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Big or small cities? On city size and economic growth.

Frick, Susanne A. and Rodríguez-Pose, Andrés (2018) Big or small cities? On city size and economic growth. Growth and Change. ISSN 1468-2257

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Identification Number: 10.1111/grow.12232

Abstract

Policy-makers and academics frequently emphasize a positive link between city size and economic growth. The empirical literature on the relationship, however, is scarce and uses rough indicators for the size for a country’s cities, while ignoring factors that are increasingly considered to shape the relationship. In this paper, we employ a panel of 113 countries between 1980 and 2010 to explore whether (1) there are certain city sizes that are growth enhancing and (2) how additional factors highlighted in the literature impact the city size/growth relationship. The results suggest a non-linear relationship which is dependent on the country’s size. In contrast to the prevailing view that large cities are growth-inducing, for the majority of countries relatively small cities of up to 3 million inhabitants are more conducive to economic growth. A large share of the urban population in cities with more than 10 million inhabitants is only growth promoting in countries with an urban population of 28.5 million and more. In addition, the relationship is highly context dependent: a high share of industries that benefit from agglomeration economies, a well-developed urban infrastructure, and an adequate level of governance effectiveness allow countries to take advantage of agglomeration benefits from larger cities.

Item Type: Article
Official URL: http://onlinelibrary.wiley.com/journal/10.1111/(IS...
Additional Information: © 2017 John Wiley & Sons
Subjects: G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HD Industries. Land use. Labor > HD100 Land Use
Sets: Departments > Geography and Environment
Date Deposited: 26 Sep 2017 11:29
Last Modified: 12 Apr 2018 13:47
URI: http://eprints.lse.ac.uk/id/eprint/84296

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