regions might be a factor in the development of local economies by enabling agglomeration economies at the micro level. We also make the suggestion that gaining accurate information about the number and characteristics of coworking spaces in rural regions will allow for better informed policy decisions and labor market legislation when it comes to regional development.

High-speed railway ripples on the greenness: Insight from urban green vegetation cover

Less attention has been paid to the potential ecological pressures brought about by high-speed rail (HSR) while promoting urban prosperity. Based on Normalized Difference Vegetation Index and multiple socio-economic and ecological data, this study examines the local effect and spatial spillover effect of HSR operation on green vegetation coverage (GVC) in Chinese cities from 2003 to 2014, using a difference-in-differences design and spatial econometrics. Main findings are: 1) HSR operation has reduced GVC of local cities by about 6.0%. Because HSR-triggered economic agglomeration has intensified the land development and increased the pollution emissions (represented by SO2 and dust), leading to the degradation of local green vegetation. 2) The local effects of HSR on urban GVC are heterogeneous. HSR operation seriously cuts down the GVC for development-saturated cities, slightly undercuts the GVC for cities with conventional railways, but positively boosts the GVC for ecotourism cities. 3) HSR operation increases the GVC of adjacent cities (cities contiguous to HSR-located cities) by about 3.8%. Because the economic siphoning effect of HSR on adjacent cities reduces their land needs and pollution emissions, thus providing conditions for the vegetation expansion. Note that the HSR’s impact on adjacent cities’ GVC is influenced by the economic disparity between HSR cities and their neighbors. This study re-identifies the role of the transportation infrastructure in reshaping ecological patterns, providing insights into regional sustainable development.

Fostering regional innovation efficiency through pilot free trade zones: Evidence from China

The establishment of a pilot free trade zone (PFTZ) in an economy has motivated researchers to examine whether this supply-side policy fosters innovation efficiency and the associated transmission mechanism. The policy aligns with the concepts of agglomeration economics, which considers that clustering industries and firms in specific geographic areas can enhance knowledge exchange, economies of scale, network effects and access to diverse talent pools. Utilising provincial panel data spanning from 2006 to 2019, this study evaluates how China's PFTZs have affected regional innovation efficiency (RIE). The results indicate that PFTZs have the potential to enhance RIE, with the digital economy serving as an effective catalyst for bolstering this positive influence. Consequently, expanding the PFTZs and establishing new ones can prove pivotal in attracting additional foreign investments and stimulating RIE in the post-COVID era.

Research on the empowering effect of digital economy development on the green economic efficiency– empirical evidence from 285 Chinese cities

ABSTRACT Under the new normal, the digital economy, as an essential engine of the new round of digital revolution, plays a significant role in driving the development of a green economy. This article constructs a logical framework from the perspective of economic agglomeration, using panel data from 2005 to 2019 in China’s prefecture-level cities to empower green economic efficiency through the development of the digital economy. It then examines the enabling effect of the digital economy on green economic efficiency. The findings demonstrate that: (i) The digital economy has the potential to enhance the efficiency of the green economy, and this conclusion remains valid even after accounting for endogeneity and conducting a series of robustness tests. (ii) The results of the multi-mediation effect model demonstrate that enhancing economic agglomeration, facilitating industrial structure upgrade, and fostering technological innovation in energy saving and emission reduction serve as driving mechanisms for digital economic development to enhance urban green economic efficiency. (iii) In identifying heterogeneous characteristics, it was found that the enhancing effect of digital economic development on green economic efficiency is more pronounced in ‘megacities’, ‘large’, and ‘medium’ cities in eastern China, with better spillover effects.

The productivity effects of polycentricity: A systematic analysis of urban regions in Europe

AbstractWe focus on the extent to which polycentric urban regions can substitute for the agglomeration economies provided by large cities. Building on an open‐source software tool that helps identifying polycentric developments in urban regions, we analyse the spatial structure (in terms of size, dispersion and polycentricity) of 94 regions across 34 European countries and link this to their level of total factor productivity. We find that both more polycentric regions and more dispersed regions are associated with lower productivity levels.

Economic implications of autonomous adaptation of firms and households in a resource-rich coastal city

Climate change intensifies the likelihood of extreme flood events worldwide, amplifying the potential for compound flooding. This evolving scenario represents an escalating risk, emphasizing the urgent need for comprehensive climate change adaptation strategies across society. Vital to effective response are models that evaluate damages, costs, and benefits of adaptation strategies, encompassing non-linearities and feedback between anthropogenic and natural systems. While flood risk modeling has progressed, limitations endure, including inadequate stakeholder representation and indirect risks such as business interruption and diminished tax revenues. To address these gaps, we propose an innovative version of the Climate-economy Regional Agent-Based model that integrates a dynamic, rapidly expanding agglomeration economy populated by interacting households and firms with extreme flood events. Through this approach, feedback loops and cascading effects generated by flood shocks are delineated within a socio-economic system of boundedly-rational agents. By leveraging extensive behavioral data, our model incorporates a risk layering strategy encompassing bottom-up and top-down adaptation, spanning individual risk reduction to insurance. Calibrated to resemble a research-rich coastal megacity in China, our model demonstrates how synergistic adaptation actions at all levels effectively combat the mounting climate threat. Crucially, the integration of localized risk management with top-down approaches offers explicit avenues to address both direct and indirect risks, providing significant insights for constructing climate-resilient societies.

Dynamic Bidirectional Relationship between Urban Rail Transit and Urban Economy Agglomeration: A Case Study in China

Based on operation kilometers, amounts and station numbers of urban rail transit (URT) lines in a city, this study utilizes simultaneous panel data equations (SPDE) to comprehensively analyze the bidirectional dynamics of urban rail transit (URT) on urban economies. Drawing on data from 2010 to 2019 across 40 Chinese cities, we rigorously examine the SPDE model's robustness through elastic analysis and placebo tests. Economic variables within the SPDE framework are aggregated based on geographic population scales, yielding new endogenous variables that facilitate a deeper exploration of URT's impact on economic agglomeration. Our findings highlight URT's positive spillover effects, promoting both geographic and demographic economic agglomeration. Nevertheless, it is imperative to note that URT's capacity to ameliorate economic conditions remains constrained in cities with sluggish or stagnant development.

The impact of transportation and information infrastructure on urban productivity: Evidence from 256 cities in China

Improving total factor productivity is an important driving force for achieving high-quality economic development. Based on the panel data of 256 cities in China from 2009 to 2019, this paper investigates the effect of transportation and information infrastructure on urban productivity. The results show that transportation and information infrastructure promote urban productivity, and the effect in eastern regions and megacities is more obvious. The mechanism analysis shows that transportation infrastructure enhances urban productivity by promoting economic agglomeration, and information infrastructure enhances urban productivity by promoting labor mobility, economic agglomeration, financial agglomeration and industrial agglomeration. The spatial spillover effect shows positive spatial autocorrelation of urban productivity. Transportation and information infrastructure have significant positive spatial spillover effects on urban productivity. China should continue to promote the construction of transportation infrastructure, strengthen investment in information infrastructure, and promote the joint construction, sharing, coordination and integration of transportation and information infrastructure.

Technological intensity and local socio‐economic development

AbstractThis study aimed to empirically analyse the relationship between technological intensity profile and local socio‐economic development, using the theories of path dependence and microregional agglomeration economies. We applied the technique of linear hierarchical modelling with data from 645 municipalities in Brazil. Our results demonstrated that current municipal socio‐economic development could be explained by the local technological path itself but even more so by the technological intensity of the microregion. This article's contribution lies in its union of two theoretical perspectives and its adoption of a quantitative approach, allowing for the analysis of municipal development at two levels, local and microregional.

Is too small always bad? the role of place attachment in harnessing location advantages

Despite the economic significance of micro-enterprises, the empirical evidence on the contextual factors unlocking their growth potential is somewhat scant. This study pitches into this stream of research by linking micro-enterprises, agglomeration economies, and place attachment literature. Specifically, this research explores whether micro-enterprises benefit the most from the location in agglomerations and from having a local manager in charge of the business capturing the connections to the immediate surroundings. By drawing on secondary data from Italian manufacturing companies, our findings show that micro-enterprises are less productive than the larger ones and that having a local manager further exacerbates the productivity gap. However, the influence of place attachment on productivity reverts to positive when micro-enterprises dwell in agglomerated areas, where they are better positioned to capitalize on localization economies. Our study unveils the ambivalent effect of place attachment on productivity, allowing micro-enterprises mainly to achieve higher productivity gains from agglomerations. Theoretical contributions to contextualizing entrepreneurship research and micro-enterprises growth as well as policy and managerial implications are discussed.

Does rail transit access affect firm dynamics? Analysis of firm births and closures in Maryland, USA

Firm birth and firm closure are two interrelated dynamics relevant to measuring economic growth, yet most studies focus on firm birth only. Public transportation infrastructure may facilitate firm birth, but it may also avert firm closure through improved accessibility that can consequently lead to increased local density hence agglomeration economies. This study analyzes firm births and firm closures using the National Establishment Time Series (NETS) panel data from Maryland from 1991 to 2009. By examining both birth and closure patterns, this study estimates the likelihood of firm retention for areas in proximity to passenger rail stations of multiple levels of maturity, while controlling for a number of potentially confounding factors. Positive and statistically significant relationships are found between proximity to the passenger rail stations and the rates of firm births in Maryland, regardless of differences in the level of maturity of stations. From 1991 to 2009, areas within close proximity to passenger rail stations in Maryland experienced a wide range of rates of growth in firm density, depending on the year of station opening. The results suggest that well after the introduction of rail stations, areas near passenger rail stations gain belated economic benefits shown by higher likelihood of firm retention around the mature rail stations opened before 1990. In comparison, areas near the less mature stations that opened after 1990 had predominantly lower likelihood of firm retention. Planners and policymakers should be proactive in directing development near rail stations by adopting a variety of measures and policies that support or are at least consistent with transit-oriented development (TOD).

Spatial agglomeration of information services industry and its evolution: Evidence from the Pearl River Delta, China

AbstractThe information services (IS) industry, which facilitates industrial transformation and upgrading, has emerged as a key driving force behind China's economic growth in recent years. More evidence can be accumulated from the Pearl River Delta (PRD), one of the largest transforming economies and IS gathering region in China. Firstly, this paper investigates the spatial patterns and dynamics of IS agglomeration in the PRD from 2003 to 2018, using the spatial autocorrelation analysis and Kernel density analysis. Secondly, a dynamic panel model with a system generalized method of moments (SYS‐GMM) estimation is employed to identify the factors significantly influencing the industry agglomeration economy. Results show that: (1) Large firms continue to gather in the core area of major cities, while smaller firms show a more balanced distribution from the core to periphery regions. The spatial proximity of firms proves that micro firms benefit less from industrial agglomeration compared to larger ones. (2) The effects of agglomeration externalities on economic growth remains positive, with labor force and commuting costs playing a vital role in the expansion of the IS industry. By integrating geo‐spatial information and empirical evidence, this study contributes to China's understanding and experience as a late‐developing country in the digital economy era. Finally, policies supporting small and medium enterprises (SMEs), improving the effectiveness of government subsidies, and strengthening industry‐university research cooperation are proposed.

Can digital economy improve employment structure?-Mediating effect based on a spatial Durbin model.

Based on the panel data of 283 prefecture-level cities in China from 2011 to 2019, this study constructed an index measurement system of digital economy, economic agglomeration, innovation and entrepreneurship, and employment structure. The index of digital economy was developed by entropy weight method, and the double-fixed spatial Durbin model was constructed based on the intermediary effect from the spatial perspective to determine the direct effect, indirect effect, and total effect of the digital economy, economic agglomeration degree, and innovation and entrepreneurship on employment structure. The results indicated a significant spatial correlation between the three aspects, i.e., digital economy can significantly optimize the employment structure, with an evident spillover effect. The mechanism analysis revealed that the level of innovation and entrepreneurship poses a stronger intermediary effect than the degree of economic agglomeration, and the digital economy in the eastern region directly impacts the urban employment structure; however, the influence of digital economy on the employment structure is significantly higher in small- and medium-sized cities than in large-sized cities.

Does green location-oriented policy enhance ecological resources and reduce air pollution? Empirical analysis from counties in China

Green location-oriented policy plays a vital role in improving the ecological security. Using the multi-phase difference-in-difference (DID) method, this study evaluates the impact of national key ecological functional areas (NKEFA) on ecological resources and environmental pollution. There are several important findings. Firstly, NKEFA effectively enhances ecological resources and reduces air pollution, the policy effect only manifests after two years of implementation. Secondly, NKEFA has indirectly improved air quality by promoting technological innovation, advanced industrial structure, and regional ecological resource quality. Moreover, the relationship between NKEFA and ecological resources is negatively regulated by industrialization and economic agglomeration, while the relationship between NKEFA and air pollution is positively regulated by them. Thirdly, NKEFA has the strongest impact on enhancing ecological resources in the eastern region, and it is more effective in reducing air pollution in the central and eastern regions compared to the western regions. Furthermore, the NKEFA demonstrates the greatest effectiveness in promoting ecological resources and reducing air pollution in water and soil conservation areas. However, there is a spatial spillover effect, which suggests that this policy has some negative impacts on the surrounding counties’ ecological environment.

Spatial location and agglomeration economies in exports: empirical evidence by technological intensities in Brazil

ABSTRACT This study investigates spatial autocorrelation and the formation of spatial export clusters of Brazilian mesoregions based on technological intensity. It also analyzes how regional knowledge and agglomeration economies explain regional exports, using spatial econometric techniques. Brazilian exports exhibit a stronger spatial autocorrelation. Non-manufacturing sectors, which are less technology-intensive, exhibit lower spatial dependence than manufacturing sectors. The results also show an autocorrelation between exports and R&D expenditure, identifying the formation of clusters in the southeastern and southern regions. R&D expenditure fosters the growth of regional exports and the spatial lag effects of exports and R&D expenditure are significant in the high technology-intensive manufacturing sector.

Муниципальная политическая экономия

During the first two decades of the XXI century economic life and economic theory were established according to the models that were suggested by liberal economists who were convinced of the correctness of globalist ideology. Crisis 2008–2013 development denied the value of these models. Crisis, sanctions against Russia, neocolonial structure of the world economy degradation induce to search new socio-economic equilibrium points and to return to rejected economic theories, to political economy in particular. The article is written on the basis of the experience of teaching the discipline “Economics of public sector”. The aim of the work is to show that economic practice, especially at the regional level, has ceased to correspond to what is offered by the modern economic science set out in textbooks. It is contemplated that methodological area of “political econo-my”, which comprises broad social context, political aspect in the exclusively economic agenda, will draw near-er to practice the conclusions and generalizations of economists. Municipal economy, from the point of view of political economy, is included directly through agglomeration economies into national economy development, changing it from the inside.