How polycentric is a monocentric city? Centers, spillovers and hysteresis

Gabriel Ahlfeldt and Nicolai Wendland

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: We assess the extent to which firms in an environment of decreasing transport costs and industrial transformation value the benefits of proximity to a historic central business district (CBD) and agglomeration economies in their location decisions. Taking a hybrid perspective of classical bid-rent theory and a world where clustering of economic activity is driven by between-firm spillovers, Berlin, Germany, from 1890 to 1936 serves as a case in point. Our results suggest that the average productivity effect of a doubling of between-firm spillovers over the study period increases from 3.5% to 8.3%. As the city transforms into a service-based economy, several micro-agglomerations emerge. Their locations close to the CBD still make the city look roughly monocentric. This is in line with a hysteresis effect in which second-nature geography drives the ongoing strength of a historic city center even though the importance of the originally relevant first-nature geography has vanished.

Date: 2012-09
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Published in Journal of Economic Geography 1 (2012-09) : pp. 53-83

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http://dx.doi.org/10.1093/jeg/lbs013

Related works:
Journal Article: How polycentric is a monocentric city? Centers, spillovers and hysteresis (2013)
Working Paper: How polycentric is a monocentric city?: centers, spillovers and hysteresis (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:62242

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