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Determinants of city growth in Brazil

  • da Mata, D.
  • Deichmann, U.
  • Henderson, J.V.
  • Lall, S.V.
  • Wang, H.G.

In this paper, we examine the determinants of Brazilian city growth between 1970 and 2000. We consider a model of a city, which combines aspects of standard urban economics and the new economic geography literatures. For the empirical analysis, we constructed a dataset of 123 Brazilian agglomerations, and estimate aspects of the demand and supply side as well as a reduced form specification that describes city sizes and their growth. Our main findings are that increases in rural population supply, improvements in inter-regional transport connectivity and education attainment of the labor force have strong impacts on city growth. We also find that local crime and violence, measured by homicide rates impinge on growth. In contrast, a higher share of private sector industrial capital in the local economy stimulates growth. Using the residuals from the growth estimation, we also find that cities who better administer local land use and zoning laws have higher growth. Finally, our policy simulations show that diverting transport investments from large cities towards secondary cities do not provide significant gains in terms of national urban performance.

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Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 62 (2007)
Issue (Month): 2 (September)
Pages: 252-272

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Handle: RePEc:eee:juecon:v:62:y:2007:i:2:p:252-272
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622905

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  1. Da Mata, Daniel & Deichmann, Uwe & Henderson, J. Vernon & Lall, Somik V. & Wang, Hyoung Gun, 2005. "Examining the growth patterns of Brazilian cities," Policy Research Working Paper Series 3724, The World Bank.
  2. Persson, Torsten & Tabellini, Guido, 1994. "Is Inequality Harmful for Growth?," American Economic Review, American Economic Association, vol. 84(3), pages 600-621, June.
  3. Rafael La Porta & Florencio López-de-Silanes, 1999. "The Benefits of Privatization: Evidence from Mexico," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1193-1242.
  4. David N. Weil, 2005. "Accounting for the Effect of Health on Economic Growth," NBER Working Papers 11455, National Bureau of Economic Research, Inc.
  5. Sanders Korenman & David Neumark, 1997. "Cohort Crowding and Youth Labor Markets: A Cross-National Analysis," NBER Working Papers 6031, National Bureau of Economic Research, Inc.
  6. Duncan Black & Vernon Henderson, 1999. "A Theory of Urban Growth," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 252-284, April.
  7. repec:hoo:wpaper:e-95-4 is not listed on IDEAS
  8. Chun-Chung Au & Vernon Henderson, 2002. "How Migration Restrictions Limit Agglomeration and Productivity in China," NBER Working Papers 8707, National Bureau of Economic Research, Inc.
  9. Mauro Borges Lemos & Sueli Moro & Elenice Biazi & Marco Aurélio Crocco, 2001. "A Dinâmica Urbana das Regiões Metropolitanas Brasileiras," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 073, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  10. Thierry Mayer & Keith Head, 2003. "The Empirics of Agglomeration and Trade," Working Papers 2003-15, CEPII research center.
  11. Rappaport, Jordan, 2004. "Why are population flows so persistent?," Journal of Urban Economics, Elsevier, vol. 56(3), pages 554-580, November.
  12. Beeson, Patricia E. & DeJong, David N. & Troesken, Werner, 2001. "Population growth in U.S. counties, 1840-1990," Regional Science and Urban Economics, Elsevier, vol. 31(6), pages 669-699, November.
  13. Duranton, Gilles & Puga, Diego, 2003. "Microfoundations of Urban Agglomeration Economies," CEPR Discussion Papers 4062, C.E.P.R. Discussion Papers.
  14. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
  15. Oded Galor & Joseph Zeira, 2013. "Income Distribution and Macroeconomics," Working Papers 2013-12, Brown University, Department of Economics.
  16. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
  17. Chun-Chung Au & J. Vernon Henderson, 2006. "Are Chinese Cities Too Small?," Review of Economic Studies, Oxford University Press, vol. 73(3), pages 549-576.
  18. repec:spo:wpecon:info:hdl:2441/10191 is not listed on IDEAS
  19. Alberto Alesina & Dani Rodrik, 1994. "Distributive Politics and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 465-490.
  20. Thomas J. Holmes, 2005. "The Location of Sales Offices and the Attraction of Cities," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 551-581, June.
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