Big or small cities? On city size and economic growth

Frick, Susanne A. ORCID: https://orcid.org/0009-0007-0885-7331 and Rodríguez-Pose, Andrés 2018. Big or small cities? On city size and economic growth. Growth and Change: A Journal of Urban and Regional Policy 49 (1) , pp. 4-32. 10.1111/grow.12232

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Abstract

Policy makers and academics frequently emphasize a positive link between city size and economic growth. The empirical literature on the relationship, however, is scarce and uses rough indicators for the size of a country's cities, while ignoring factors that are increasingly considered to shape this relationship. In this paper, we employ a panel of 113 countries between 1980 and 2010 to explore whether 1) there are certain city sizes that are growth enhancing and 2) how additional factors highlighted in the literature impact the city size/growth relationship. The results suggest a nonlinear relationship which is dependent on the country's size. In contrast to the prevailing view that large cities are growth-inducing, for a majority of countries relatively small cities of up to 3 million inhabitants are more conducive to economic growth. A large share of the urban population in cities of more than 10 million inhabitants is only growth promoting in countries with an urban population of 28.5 million and more. In addition, the relationship is highly context-dependent: a high share of industries that benefit from agglomeration economies, a well-developed urban infrastructure, and an adequate level of governance effectiveness allow countries to take advantage of agglomeration benefits from larger cities.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Geography and Planning (GEOPL)
Publisher:	Wiley
ISSN:	0017-4815
Date of First Compliant Deposit:	21 February 2024
Date of Acceptance:	13 August 2017
Last Modified:	11 Nov 2024 16:45
URI:	https://orca.cardiff.ac.uk/id/eprint/165673

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