Is New York City Still Propelling Growth In Its Suburbs?: A Study Of Economic Spillover Effects Through Spatial Contiguity

In this paper I investigate from a strict efficiency perspective whether or not New York City’s suburbs should be helping the city in its economic development efforts. By analyzing metropolitan New York City, I am able to take advantage of the area’s spatial size and the ready availability of a pool of economic data below the metropolitan level (counties). In particular I disaggregate New York City’s economy into three sectors and the suburban geography into three rings and four radial subregions. In the case of the employment equation, national city-based industry variables tended to have expected effects on suburban economic growth when they were significant at all. Greater articulation of the geography of analysis through the inclusion of fixed effects does change the nature of these findings slightly, however. More surprising was a swing in the direction of the influence on suburban economic growth of the City’s nonfinancial nonmanufacturing sector when the analysis was performed using earnings data. This differential effect is rationalized by the City’s ability to retain high-wage service workers who reside in the suburbs