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Urban externalities and city growth in Taiwan

Author

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  • Hsin-Ping Chen

    (Deartment of Economics, National Chengchi University, Taipei, Taiwan)

Abstract

The purpose of this paper is to investigate the influences of citywide and city-industry externalities on city growth. The effects of various externalities on city and industry growth for two different time periods in Taiwan are studied. The results indicate that employment growth at the city-industry level is: (1) negatively related to the initial city-industry employment; (2) positively related to the level of competition in the initial year; and (3) positively related to the degree of diversity in the initial year. The extent of the impact of the diversity externality is relatively large compared with the other effects. In addition, wage growth at the city-industry level is found to be: (1) negatively related to the initial city-industry wage rate; and (2) positively related to the degree of diversity in the initial year. Overall, we find that specialization hurts, competition helps, and city diversity helps both employment growth and wage growth. Our results favor Jacobs's theory, which would suggest that cross-industry externalities and local competition are more important for industry growth than are intra-industry spillovers.

Suggested Citation

  • Hsin-Ping Chen, 2002. "Urban externalities and city growth in Taiwan," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 36(4), pages 531-550.
    • Handle: RePEc:spr:anresc:v:36:y:2002:i:4:p:531-550
    Note: Received: February 2001/Accepted: April 2001
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    Citations

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    Cited by:

    1. David Mayer-Foulkes, 2011. "Urbanization as a Fundamental Cause of Development," Working Papers DTE 501, CIDE, División de Economía.
    2. Taiji Harashima, 2004. "A New Asymptotically Non-Scale Endogenous Growth Model," Development and Comp Systems 0412009, University Library of Munich, Germany, revised 01 Mar 2005.

    More about this item

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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