Agglomeration and Growth: Cross-Country Evidence

Marius Brülhart and Federica Sbergami

Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) from Université de Lausanne, Faculté des HEC, DEEP

Abstract: We investigate the impact of within-country spatial concentration of economic activity on country-level growth, using cross-section OLS and dynamic panel GMM estimation. Agglomeration is measured alternatively through measures of urbanization and through indices of spatial concentration based on data for sub-national regions. Across estimation techniques, data sets and variable definitions, we find evidence that supports the "Williamson hypothesis": agglomeration boosts GDP growth only up to a certain level of economic development. The critical level is estimated at some USD 10,000, corresponding roughly to the current per-capita income level of Brazil or Bulgaria. This implies that the tradeoff between national growth and inter-regional equality may gradually lose its relevance.

Keywords: economic growth; agglomeration; urbanization; dynamic panel estimation (search for similar items in EconPapers)
JEL-codes: O4 R11 R12 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-geo and nep-ure
Date: 2008-08
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Related works:
Working Paper: Agglomeration and Growth: Cross-Country Evidence (2008)
Journal Article: Agglomeration and growth: Cross-country evidence (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:lau:crdeep:08.04

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