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Cities, hinterlands and agglomeration shadows: spatial developments in Finland over 1880-2004

  • Hannu Tervo

    ()

This paper analyzes long-term spatial developments in Finland by focusing on two predictions of the new economic geography (NEG) models, the increasing persistence of locational patterns and the emerging agglomeration shadow, i.e. the rising dominance of growth centers. Pre- and post-war periods are distinguished to roughly express the shift from an agriculture-based economy to a post-industrial country. The analyses base on the assumption that each of the 19 Finnish regions has a center of its own and the rest of the region forms its local hinterland. The empirical analysis is based on regional population data from 1880 to 2004 at decade intervals. First, to analyze the persistence of locational patterns the variation in the rank of regions over time and the evolution in rank-size distributions at different stages of development are examined. Second, to analyze the dominance of centers and causal processes between cities and their local hinterland before and after WWII an extension of the Granger causality method using a panel framework is applied. The results indicated that persistence in locational patterns increased in Finland during the processes of industrialization and urbanization. Furthermore, in the pre-war period, centers and their hinterlands grew hand-in-hand, while the post-war period shows that cities cast an agglomeration shadow over their local hinterland. In all, the paper gives evidence in favour of the NEG predictions.

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File URL: http://www-sre.wu.ac.at/ersa/ersaconfs/ersa10/ERSA2010finalpaper147.pdf
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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa10p147.

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Date of creation: Sep 2011
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Handle: RePEc:wiw:wiwrsa:ersa10p147
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  1. Hannu Tervo, 2009. "Centres and Peripheries in Finland: Granger Causality Tests Using Panel Data," Spatial Economic Analysis, Taylor & Francis Journals, vol. 4(4), pages 377-390.
  2. Ottaviano, Gianmarco I.P. & Pinelli, Dino, 2006. "Market potential and productivity: Evidence from Finnish regions," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 636-657, September.
  3. Henry G. Overman & Yannis Ioannides, 2000. "Cross sectional evolution of the US city size distribution," LSE Research Online Documents on Economics 20137, London School of Economics and Political Science, LSE Library.
  4. Harris Dobkins, Linda & Ioannides, Yannis M., 2001. "Spatial interactions among U.S. cities: 1900-1990," Regional Science and Urban Economics, Elsevier, vol. 31(6), pages 701-731, November.
  5. Dumitrescu, Elena-Ivona & Hurlin, Christophe, 2012. "Testing for Granger non-causality in heterogeneous panels," Economic Modelling, Elsevier, vol. 29(4), pages 1450-1460.
  6. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
  7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June.
  8. Maarten Bosker & Steven Brakman & Harry Garretsen & Marc Schramm, 2005. "Looking for Multiple Equilibria when Geography Matters: German City Growth and the WWII Shock," CESifo Working Paper Series 1553, CESifo Group Munich.
  9. repec:cup:cbooks:9780521875325 is not listed on IDEAS
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  11. Venet, Baptiste & Hurlin, Christophe, 2001. "Granger Causality Tests in Panel Data Models with Fixed Coefficients," Economics Papers from University Paris Dauphine 123456789/6159, Paris Dauphine University.
  12. Erkan Erdil & I. Hakan Yetkiner, 2009. "The Granger-causality between health care expenditure and output: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 41(4), pages 511-518.
  13. Xavier Gabaix, 1999. "Zipf'S Law For Cities: An Explanation," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 739-767, August.
  14. Xavier Gabaix & Rustam Ibragimov, 2007. "Rank-1/2: A Simple Way to Improve the OLS Estimation of Tail Exponents," NBER Technical Working Papers 0342, National Bureau of Economic Research, Inc.
  15. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2009. "Do New Economic Geography agglomeration shadows underlie current population dynamics across the urban hierarchy?," Papers in Regional Science, Wiley Blackwell, vol. 88(2), pages 445-466, 06.
  16. Donald R. Davis & David E. Weinstein, 2001. "Bones, Bombs and Break Points: The Geography of Economic Activity," NBER Working Papers 8517, National Bureau of Economic Research, Inc.
  17. Brakman, Steven & Garretsen, Harry, 2006. "New economic geography: Closing the gap between theory and empirics," Regional Science and Urban Economics, Elsevier, vol. 36(5), pages 569-572, September.
  18. Mark D. Partridge & Dan S. Rickman & Kamar Ali & M. Rose Olfert, 2008. "Lost in space: population growth in the American hinterlands and small cities," Journal of Economic Geography, Oxford University Press, vol. 8(6), pages 727-757, November.
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