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Does decentralization of governance promote urban diversity? Evidence from Spain

Author

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  • Jorge Díaz-Lanchas
  • Peter Mulder

Abstract

The worldwide trend to decentralize the responsibilities and budgets of governments impacts regional economies in various ways. We use the example of Spain to test empirically whether the decentralization of governance is an important determinant of the sectoral composition of cities in an urban system. Our regression results, exploiting unique firm-level and time-varying transport-cost data, support the hypothesis that governance decentralization and the establishment of regional government headquarters in specific cities have been conducive to a more diverse urban economic structure and a more even city-size distribution in the Spanish urban system during a period of continuous reductions in transport costs.

Suggested Citation

  • Jorge Díaz-Lanchas & Peter Mulder, 2021. "Does decentralization of governance promote urban diversity? Evidence from Spain," Regional Studies, Taylor & Francis Journals, vol. 55(6), pages 1111-1128, June.
    • Handle: RePEc:taf:regstd:v:55:y:2021:i:6:p:1111-1128
    DOI: 10.1080/00343404.2020.1863940
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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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