Urban Growth Drivers in a Europe of Sticky People and Implicit Boundaries

Posted: 15 Dec 2008

See all articles by Paul C. Cheshire

Paul C. Cheshire

London School of Economics & Political Science

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia

Date Written: January 2009

Abstract

We investigate urban GDP per capita growth across the EU12 using data for functionally defined cities—rather than administrative regions. We test hypotheses on the role of human capital, EU integration and fragmentation of urban government and explore spatial dependence and mechanisms of spatial interaction. Results are acceptable on standard econometric tests without measures of spatial interaction but there is spatial dependence. If variables reflecting spatial adjustment are included, they are statistically significant and eliminate spatial dependence. Not only do the results now provide consistent estimates of parameters, but they also support relevant theoretical insights and show national borders are still significant barriers to economic adjustment. People in Europe are sticky so it is unreasonable to assume spatial disparities will disappear. Our findings also imply that cities in Europe form national rather than a single continental system.

Keywords: growth, cities, local public goods, spatial adjustment, local economic growth

JEL Classification: H41, H73, O18, R11, R50

Suggested Citation

Cheshire, Paul and Magrini, Stefano, Urban Growth Drivers in a Europe of Sticky People and Implicit Boundaries (January 2009). Journal of Economic Geography, Vol. 9, Issue 1, pp. 85-115, 2009, Available at SSRN: https://ssrn.com/abstract=1315940 or http://dx.doi.org/lbn044

Paul Cheshire (Contact Author)

London School of Economics & Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

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