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Small Cities Blues: Looking for Growth Factors in Small and Medium-Sized Cities

  • George A. Erickcek

    ()

    (W.E. Upjohn Institute for Employment Research)

  • Hannah McKinney

    (Kalamazoo College)

The purpose of this exploratory study is to attempt to identify particular public policies which have the potential to increase the economic viability of smaller metropolitan areas and cities. We identify characteristics associated with smaller metro areas that performed better-than-expected (winners) and worse-than-expected (losers) during the 1990s, given their resources, industrial mix, and location as of 1990. Once these characteristics have been identified, we look for evidence that public policy choices may have promoted and enhanced a metro area's ability to succeed and to regain control of its own economic destiny. Methodologically, we construct a regression model which identifies the small metro areas that achieved higher-than-expected economic prosperity (winners) and the areas that saw lower-than-expected economic prosperity (losers) according to the model. Next, we explore whether indications exist that winners and losers are qualitatively different from other areas in ways that may indicate consequences of policy choices. A cluster analysis is completed to group the metro areas based on changes in a host of social, economic, and demographic variables between 1990 and 2000. We then use contingency table analysis and ANOVA to see if "winning" or "losing," as measured by the error term from the regression, is related to the grouping of metro areas in a way that may indicate the presence of deliberate and replicable government policy.

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Paper provided by W.E. Upjohn Institute for Employment Research in its series Upjohn Working Papers and Journal Articles with number 04-100.

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Date of creation: Jun 2004
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Handle: RePEc:upj:weupjo:04-100
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  1. Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
  2. Sheila A. Martin & Richard McHugh & Stanley R. Johnson, 1991. "Influence of Location on Productivity: Manufacturing Technology in Rural and Urban Areas, The," Center for Agricultural and Rural Development (CARD) Publications 91-wp83, Center for Agricultural and Rural Development (CARD) at Iowa State University.
  3. Paul Krugman, 1998. "Space: The Final Frontier," Journal of Economic Perspectives, American Economic Association, vol. 12(2), pages 161-174, Spring.
  4. Michael E. Porter, 2000. "Location, Competition, and Economic Development: Local Clusters in a Global Economy," Economic Development Quarterly, , vol. 14(1), pages 15-34, February.
  5. Barrow, Michael & MikeHall, 1994. "The impact of a large multinational organisation on a small local economy," Discussion Papers in Economics 04/94, Department of Economics, University of Sussex.
  6. Sheila A Martin & Richard Mchugh & S R Johnson, 1991. "The Influence Of Location On Productivity: Manufacturing Technology In Rural And Urban Areas," Working Papers 91-10, Center for Economic Studies, U.S. Census Bureau.
  7. H. D. Watts & J. D. Kirkham, 1999. "Plant Closures by Multi-locational Firms: A Comparative Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(5), pages 413-424.
  8. Robert W. Wassmer, 1994. "Can Local Incentives Alter a Metropolitan City's Economic Development?," Urban Studies, Urban Studies Journal Limited, vol. 31(8), pages 1251-1278, October.
  9. Leon Shilton & Craig Stanley, 1999. "Spatial Patterns of Headquarters," Journal of Real Estate Research, American Real Estate Society, vol. 17(3), pages 341-364.
  10. Xavier Gabaix, 1999. "Zipf's Law and the Growth of Cities," American Economic Review, American Economic Association, vol. 89(2), pages 129-132, May.
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