Agglomeration and Growth: Cross-Country Evidence

37 Pages Posted: 2 Dec 2008

See all articles by Marius Brülhart

Marius Brülhart

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne)

Federica Sbergami

University of Geneva - Department of Political Economics

Date Written: August 2008

Abstract

We investigate the impact of within-country spatial concentration of economic activity on country-level growth, using cross-section OLS and dynamic panel GMM estimation. Agglomeration is measured alternatively through measures of urbanization and through indices of spatial concentration based on data for sub-national regions. Across estimation techniques, data sets and variable definitions, we find evidence that supports the "Williamson hypothesis": agglomeration boosts GDP growth only up to a certain level of economic development. The critical level is estimated at some USD 10,000, corresponding roughly to the current per-capita income level of Brazil or Bulgaria. This implies that the tradeoff between national growth and inter-regional equality may gradually lose its relevance.

Keywords: agglomeration, dynamic panel estimation, economic growth, urbanisation

JEL Classification: O4, R11, R12

Suggested Citation

Brulhart, Marius and Sbergami, Federica, Agglomeration and Growth: Cross-Country Evidence (August 2008). CEPR Discussion Paper No. DP6941, Available at SSRN: https://ssrn.com/abstract=1307531

Marius Brulhart (Contact Author)

University of Lausanne - School of Economics and Business Administration (HEC-Lausanne) ( email )

Unil Dorigny, Batiment Internef
Lausanne, 1015
Switzerland
+41 21 692 3471 (Phone)
+41 21 692 3365 (Fax)

HOME PAGE: http://www.hec.unil.ch/mbrulhar/

Federica Sbergami

University of Geneva - Department of Political Economics ( email )

40, boulevard du Pont-d'Arve
Geneva 4, CH-1211
Switzerland

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