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Urban Growth Drivers in a Europe of Sticky People and Implicit Boundaries

  • Paul Cheshire
  • Stefano Magrini

We investigate urban GDP pc growth across the EU12 using data for functionally definedcities - rather than administrative regions. We test hypotheses on the role of human capital,EU integration and fragmentation of urban government and explore spatial dependence andmechanisms of spatial interaction. Results are acceptable on standard econometric testswithout measures of spatial interaction but there is spatial dependence. If variables reflectingspatial adjustment are included, they are statistically significant and eliminate spatialdependence. Not only do the results now provide consistent estimates of parameters, theyalso support relevant theoretical insights and show national borders are still significantbarriers to economic adjustment. People in Europe are sticky so it is unreasonable to assumespatial disparities will disappear. Our findings also imply that cities in Europe form nationalrather than a single continental system.

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Paper provided by Spatial Economics Research Centre, LSE in its series SERC Discussion Papers with number 0010.

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Date of creation: Nov 2008
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Handle: RePEc:cep:sercdp:0010
Contact details of provider: Web page: http://www.spatialeconomics.ac.uk/SERC/publications/default.asp

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  1. Paul Cheshire & Stefano Magrini, 2005. "Population Growth in European Cities - Weather Matters, but only Nationally," ERSA conference papers ersa05p12, European Regional Science Association.
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  4. Barrios, Salvador & Bertinelli, Luisito & Heinen, Andreas, 2007. "Exploring The Link Between Local And Global Knowledge Spillovers," MPRA Paper 6239, University Library of Munich, Germany.
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  7. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
  8. Paul Cheshire & Christian A.L. Hilber, 2007. "Office space supply restrictions in Britain: the political economy of market revenge," LSE Research Online Documents on Economics 3203, London School of Economics and Political Science, LSE Library.
  9. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308 Elsevier.
  10. Freeman, Alan, 2005. "Towards a common standard: comparing European and American cities," MPRA Paper 18104, University Library of Munich, Germany.
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  12. Dora L. Costa & Matthew E. Kahn, 2000. "Power Couples: Changes In The Locational Choice Of The College Educated, 1940-1990," The Quarterly Journal of Economics, MIT Press, vol. 115(4), pages 1287-1315, November.
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  15. Paul Cheshire & Edward Malecki, 2003. "Growth, development, and innovation: A look backward and forward," Papers in Regional Science, Springer, vol. 83(1), pages 249-267, October.
  16. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-51, April.
  17. Duranton, Gilles & Puga, Diego, 2001. "From Sectoral to Functional Urban Specialization," CEPR Discussion Papers 2971, C.E.P.R. Discussion Papers.
  18. Paul Cheshire, 2000. "Endogenous Processes in European Regional Growth: Convergence and Policy," Growth and Change, Wiley Blackwell, vol. 31(4), pages 455-479.
  19. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
  20. Roback, Jennifer, 1982. "Wages, Rents, and the Quality of Life," Journal of Political Economy, University of Chicago Press, vol. 90(6), pages 1257-78, December.
  21. Audretsch, David B, 1998. "Agglomeration and the Location of Innovative Activity," CEPR Discussion Papers 1974, C.E.P.R. Discussion Papers.
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  23. Andrés Rodríguez-Pose & Ugo Fratesi, 2003. "Between development and social policies: the impact of European Structural Funds in Objective 1 Regions," European Economy Group Working Papers 28, European Economy Group.
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  25. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
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