Rushing to opportunity: City growth and entrepreneurship

Kristian Behrens and Nathan Seegert

Journal of Urban Economics, 2025, vol. 149, issue C

Abstract: The growth of many cities and industries differs, with some growing slowly and others experiencing rapid change—i.e., rushes. To explain these differences and explore the mechanisms of growth, we develop a model centered on a new trade-off between time-varying fundamentals and time-invariant – but rank-dependent – opportunities. Early population flows depend on the opportunities new entities provide, whether from available land in cities or the accumulation of entrepreneurship human capital in firms. Our model can explain the existence of rushes and their size. We provide suggestive empirical evidence on city- and industry growth consistent with the model’s predictions.

Keywords: Opportunities; Rapid change; City growth; Entrepreneurship (search for similar items in EconPapers)
JEL-codes: J24 L16 R12 R14 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:149:y:2025:i:c:s0094119025000488

DOI: 10.1016/j.jue.2025.103783

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