HAVE CHANGES IN LOCALIZATION ECONOMIES BEEN RESPONSIBLE FOR DECLINING PRODUCTIVITY ADVANTAGES IN LARGE CITIES?*

This paper investigates whether economies of urbanization and localization changed in two-digit manufacturing industries over the period 1967-1977. Estimates of changes in such economies indicate that the localization advantages of large industries declined in several industries, but that urbanization advantages increased for a small number of industries and decreased for a small number. Moreover, the absolute change in two-digit industry employment tends to be negatively correlated with industry size, city size held constant, and positively associated with city size, industry size held constant. These latter findings tend to support the findings regarding changes in external economies.     

SPATIAL IMPACTS OF AGGLOMERATION EXTERNALITIES*

ABSTRACT This article examines the extent to which agglomeration economies in one location affect employment growth and establishment births, using data from the Dutch province of South‐Holland. The data are of particular interest because they represent a census, rather than a sample, of all establishments and the location of establishments can be pinpointed to within 416 (postal) zip code areas averaging less than 6 km² in size. Results suggest that agglomeration economies positively affect employment growth and the location of new establishments, but with the possible exception of manufacturing, this effect dies out quickly with distance. Thus, the main finding is that for many industries, agglomerative forces may well operate at a geographic scale that is smaller than a city.     

INTRA-REGIONAL EMPLOYMENT GROWTH IN LUXEMBOURG (1994–2005)

The specialization of city-centres towards more advanced service activities has mostly been studied in the largest city-regions, the case of smaller urban centres being less well documented. In that context, the objective of this article is to analyse the role of sectoral and regional factors in employment growth in Luxembourg between 1994 and 2005. Using statistical data from the Luxembourg General Inspection of Social Security, this contribution distinguishes 12 categories of manufacturing industries and services according to an OECD-Eurostat knowledge-based classification. Five intra-regional areas are distinguished based on morphological and functional criteria in the Luxembourg Metropolitan Area. Using several indexes, this article first analyses the sectoral specialization and geographical concentration of employment. A model of intra-regional employment growth, initially developed by Marimon and Zilibotti and applied at the European level, is then shown to account for 40 per cent of employment growth. An estimation of the contributions of sectoral and geographical factors highlights the primacy of the latter over the former. Finally, the construction of virtual economies confirms the City's overall lower performance as compared to its close periphery. Results underscore a process of functional integration in the Luxembourg metropolitan area: as the core of the city undergoes a specialization process, the urban area benefits from a relocation of activities less sensitive to distance and transaction costs, while the periphery becomes increasingly diversified, notably in the South where traditional industrial activities are being replaced by service activities. These results suggest that the evolution pattern of employment growth in Luxembourg is very similar to that of some larger metropolitan centres, owing to its exceptional financial service activities.     

FIRST NATURE, SECOND NATURE, AND METROPOLITAN LOCATION

ABSTRACT. Economies of scale, transportation costs, and factor mobility can interact to produce agglomerations even in the absence of any pure external economies. This paper offers a monopolistic competition model of a city that serves an agricultural hinterland; unlike most analyses in location theory, the model is fully general equilibrium, but it has strong links to older concepts in geography, notably the idea of "market potential." The analysis shows that the forward and backward linkages that hold a population concentration together also allow that concentration to occur in a variety of possible sites—that is, there are multiple equilibria (indeed a continuum) for metropolitan location.     

METROPOLITAN AGGLOMERATION AND SECTORAL AGGREGATION*

ABSTRACT. This paper proposes a procedure with which sectoral production functions can be aggregated to metropolitan production functions in the presence of external economies of scale. The procedure specifies the production functions as part of general equilibrium models. Consistency of a one-sector and a two-sector general equilibrium model is defined in terms of equality of the distribution of a nation's population over its metropolitan areas in autarky.     

HOW DO DIFFERENCES IN PROPERTY TAXES WITHIN CITIES AFFECT URBAN SPRAWL?*

ABSTRACT We develop a duocentric‐city model and show that the ratio between the property tax in the suburbs and in the center has an ambiguous impact on the size of the city. We test this model by using a dataset of effective property tax rates which we developed using GIS techniques for central cities and suburbs in 445 urbanized areas. Results from the empirical analyses suggest that a lower property tax rate in the suburbs as compared to the central city is associated with more expansive urban growth and a greater level of decentralization of population and employment.     

Plant Scale, Industry Agglomeration, and the Outlook for Regional Employment in Central European Economies

A common outcome among Central European transition economies is the significant variation in regional unemployment rates, a condition symptomatic of allocative inefficiency in the labor market. Several studies attribute such variation, at least in part, to large vertically integrated industrial complexes erected during the period of central planning, and in turn to subsequent employment adjustment that operates to the disadvantage of local workers during transition. In this study I provide a test of this hypothesis by examining the correlates of local employment change at the outset of reforms, and specifically adjustment triggered by extreme variation in local plant size and scale externalities.     

TESTING URBANIZATION ECONOMIES IN MANUFACTURING INDUSTRIES: URBAN DIVERSITY OR URBAN SIZE?

ABSTRACT Whether urbanization economies stem from urban diversity or urban scale is not clear in the literature. This paper uses the 2004 China manufacturing census data and tests simultaneously the effects of urban size and industrial diversity on firm productivity, controlling for localization economies and human capital externalities. We find that productivity increases with city size—but at a diminishing rate, and the city size effect becomes negative for cities with population over two million. Firms also benefit from industrial diversity, and the strength of such benefit increases with city size but decreases with firm size. The characteristics of agglomeration economies in a transition economy are also discussed.     

URBAN PRODUCTIVITY: CITY SIZE OR INDUSTRY SIZE*

ABSTRACT This paper analyzes the effect of city size and industry size on urban productivity in the food processing industry. Some formulations suggest productivity is associated with industry size rather than city size. However, when allowance is made for the tendency of food processing to locate near relevant raw materials and for regional dummies, there is no support for industry scale economies. Agglomeration effects, associated with city size, do exist. The central estimates are based on the Chan-Mountain version of the translog production function. The results provide information on some facets of the appropriate balance between industrial and agricultural production.     

北京都市区就业-居住空间结构及特征研究

近二十年来,在经济社会转型和城市化进程不断加快的背景下,我国许多大城市的就业-居住空间结构发生了巨大的变化。本研究以北京都市区为例,建立北京都市区就业-居住基础地理信息数据库,运用GIS空间分析技术对北京就业-居住空间关系进行多尺度分析,在界定就业中心和居住中心的基础上,评价北京都市区的就业与居住平衡状况。研究结果表明,就业-居住分离是当今北京城市空间结构的突出特征。     

Central Cities as Engines of Metropolitan Area Growth*

The paper analyzes the role of central cities as engines of economic growth in their metropolitan area. We wonder if there are increasing returns to central city growth at the metropolitan level arising from the positive externalities associated with the unique features of central cities. To answer this question we analyze the causality between the economic growth of Spanish central cities and the growth of the other jurisdictions belonging to their metropolitan area (i.e., the suburbs). The analysis uses population and economic activity data for a sample of 28 Spanish metropolitan areas during 35 years. We use a Vector Error Correction Model (VECM) framework to estimate long‐run equilibrium relationships between the growth of central cities and their suburbs. The combination of panel data and a VECM is an innovative approach that is still being developed in econometrics. The results suggest that central city growth has a long‐run positive effect on the growth of the suburbs. We also inquire as to whether or not this positive effect depends on the size of the central city. The results suggest that the effect is much higher in the case of the largest cities, but that it is also important in the case of the smaller ones.     

THE INFLUENCE OF ECONOMIC DIVERSITY ON UNEMPLOYMENT AND STABILITY*

ABSTRACT. For many years, regional scientists, economists, and geographers have been unable to clarify the influence of economic diversity on unemployment and instability in regional economies of the United States, the United Kingdom, and Canada. This article presents plausible theory, proper units of analysis, valid measures, and more inclusive models of the diversity-stability relationship. The findings are generalizable because the sample includes most metropolitan areas in the U.S. The empirical analysis estimates the influence of diversity, employment concentrated in unstable industries, population size, growth rate, and control variables on unemployment and employment instability during the 1972–88 period. The results indicate that metropolitan areas which are more diverse experience lower unemployment rates and less instability than areas which are less diverse.     

Berlin: The Metropolis as a Production Space

Metropolitan regions can be regarded as economic areas comprising various sub-economies with different forms of economic and spatial organization. The purpose of this article is to undertake a critical appraisal of the vision of Berlin as a 'service metropolis' through empirical observation of sectoral trends and locational patterns in the city, and to establish that Berlin's urban area is a major production space with a complex fabric of specialized production districts. This spatial organization will be examined in terms of the level of agglomeration of various sub-economies with special reference to the formation of local enterprise clusters in the Berlin economic area. Berlin's specialization profile and the employment trend in the city compared with other metropolitan cities in Germany make it clear that the metropolis of Berlin is under threat as a production space, and this threat partly stems from the way in which the real estate business has developed in the Berlin area.     

THE STRUCTURE OF METROPOLITAN FACTOR AND PRODUCT MARKETS*

ABSTRACT. In this study we use a translog profit function and iterate seemingly unrelated regressions to estimate a system of factor demand and output supply functions for metropolitan economies. Our sample includes all metropolitan areas defined by the Census in 1977 for the period 1962 to 1982. Estimation shows that all price elasticities are elastic and that the signs are as expected. These results hold true for virtually all model specifications. Our findings indicate that federal, state, and local tax policies have significant impacts on factor demand and output supply. Public investment plays a positive and significant, but small, role in increasing output and in complementing other factors, although this influence has declined over time. Additionally, capital provided by the private sector has a substantially larger impact on output and employment than does capital provided by the public sector.     

Employment Deconcentration: A New Perspective on America's Postwar Urban Evolution

In this study we show that during the postwar era the United States experienced a decline in the share of urban employment accounted for by the relatively dense metropolitan areas and a corresponding rise in the share of relatively less dense ones. This trend, which we call employment deconcentration , is distinct from the other well–known regional trend, namely, the postwar movement of jobs and people from the frostbelt to the sunbelt. We also show that deconcentration has been accompanied by a similar trend within metropolitan areas, wherein employment share of the more dense sections of MSAs has declined and that of the less dense sections risen. We provide a general equilibrium model with density–driven congestion costs to suggest an explanation for employment deconcentration.     

SPRAWL,BLIGHT, AND THE ROLE OF URBAN CONTAINMENT POLICIES: EVIDENCE FROM U.S. CITIES

U.S. post‐war suburbanization has reshaped the spatial pattern of growth in many metropolitan areas, with population and employment shift toward the suburbs resulting in the urban decay of central cities. This being the case, the adoption of adequate anti‐sprawl policies should lead to a reduction in city blight. Availability of detailed blight measures at the city level enables us to undertake a novel empirical analysis to test this hypothesis. The empirical specification presented here identifies the specific impact of more stringent anti‐sprawl policies adopted at the metro level, proxied by the adoption of urban containment policies, on city blight. Results indicate that the adoption of such policies has effectively contributed to the reduction of downtown deterioration.     

Diversity and employment growth in Canada, 1971–2001: can diversification policies succeed?

In this paper, we explore the link between diversity in the local economy, the process of diversification and employment growth. To do so, we first examine diversification trends between 1971 and 2001 across 382 Canadian areas (urban and rural). We then examine whether or not the more diversified areas display faster employment growth. Over some periods and for some types of area they do, but over other periods they do not. Furthermore, there is no clear link between the process of diversification and growth. Also, proximity to a large diversified economic unit (metropolitan areas) tends to be associated with growth; thus, it is not only the local characteristics of regions that determine their growth levels. Our evidence suggests that economies associated with diversity can occur concurrently with economies associated with specialisation. In the light of these complex relationships, we conclude that diversification policies are difficult to justify on the grounds of employment growth and would in any case be difficult to implement successfully due to the overall inertia observed in diversity levels.     

运用空间自相关分析集聚经济类型的地理格局

集聚经济的类型决定着区域经济的发展方向。传统的度量指标是基尼系数、Ellison-Glaeser指数等,但这类指标却没有考虑相邻地区间经济的相互影响。据此,本文提出用空间自相关方法,衡量区域的集聚经济水平,并且利用2002年江苏省县级工业数据,实证分析和探讨江苏省城市化和地方化集聚经济的地理格局。     

Scale-Economy Conditions for Spatial Variation in Farm Size

Given the usual neoclassical assumptions of economic rationality, perfect competition, long-term spatial equilibrium, a Thunian context, and perfectly divisible labor and capital, this paper expresses economies of scale in farming in terms of the yield derived from a given level of intensity. If yield increases as farm scale increases, there are economies of scale. If yield decreases, there are diseconomies of scale. The literature on scale economies in agriculture suggests that scale economies accrue from increases in capital inputs, but diseconomies occur as a result of increases in farm area. The models of the spatial structure of agriculture, with farm size included, show the following: 1. Unless there are economies of scale giving way to diseconomies of scale with increases in farm size, no optimal farm area or farm scale can be defined; 2. If the optimal intensity for farming does not vary over space, the optimal farm scale or area should be constant over space; 3. If intensity varies spatially, and if the optimal economies of scale are a function of area only, farm areas should not vary spatially, and sales volume per farm should increase as market access and fertility increase; 4. It is only if intensity varies spatially and optimal scale economies are a function of both area and total quantities of nonland inputs per farm that farm area should increase as distance to market increases or fertility decreases. In this last case, quantities of nonland inputs per farm should also decrease, and usually sales volume per farm should decrease also.     

Do Suburbs Need Cities?

In this paper I examine the relationship between city and suburbangrowth over the last three decades for a sample of U.S. metropolitan areas. I develop a structuralempirical model relating city income growth to suburban growth in income, population, andhouse values. The model allows for bidirectional effects of cities on suburbs and suburbs oncities, as well as for unobserved factors affecting both city and suburbs. The simultaneous,latent-variable model is identified using a combination of exclusion and covariance restrictions.Instrumental estimation results indicate that income growth in large cities enhances suburbangrowth; but income growth in small cities has little effect.