Reliable information about the coronavirus covid19 is available from the world health organization current situation, international travel. The second is labor market pooling, where agglomeration allows a better match between an employers needs and a workers skills and. Microfoundations of urban agglomeration economies researchgate. While the neg examines one set of possible agglomeration economies, a variety of other microfoundations for these metropolitan increasing returns have been proposed. Oclcs webjunction has pulled together information and resources to assist library staff as they consider how to handle. First, it is only by studying what gives rise to urban agglomeration economies rather than merely stating. Microfoundations of urban agglomeration economies ideasrepec. The marshallian microfoundations of agglomeration economies microfoundation paper key results natural advantage input sharing labor market pooling knowledge spillovers. Microfoundations of urban agglomeration economies core. Various papers explore the role of technological externalities in promoting agglomeration. Microfoundations of urban agglomeration economies giles duranton, diego puga nber working paper no. Efcient city size nj decreases with commuting costs as measured by t and increases with the extent of aggregate increasing returns as measured byej. Recently, the literature has also begun to provide evidence on the microfoundations of external economies of scale.
For instance, industry pairs both characterised by the presence of smaller firms show stronger effect s from input linkages a resul t in the spirit of chinitz 1961. For each of these three categories, we develop one or more core models in detail and discuss the. We regard this as one of the fundamental quests in urban economics for three main reasons. This is usually done within the urban economics paradigm of understanding the interactions between localization economies, city size and urban productivity abdelrahman 2000. Urban agglomeration and ceo compensation volume 51 issue 6 bill b. While estimation results generally confirm that labor. In this approach, a tendency for pairs linked in the supply chain to coagglomerate is consistent with input sharing, while coagglomeration of industry pairs linked in. Microfoundations of urban agglomeration economies nber. The second broad question concerns the sources of agglomeration economies. Microfoundations of urban agglomeration economies econpapers. We distinguish three types of microfoundations, based on shar.
The logic of agglomeration harvard business school. For instance, the composition of cities typically emerges as a consequence of the scope of different sources of agglomeration economies and their interaction with other aspects of. Efficient city size n j decreases with commuting costs as measured by. Estimating the agglomeration benefits of transport. The present paper further explores the heterogeneity in. Microfoundations of urban agglomeration economies by gilles. We distinguish three types of microfoundations, based on sharing, matching, and learning mechanisms. For instance, the composition of cities typically emerges as a consequence of the scope of different sources of agglomeration economies and their interaction with other. Request pdf evidence for localization and urbanization economies in urban scaling we study the scaling of i numbers of workers and aggregate incomes. It has been demonstrated that agglomeration economies can arise from labor market pooling helsley and strange 11, input sharingz. Chapter 49 in handbook of regional and urban economics, 2004, vol. Such causality is justified by the theory of agglomeration, but is difficult to establish empirically because estimates may be subject to sources of bias from endogeneity and confounding. Microfoundations of urban agglomeration economies by. The adb economics working paper series is a forum for stimulating discussion and eliciting.
By studying the microfoundations of urban agglomeration economies we are looking inside the black box that justi. This paper studies the theoretical microfoundations of urban agglomeration economies. Urban agglomerations in developing countries like china, although have the same characteristics as the developed countries because of globalization, often show a more different and dynamic process. Urban agglomerations in china are generally dominated and planned as a mode of organizing. No 9931, nber working papers from national bureau of economic research, inc abstract. The microfoundations of urban agglomeration economies. A core topic in economic geography is agglomeration economies, where cities and clusters of activity. Indeed, as stressed byrosenthal and strange2004, \explicit theories of the microfoundations of agglomeration economies have nearly always.
Cep discussion paper no 1619 may 2019 tales of the city. Numerous and frequentlyupdated resource results are available from this search. Urban agglomeration plays an essential role in world urbanization. This handbook chapter studies the theoretical microfoundations of urban agglomeration economies. Scale economies are a key feature in the urban literature, starting with marshalls 1890 frequently cited passages on how cities provide an environment of close contacts and neighborhoods generating localized information spillovers. There has been a recent resurgence of interest among urban economists and regional scientists in empirical analysis of the microfoundations of urban agglomeration economies see, e. Chapter 48 microfoundations of urban agglomeration economies. Evidence on the nature and sources of agglomeration economies. The main finding is that the development effects of urbanisation and the magnitude of agglomeration economies are very variable. Handbook of regional and urban economics cities and. Urbanization economies occur when expansion of an urban area.
The best known of these sources are those attributed to marshall 1920. Zgoldstein and gronberg 10, and knowledge spillovers glaeser 7. Final version evidence on the nature and sources of aggl. Volume 4, cities and geography, elsevier north holland, amsterdam, pages 2063 2117. Firms within an industry form clusters in those locations that can realize scale economies in the provision of. Recent work has developed microfoundations for scale economies such as information. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. Microfoundations of urban agglomeration economies, by gilles duranton and diego puga, 2004. Localization economies involve benefits to firms from expansion of their own industry, resulting in industry clusters. The case for including agglomeration benefits within transport appraisal rests on an assumed causality between access to economic mass and productivity.
This paper considers the empirical literature on the nature and sources of urban increasing returns, also known as agglomeration economies. In each case, the literature suggests that agglomeration economies attenuate with distance. For instance, the composition of cities typically emerges as a consequence of the scope of different sources of agglomeration economies and their interaction. While the agglomeration literature has much to say about how agglomeration economies are generated, it has less to say about heterogeneity in microfoundations. International trade and investment this handbook chapter studies the theoretical microfoundations of urban agglomeration economies.
Quigley 21 for a survey of the extensive theoretical literature on the microfoundations of agglomeration. According to urban economic theory, firms derive productive advantages from locating in close proximity and the existence of such benefits can explain the formation and growth of cities and dense industrial areas. Specialization is at the core of the emergence of agglomeration economies. The microfoundations of urban agglomeration economies interact with other building blocks of urban models in ways that we cannot recognise unless they are explicitly stated. Its e ects has been mainly linked to the scale of activity of an industry in a certain region. Urban agglomeration and ceo compensation journal of. Agglomeration economies are positive externalities that arise through the spatial concentration of economic activity. Microfoundations of urban agglomeration economies book.
Recent research in economic geography has been able to. Dicussion of duranton and puga dp, 2004 nathan schiff shanghai university of finance and economics graduate urban economics, lecture 3 march 7, 2016 3. The magnitude and causes of agglomeration economies federal. Evidence for localization and urbanization economies in. Spatial production and governance of urban agglomeration. Extending a differentiated product model that provides the microfoundations of urban agglomeration economies to include all three.
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