From sectoral to functional urban specialisation

Gilles Duranton and Diego Puga

Working Papers from University of Toronto, Department of Economics

Abstract: Striking evidence is presented of a previously unremarked transformation of urban structure from mainly sectoral to mainly functional specialisation. We offer an explanation showing that this transformation is inextricably interrelated with changes in firms' organisation. A greater variety of business services for headquarters and of sector-specific intermediates for production plants within a city reduces costs, while congestion increases with city size. A fall in the costs of remote management leads to a transformation of the equilibrium urban and industrial structure. Cities shift from specialising by sector -- with integrated headquarters and plants -- to specialising mainly by function -- with headquarters and business services clustered in larger cities, and plants clustered in smaller cities.

Keywords: functional specialisation; cities; headquarters; business services (search for similar items in EconPapers)
JEL-codes: L23 R12 R30 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2001-02-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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https://www.economics.utoronto.ca/public/workingPapers/sec2func.pdf Main Text (application/pdf)

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 Specialization (2001)
Working Paper: From sectoral to functional urban specialisation (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:dpuga-01-01

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