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Agglomeration and Economic Growth: Some Puzzles


  • Federica Sbergami



Knowledge spillovers and technical externalities play a fundamental role in basically all endogenous growth models. In a context of increasing returns to scale and transportation costs it seems reasonable to assume that regional agglomeration of production and R&D activities is linked to aggregate growth. This work is an empirical investigation of the predictions provided by some theoretical studies according to which agglomeration increases with growth and growth increases with agglomeration (Martin and Ottaviano, 2001, Baldwin and Forslid, 2000 and Fujita and Thisse, 2001). The behaviour of six European countries over twelve years (from 1984 to 1995) is analysed using panel data techniques. In particular, a "traditional" growth equation à la Barro, in which an index of regional agglomeration of industrial activities is added to the "typical" regressors, is estimated. Surprisingly, instead of concentration in a few areas, as theory predicts, equal dispersion of economic activities across regions sems to be good for national aggregate growth. Besides, there is also some evidence that regional dispersion of sectors with a high technological content is growth enhancing.

Suggested Citation

  • Federica Sbergami, 2002. "Agglomeration and Economic Growth: Some Puzzles," IHEID Working Papers 02-2002, Economics Section, The Graduate Institute of International Studies.
  • Handle: RePEc:gii:giihei:heiwp02-2002

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    Cited by:

    1. Cerina, Fabio & Mureddu, Francesco, 2014. "Is agglomeration really good for growth? Global efficiency, interregional equity and uneven growth," Journal of Urban Economics, Elsevier, vol. 84(C), pages 9-22.
    2. Johanna Vogel, 2012. "Agglomeration and Growth: Evidence from the Regions of Central and Eastern Europe," ERSA conference papers ersa12p1089, European Regional Science Association.
    3. Madalina-Stefania Dirzu & Peter Nijkamp, 2013. "The Dynamics Of Agglomeration Processes And Their Contribution To Regional Development Across The Eu," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 7(1), pages 17-35, JUNE.
    4. Frick, Susanne A. & Rodríguez-Pose, Andrés, 2018. "Change in urban concentration and economic growth," World Development, Elsevier, vol. 105(C), pages 156-170.
    5. Ron Martin, 2008. "National growth versus spatial equality? A cautionary note on the new ‘trade-off’ thinking in regional policy discourse," Regional Science Policy & Practice, Wiley Blackwell, vol. 1(1), pages 3-13, November.
    6. Mukhlis & Bernadette Robiani & Taufiq Marwa & Rosmiyati Chodijah, 2017. "Agglomeration of Manufacturing Industrial, Economic Growth, And Interregional Inequality in South Sumatra, Indonesia," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 214-224.
    7. A. A. Aletdinova & A. V. Koritsky, 2020. "Comparative Analysis of the Return on Human Capital in the European and Asian Regions of Russia," Regional Research of Russia, Springer, vol. 10(2), pages 213-219, April.
    8. Maarten Bosker, 2007. "Growth, Agglomeration and Convergence: a Space-time Analysis for European Regions," Spatial Economic Analysis, Taylor & Francis Journals, vol. 2(1), pages 91-100.
    9. Shanzi Ke, 2010. "Agglomeration, productivity, and spatial spillovers across Chinese cities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 157-179, August.

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    International Economics; Trade; Regional Agglomeration; Growth;
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