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Average city size and economic growth

Susanne A. Frick and Andrés Rodríguez-Pose

Cambridge Journal of Regions, Economy and Society, 2016, vol. 9, issue 2, 301-318

Abstract: This article examines the link between average city size and aggregate economic growth in a total of 114 countries for the period between 1960 and 2010. The analysis—which includes pooled two-stage least-squares (2SLS), panel data analysis, system generalized method-of-moments (GMM) estimator and an instrumental variable (IV) approach—finds that, in contrast to the prevailing view, there is no universal positive relationship between average city size and economic growth and that the results vary between high-income and developing countries. In high-income countries, there is consistent evidence of a positive albeit decreasing link between city size and economic growth. In contrast, the relationship does not hold for developing countries, for which most of the coefficients display insignificant results or point towards a negative connection between both factors.

Date: 2016
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Cambridge Journal of Regions, Economy and Society is currently edited by Judith Clifton, Anna Davies, Betsy Donald, Emil Evenhuis, Stefania Fiorentino (Associate Editor), Harry Garretsen, Meric Gertler, Amy Glasmeier, Mia Gray, Robert Hassink, Dieter Kogler, Michael Kitson, Linda Lobao, Charles van Marrewijk, Ron Martin, Peter Sunley, Peter Tyler and Chun Yang

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