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Rushing to opportunity: City growth and entrepreneurship

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  • Behrens, Kristian
  • Seegert, Nathan

Abstract

The growth of many cities and industries differs, with some growing slowly and others experiencing rapid change—i.e., rushes. To explain these differences and explore the mechanisms of growth, we develop a model centered on a new trade-off between time-varying fundamentals and time-invariant – but rank-dependent – opportunities. Early population flows depend on the opportunities new entities provide, whether from available land in cities or the accumulation of entrepreneurship human capital in firms. Our model can explain the existence of rushes and their size. We provide suggestive empirical evidence on city- and industry growth consistent with the model’s predictions.

Suggested Citation

  • Behrens, Kristian & Seegert, Nathan, 2025. "Rushing to opportunity: City growth and entrepreneurship," Journal of Urban Economics, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:juecon:v:149:y:2025:i:c:s0094119025000488
    DOI: 10.1016/j.jue.2025.103783
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    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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