Agglomeration Economies Research Articles

Can the resource and environmental dilemma due to water-energy-carbon constraints be solved in the process of new urbanization?

The rapid development of basin resource-based cities (BRCs) in developing countries have led to severe resource and environmental problems centered on the “water-energy-carbon” (WEC) nexus. Based on their spatiotemporal evolution, WEC constraints are evaluated via a multidimensional coupling coordination degree (CCD) mode. Resource-environmental efficiency (REE) under these constraints is measured via the superefficiency SBM model. The path of resource and environmental improvement via new urbanization (NU) is discussed based on the spatial econometric model. Water resource consumption in the BRCs decreased by 12.22 %, but energy consumption and carbon emissions increased by 20.1 % and 70.05 %, respectively, and the CCD of the WEC nexus showed a “highly coordinated - seriously imbalanced” change. Therefore, the REE increase of 44.03 % was unsustainable. NU improved REE and reduced water resource consumption but did not reduce energy consumption or carbon emission, and there is significant regional variability. Scientific and technological innovation, economic agglomeration and land structure diversity contributed to the resource-environmental improvement effects of NU, but optimized industrial structures and environmental governance had masking effects. The policy implication is that during NU, efficiency gains must be combined with policies to promote industrial structure optimization and environmental governance and thus achieve sustainable urban development.

Informal settlements in Colombia: A look at the city of Tunja (2010-2022)

This paper presents a comprehensive analysis of informal settlements in Tunja, Colombia, from 2010 to 2022. It examines the historical, social, and economic factors that contribute to these settlements, using various data sources, including development and territorial planning plans, the Agustín Codazzi Geographic Institute, and local government records. The study highlights significant inequalities in access to public services between urban and rural areas, exacerbated by environmental hazards from nearby mines, landfills, and sewage treatment plants. The research employs a descriptive and explanatory approach, detailing the historical context and theoretical frameworks related to agglomeration economics, territorial inequality, and urbanization processes. A historical-deductive method ensures logical consistency in the analysis of data from 2010 to 2022. The study also utilizes georeferencing techniques to present spatial data on service coverage and demographic characteristics, differentiating urban and rural disparities. Findings show that informal settlements in Tunja are predominantly located on the periphery of the city, with significant disparities in service coverage. While urban areas have over 90% coverage of basic services, rural areas lack adequate infrastructure, particularly sewage, gas, and internet services. The study identifies specific settlements, such as Runta and Pirgua, details their access to services and highlights environmental and structural issues.

Agglomeration and the Italian North–South divide

Abstract This article offers new evidence on agglomeration economies by examining the link between total factor productivity (TFP) and employment density in Italy. We investigate whether and how the TFP–density nexus contributes to explaining a relevant share of the marked productivity gap between the northern and the southern Italian regions. We estimate TFP for a large sample of manufacturing firms and then aggregate it at the level of local labour market areas. We tackle the endogeneity issues stemming from the presence of omitted covariates and reverse causation with an innovative set of diagnostic tests and an instrumental variable approach that relies on geological and historical data. Our estimate of the TFP elasticity to the spatial concentration of economic activities is about 0.045, a magnitude comparable to those measured for other developed countries. We also show that no significant heterogeneity emerges in the intensity of agglomeration economies across the country and that the positive TFP difference in favour of the firms located in the North is not due to the tougher competition taking place in those areas.

Towards more resilient cities-analyzing the impact of new-type urbanization on urban resilience: Considering spatial spillover boundaries

This paper examines the New-type Urbanization pilot policy (NTUP) and its influence on urban resilience, offering insights into how NTUP fosters a human-centric, sustainably coordinated, and inclusive model of urban development distinct from traditional approaches. This model plays a key role in enhancing urban capacities to confront economic, social, and environmental challenges, aiding in building more resilient cities. Notably, existing literature scarcely explores the relationship between NTUP and urban resilience, marking a significant gap this research aims to fill. Utilizing a multi-period DID model to examine panel data across 281 Chinese cities from 2006 to 2020, this study delves into NTUP's direct effects on urban resilience, its mechanisms, and spatial spillover boundaries. Findings reveal that: (1) NTUP enhances urban resilience, confirmed by a series of robustness tests. (2) NTUP significantly improves economic, infrastructure, and institutional resilience, while its influence on social resilience is minimal, and it detrimentally impacts ecological resilience. (3) Urban technology innovation and economic agglomeration are the primary mechanisms through which NTUP promotes urban resilience. (4) NTUP has a positive spatial spillover effect on the resilience of neighboring cities up to 350 km, with this effect shifting from a "radiation effect" to a "siphoning effect" as geographical distance increases.

Overcoming the MAUP: impact of agglomeration economies on regional performance in Germany

ABSTRACT This study analyses the impact of agglomeration economies on employment growth at the individual firm and regional levels. The analysis is based on a sample of German firms, comprising a total of 134,081. We put forward a Modifiable Areal Unit Problem-free (MAUP-free) approach for the calculation of individual firm-specific agglomeration and local growth measures based on kernel density estimates. This enables us to examine the impact of agglomeration on firm and local growth within a continuous space framework. The econometric analysis demonstrates that the effects of agglomeration economies on firm and local growth are significantly disparate.

Can low-carbon transportation construction improve urban green total factor productivity? A quasi-natural experiment based on 282 prefecture-level cities in China.

Total factor productivity in the green economy is a major step forward in fostering robust growth in the economy. Urban green total factor productivity (GTFP) may be increased and carbon emissions decreased through the low-carbon transformation of the transportation sector. To analyze how the pilot policy of low-carbon transportation system construction affects urban GTFP, this study builds a DID model and a spatial Durbin model using panel data from 282 Chinese cities between 2006 and 2021. The findings show that low-carbon transportation systems boost urban GTFP. In addition, the mechanism test shows that low-carbon transportation development increases urban GTFP by optimizing urban industrial structure, expediting economic agglomeration, and encouraging technological innovation. Lastly, the geographical correlation test shows that GTFP is geographically associated and that spatial spillover reduces the impact of low-carbon transportation growth on GTFP. The findings affirm the need to vigorously promote low-carbon transportation systems to aid in the achievement of the carbon neutrality target.

Land allocation and industrial agglomeration: Evidence from the 2007 reform in China

This paper highlights the crucial role of land allocation mechanisms in fostering industrial agglomeration by examining China's 2007 industrial land market reform. By introducing transparency into the land-selling process, the reform facilitated more buyers to compete for land (as evidenced by increased land sale prices), enabling local governments to allocate land to the most suitable users. Utilizing comprehensive data sets that include information on initial local industrial structure, new industrial establishments, and industrial land transactions, the empirical analysis finds that the reform significantly increased the entry of firms from industries aligned with local specialization, particularly in regions that implemented the reform more strictly. Industries characterized by substantial unrealized agglomeration economies or highly localized spillover effects experienced amplified effects. A well-functioning capital market further enhanced the land market reform's impact. Supporting evidence demonstrates the reform's positive effect on economic growth (as evidenced by changes in nighttime luminosity), potentially through increasing local firms' TFP.

How Does Digital Inclusive Finance Policy Affect the Carbon Emission Intensity of Industrial Land in the Yangtze River Economic Belt of China? Evidence from Intermediary and Threshold Effects

Digital inclusive finance (DIF) is a strategic tool that fosters the green transformation of the industrial economy. Based on the data from the 11 provinces and municipalities in the Yangtze River Economic Belt of China between 2012 and 2021, This paper utilizes the Tobit, intermediary effect, and threshold effect models to empirically study the impact of DIF on the industrial land carbon emission intensity (ILCEI). This paper reaches the following conclusions: (1) The ILCEI in the region revealed a downward trend during the study period. There are substantial differences in carbon ILCEI; higher upstream and lower downstream. The average ILCEI in the lower reach provinces is 0.5829 ton/m2 during the research period, while that in the upper reach region is 1.0104 ton/m2. (2) DIF has a significantly inhibitory effect on the ILCEI; this effect has nonlinear characteristics. The impact of DIF on ILCEI exhibits a marginally diminishing trend as the industrial land economic agglomeration degree improves. (3) Regarding the transmission mechanism, the level of industrial R&D investment plays a primary intermediary role in the impact of DIF on ILCEI. (4) Concerning control variables, foreign investment dependence and trade contribute significantly to inhibiting ILCEI. Lastly, this paper proposes a series of measures to promote DIF to fully utilize the emission reduction effect. The research outcomes have substantial implications for the sustainable development of industrial land.

Modeling the United Oscillation and Wave of economic policy and urban planning employing spatial population dynamics.

Modern urban dynamics are increasingly shaped by the interplay between economic policy and urban planning, yet often lack an integrated approach. This study bridges this gap by examining the dynamic equilibrium between these two realms using the "Oscillation and Wave Framework." Specifically, we focus on the impact of variations in congestion parameter λ on urban sectoral spatial distribution and population dynamics. Our approach utilizes an advanced agent-based model to simulate interactions within an urban economic landscape, offering a detailed analysis of the relationship between agglomeration economies and congestion diseconomies. The results highlight the significant influence of congestion parameter adjustments on urban patterns, particularly in terms of cluster density and development. Therefore, this study not only provides a deeper understanding of the intricate balance between economic and urban planning factors but also emphasizes the necessity of incorporating these insights into urban planning and policy formulation for sustainable urban development. The findings also have important practical implications for addressing the dynamic complexities of urban environments, especially the interactions between different industries and their role in shaping urban structures.

Explaining the emergence of land-use frontiers.

Land-use expansion is linked to major sustainability concerns including climate change, food security and biodiversity loss. This expansion is largely concentrated in so-called 'frontiers', defined here as places experiencing marked transformations owing to rapid resource exploitation. Understanding the mechanisms shaping these frontiers is crucial for sustainability. Previous work focused mainly on explaining how active frontiers advance, in particular, into tropical forests. Comparatively, our understanding of how frontiers emerge in territories considered marginal in terms of agricultural productivity and global market integration remains weak. We synthesize conceptual tools explaining resource and land-use frontiers, including theories of land rent and agglomeration economies, of frontiers as successive waves, spaces of territorialization, friction and opportunities, anticipation and expectation. We then propose a new theory of frontier emergence, which identifies exogenous pushes, legacies of past waves and actors' anticipations as key mechanisms by which frontiers emerge. Processes of differential rent creation and capture and the built-up of agglomeration economies then constitute key mechanisms sustaining active frontiers. Finally, we discuss five implications for the governance of frontiers for sustainability. Our theory focuses on agriculture and deforestation frontiers in the tropics but can be inspirational for other frontier processes including for extractive resources, such as minerals.

Regional Economic Agglomeration and Trans-Sumatra Toll Road Development: A Network and Spatial Review

Road and transportation networks play a crucial role in interregional connections. One of the key development programs initiated during President Jokowi’s presidency in Indonesia is aimed at improving interregional connectivity. In Sumatra, the National Strategic Project (Program Strategis Nasional/PSN) for the construction of the Trans-Sumatra Toll Road has been underway since 2014. After a decade of development, it is essential to evaluate the impact of this infrastructure on the region's agglomeration to inform future development policies. This paper reviews the changes in network structures and economic activities as influenced by the construction of the Trans-Sumatra Toll Roads. It also seeks to predict the future development of agglomeration and economic activities. The study employs regional and city planning methodologies, including space syntax, fractal dimension analysis, and cluster analysis. The findings indicate that the construction of the Trans-Sumatra Toll Road has significantly enhanced connectivity and accessibility, increased the gravitational value of the territory, and reduced the load on existing roads. Moreover, the development of toll roads has led to the growth of new economic centers, which eventually resulted in the formation of four major agglomeration regions.

Factors behind the resilience of rural startups

Rural areas are characterized by sparse population, low population density, remoteness, and population aging, which can discourage startups and undermine their financial performance, as the theory of urban agglomeration economies suggests. However, many studies have shown that companies created in rural areas survive longer than those created in urban areas, which seems contradictory. This paper aims to identify the factors that explain this rural resilience. We analyzed all of the startups founded in Spain over 10 years. We used statistical matching methods to test for the effect of the location while controlling for founding conditions and environmental factors. Our study confirmed that few startups are created in rural areas and they grow less, but their survival rate is slightly higher than those established in urban areas. We found that high subsidies, low operating costs, high labor intensity, a slow but low-risk growth pattern, and other foundational conditions and external factors contribute to explaining rural resilience. Nonetheless, additional factors, including the traits of rural entrepreneurs and the lack of alternatives to bankruptcy, as proposed by the entrepreneurial opportunity theory, also matter.

Agglomeration and the success of arts majors working in entrepreneurship and innovation

ABSTRACT In this study we look to understand whether living or working in a ‘hub’ increases the likelihood that college graduates with degrees in the arts are working in entrepreneurial occupations or innovative industries, and whether it increases their success in such occupations/industries. While the share of arts graduates working in the arts is low, recent empirical evidence suggests that large shares of arts graduates are working in occupations/industries that can be classified as entrepreneurial or innovative, potentially because of their creative education/training. However, little is known about where such works takes place, so we explore whether proximity to other creatives and/or entrepreneurial/innovative workers has an influence. The theory underpinning our work is the economics of agglomeration, as ample research on artists suggests that creatives benefit from proximity to other creatives. The popularity of Silicon Valley as a home for start-ups and tech firms suggests agglomeration is important in entrepreneurship and innovation as well. Using American Community Survey data, we find that living or working in a ‘hub’ has positive impacts on the likelihood arts graduates are working in occupations/industries that are entrepreneurial/innovative and on earnings in such areas, suggesting that agglomeration may have positive impacts on productivity.

Agglomeration Economies and Rural-to-Urban Migration in India

<p style="text-align:justify"><span style="font-family:Times New Roman,Times,serif"><span style="font-size:16px"><span dir="ltr" lang="EN-US"><span style="color:black">Keeping in view the concept of agglomeration economies and the New Economic Geography (NEG) angle, this paper makes an attempt to examine the rural to urban population movement at the district level in India. The findings do not favour a strong positive association between levels of urbanization and migration rates.  However, there exists a cluster of districts which are able to attract migrants on a large scale in spite of being already urbanized. The work participation rate, share of services and construction work, and literacy rate all form parts of this positive nexus, indicating that opportunities exist with increased levels of urbanization which in turn prompt people to migrate. The positive spill-over effects of higher levels of urbanization are not limited to the urban spaces only as the adjoining rural areas also seem to have undergone   a significant transformation. The land use pattern and activities are changing and some of the developmental impact is evident. However, the regional variations in this respect are evident. There are sharp differences in the relationship between urbanization level and migration rates across regions. The nature of urbanization and its determinants and the outcome variables of urbanization and migration also unravel regional variations. Besides, there are many districts with higher levels of urbanization; yet, they are not able to attract migrants at a rapid pace. New investment opportunities can be created in these spaces to reduce the cost of growth and make employment generation process more effective, facilitating the rural population to take the benefits of agglomeration economies.</span></span></span></span></p>

Is there an agglomeration economy in Eastern Russia?

ABSTRACT This analysis has disproved the widespread opinion that, in Eastern Russia, where the settlement structure and transport network are less dense, agglomeration effects are either absent or negligible. Econometric estimates have revealed a significant contribution of agglomeration economies to the efficiency of companies mainly in the southern regions. However, for a substantial part of Eastern Russia, agglomeration effects are insignificant and for some territories they are negative. The manifestation of agglomeration effects depends neither on the density of economic activity nor on the development of communication infrastructure. Lack of cooperation between local producers hinders the realisation of existing agglomeration potential in Eastern Russia.

Place-based policies, agglomeration economics, and environmental impacts: evidence from China’s Xinjiang targeted pairing aid program

Concerns about opportunistic behaviors by governments and their failure to recognize local needs are significant issues with place-based policies. In China’s aid program targeted at Xinjiang, rather than solely relying on fiscal transfers and centralized decision-making, there was encouragement for the involvement of state-owned enterprises and direct cooperation between aid providers and recipients. While these arrangements have helped the program succeed in addressing concerns related to place-based policies and have contributed to economic growth in recipient areas, there are potential negative impacts on the local environment, leading to what is termed as a pollution heaven scenario. Analyzing of data from 72 ethnic cities in China using a difference-in-differences approach, we demonstrate that the program resulted in notable increases in local GDP and PM2.5 concentrations, accompanied by expansion of polluting industries. This study is pertinent to ongoing discussions in place-based policy research and offers policy insights both domestically and internationally.

Identifying the Hierarchical Structure of Nighttime Economic Agglomerations Based on the Fusion of Multisource Data

Identifying the Hierarchical Structure of Nighttime Economic Agglomerations Based on the Fusion of Multisource Data

Agglomeration economies and firm’s export intensity: evidence from Portuguese manufacturing SMEs

Export performance is a highly debated topic in the literature, with no consensus on how to measure it or what factors determine it. Most studies divide these factors into internal and external determinants, with a focus on internal determinants. This study, however, focuses on external determinants, namely agglomeration economies such as localization and urbanization economies and export spillovers, and their impact on a firm’s export intensity. Based on a large sample of Portuguese manufacturing SMEs over the period 2010 to 2018 (191,920 firm/year observations), the estimation results through the two-stage least squares method with fixed effects strongly indicate the existence of a positive relationship between agglomeration economies, particularly localization economies and export spillovers, and export performance. These findings suggest that firms located in areas with a high concentration of other firms in the same industry and other exporting firms tend to have better export performance, which has important implications for policymakers.

The role of agglomeration in digitalisation and productivity: an empirical examination of manufacturing SMEs in South Korea

ABSTRACT This study examines the relationship between regional agglomeration and the digitalisation of manufacturing small and medium enterprises (SMEs), and how this interplay affects their productivity. Using two analytical models, we investigate the correlation of regional agglomeration factors such as industrial specialisation, related and unrelated variety, urbanisation economies and the spatial concentration of suppliers with SMEs' digitalisation level in South Korea. Our findings indicate that related variety within regional agglomerations positively influences digital innovation, facilitating knowledge spillovers particularly beneficial for SMEs with higher levels of digitalisation. The study reveals a differentiated impact of agglomeration economies on SMEs based on their digital maturity. While high-level digitalised enterprises benefit from related variety and urbanisation economies, those in the initial stages of digital adoption gain proximity to digital technology suppliers. The 2SLS models further demonstrate that digitalisation significantly enhances productivity across all levels of digital technology adoption among SMEs. This study emphasises the conditional nature of the effects of regional agglomeration on digitalisation and productivity, advocating for nuanced support strategies that cater to the varying digital maturity stages of SMEs, which are valuable for policymakers and business leaders in fostering a supportive regional ecosystem that propels SMEs towards greater productivity in the digital economy.

When friends are near foes: governing nonequity alliances with steering committees

PurposeIndirect knowledge leakage to rivals located near alliance partners represents a significant risk that has received limited scholarly attention. Hence, the question of how to manage this risk – which the authors term “partner-rival co-location risk” – in nonequity alliances remains unanswered, and this study aims to suggest establishing a steering committee to oversee the partnership.Design/methodology/approachDrawing on the agglomeration economies and alliance governance literatures, the authors develop a set of hypotheses and perform a series of empirical tests on 470 nonequity alliances in the US biopharmaceutical industry.FindingsThe authors propose that there is a positive linkage between partner-rival co-location risk and the formation of a steering committee in a nonequity alliance, which receives strong empirical support. Further, this relationship is significantly moderated by the breadth (alliance scope) but not the depth (reciprocal interdependence) of interaction between the partnering firms.Originality/valueThis paper is a pioneer to shed light on “partner-rival co-location risk” and how partner-rival co-location risk affects the governance decision of whether to establish a steering committee in a nonequity alliance, thus offering important theoretical and practical insights into competition and cooperation in alliance management.