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The death and life of great British cities

Stephan Heblich, David Krisztián Nagy, Alex Trew and Yanos Zylberberg

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: This paper studies how cities' industrial structure shapes their life and death. Our analysis exploits the large heterogeneity in the early composition of English and Welsh cities. We extract built-up clusters from early historical maps, identify settlements at the onset of the nineteenth century, and isolate exogenous variation in the nature of their rise during the transformation of the economy by the end of the nineteenth century. We then estimate the causal impact of cities' population and industrial specialization on their later dynamics. We find that cities specializing in a small number of industries decline in the long run. We develop a dynamic spatial model of cities to isolate the forces which govern their life and death. Intratemporally, the model captures the role of amenities, land, local productivity and trade in explaining the distribution of economic activity across industries and cities. Intertemporally, the model can disentangle the role of aggregate industry dynamics from city-specific externalities. We find that the long-run dynamics of English and Welsh cities is explained to a large extent by such dynamic externalities a la Jacobs.

Keywords: Specialization; cities over time; quantitative economic geography. (search for similar items in EconPapers)
JEL-codes: F63 N93 O14 R13 (search for similar items in EconPapers)
Date: 2023-07
New Economics Papers: this item is included in nep-geo, nep-gro, nep-his, nep-inv and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1867

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