From Sectoral to Functional Urban Specialization

Gilles Duranton and Diego Puga

No 2971, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We document and then develop a model explaining and relating changes in firms? organization and in urban structure. Sharing of business services by headquarters and of sector-specific intermediates by production plants within a city reduces costs, while congestion increases with city size. A fall in the costs of remote management leads to a shift in urban structure, from a configuration where cities specialize by sector and host integrated headquarters and production plants, to a configuration where cities specialize by function, with headquarters from different sectors and business services clustered in a few large cities and production plants from each sector clustered in smaller separate cities.

Keywords: Functional specialization; Cities; Business services; Headquarters (search for similar items in EconPapers)
JEL-codes: L23 R12 R30 (search for similar items in EconPapers)
Date: 2001-09
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Citations: View citations in EconPapers (14)

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Related works:
Journal Article: From sectoral to functional urban specialisation (2005)
Working Paper: From Sectoral to Functional Urban Specialization (2002)
Working Paper: From Sectoral To Functional Urban Specialisation (2001)
Working Paper: From sectoral to functional urban specialisation (2001)
Working Paper: From sectoral to functional urban specialisation (2001)
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