Atlantic Economic Journal

, Volume 45, Issue 2, pp 133–147

42 Years of Urban Growth and Industry Composition

Article
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Abstract

In recent decades, knowledge spillovers have taken the helm as the driving force of growth in cities. The ease of communicating ideas and the sheer density of large urban areas have made this a plausible explanation for continued growth of employment and population in cities. However, there is little consensus on the nature of the optimal conditions for stimulating knowledge spillovers. This paper identifies these optimal conditions by exploring the relative importance of industry specialization, diversity and competition across all industries and all metropolitan areas from 1970 to 2011 in the U.S. Long-term employment growth in cities is found to be driven by industry diversity combined with a high level of competition. This combination fosters the greatest amount of cross-industry fertilization of ideas and knowledge spillovers.

Keywords

Urban growth Agglomeration Diversity Specialization Competition 

JEL

O1 R0 R1 

Copyright information

© International Atlantic Economic Society 2017

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of Massachusetts BostonBostonUSA

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