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Abstract:
If firms were animals rather than economic entities, a behavioral scientist trying to describe their traits would observe that firms tend to be found in herds and usually migrate towards the biggest watering holes. This paper surveys the literature on the questions why firms grow stronger with size, why they are found in herds, and what the effects are of meeting other herds around the watering holes. In economist-speak, I review the empirical literature on internal and external economies of scale. Internal scale economies arise on the level of a single firm. External scale economies arise on the level of an industry or a region. For each type of scale economies, I consider static and dynamic effects.

Abstract:
This paper sets up an economic geography model to show the endogenous forces that determine the degree of industry concentration within a country in the course of economic development. The model includes centrifugal forces, such as home market effects and access to intermediate suppliers, and centripetal forces, such as demand pull of dispersed resources and congestion effects. Economic development increases the size of the industrial sector in terms of employment relative to the size of the agricultural sector. The relative strength of centripetal and centrifugal forces depends on the initial industry distribution, transport costs, and the level of economic development. These parameters lead to an inverted U-curve pattern of industry concentration, which is first increasing and then decreasing with per capita GDP. The model shows why the curve is more pronounced in newly industrializing economies than in industrialized countries, explaining exceptionally high primacy ratios in today's LDCs.

Abstract:
Urban concentration differs across countries. One determinant of these differences is economic development, which first increases and subsequently decreases urban concentration. I condition the degree of urban concentration on the potential of countries to develop a balanced urban system. These conditions are approximated by the land area, population density and density of the transportation system, which all decrease urban concentration. It is also found that countries with a long independent urban history have lower degrees of urban concentration than countries with a recent colonial past. Furthermore, I assess the impact of some historic variables and historic patterns of urban concentration on current patterns of concentration.

Abstract:
The share of the largest city in the total urban population - the so called primacy ratio - differs substantially across countries. One hypothesis in the literature is that economic development first increases and subsequently decreases primacy. The alternative hypothesis is that cities grow in a parallel way, such that primacy ratios depend on geography or history rather than economics. I test these hypotheses for a cross section of countries. Evidence is found for a bell shaped relationship between primacy and economic development conditional on the potential of countries to develop a balanced urban system. Still historic variables influence current primacy ratios.

Abstract:
This paper presents an economic geography model to show the spatial effects of economic integration. While other authors mainly focused on the explanation of cumulative causation effects that lead to complete concentration or absolutely equal dispersion of industries, this paper explains why limits to industrial agglomeration can be observed in reality. It argues that cumulative causation effects can be counterbalanced by further centrifugal forces such as land rents, adverse self-fulfilling expectations and congestion effects. For large scale agglomerations, congestion effects may be the most relevant force that stops a cumulative trend towards complete concentration caused by scale economies and trade costs.