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Scale Economies and Cities

Gill, Indermit S.; Goh, Chor-Ching
Fonte: World Bank Publicador: World Bank
Tipo: Artigo de Revista Científica
Relevância na Pesquisa
46.87%
This paper summarizes the policy-relevant insights of a generation of research on scale economies. Scale economies in production are of three types: internal economies associated with large plants, localization economies that come from sharing of inputs and infrastructure and from greater competition among firms, and urbanization economies that are generated through diversity and knowledge spillovers. The benefits (and costs) of localization and urbanization are together called “external (dis) economies” because they arise due to factors outside any single household, farm or firm. The empirical literature yields some stylized facts. Internal scale economies are low in light industries and high in heavy industries. External scale economies are amplified by economic density and dissipate with distance from places where economic activity is concentrated. Scale economies are most visibly manifest in towns and cities. To simplify somewhat, towns allow firms and farms to exploit internal scale economies, medium-sized cities help firms in an industry exploit localization economies, and large cities and metropolises provide urbanization economies to those who locate within or nearby. Scale economies have implications for policy makers. The first is that because urban settlements rise and thrive because market agents demand their services...

Urbanization in Developing Countries

Vernon Henderson
Fonte: World Bank Publicador: World Bank
Tipo: Artigo de Revista Científica
EN_US
Relevância na Pesquisa
36.56%
The rapid urbanization in many developing countries over the past half century seems to have been accompanied by excessively high levels of concentration of the urban population in very large cities. Some degree of urban concentration may be desirable initially to reduce inter- and intraregional infrastructure expenditures. But in a mature system of cities, economic activity is more spread out. Standardized manufacturing production tends to be de-concentrated into smaller and medium-size metropolitan areas, whereas production in large metropolitan areas focuses on services, research and development, and non-standardized manufacturing. The costs of excessive concentration (traffic accidents, health costs from exposure to high levels of air and water pollution, and time lost to long commutes) stem from the large size of megacities and underdeveloped institutions and human resources for urban planning and management. Alleviating excessively high urban concentration requires investments in interregional transport and telecommunications to facilitate de-concentration of industry. It also requires fiscal de-concentration...

Urbanization and (In)Formalization

Ghani, Ejaz; Kanbur, Ravi
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
36.54%
Inexorable urbanization and formalization have been the expectations in development discourse. Indeed, measures of urbanization and formalization have been provided and used as indicators of development. But while urbanization has proceeded apace in developing countries, formalization has slowed significantly over the past quarter century. These disconnect raises questions for development analysis and development policy. Why did one expect urbanization and formalization to go together in the first place? Is the link between urbanization and formalization more complex than what had once thought? What then explains the recent disconnect between urbanization and formalization? Is formalization a reasonable policy goal? May urbanization policies and formalization policies conflict? If so, what can be done to resolve the conflicts? These are the questions this paper addresses. The paper has three core sections. The first section asks what exactly is meant by formality and informality. The second section turns to urbanization processes and asks how they intersect with and interact with the incentives to formalize. The third section looks at policy. Each view of how urbanization feeds formalization has distinctive policy conclusions.

Agglomeration Economies and Productivity in Indian Industry

Lall, Somik; Shalizi, Zmarak; Deichmann, Uwe
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
46.58%
"New" economic geography theory, and the development of innovative methods of analysis have renewed interest in the location, and spatial concentration of economic activities. The authors examine the extent to which agglomeration economies contribute to economic productivity. They distinguish three sources of agglomeration economies: 1) At the firm level, from improved access to market centers. 2) At the industry level, from enhanced intra-industry linkages. 3) At the regional level, from inter-industry urbanization economies. The input demand framework they use in analysis, permits the production function to be estimated jointly with a set of cost shares, and, makes allowances for non-constant returns to scale, and for agglomeration economies to be factor-augmenting. They use firm-level data for standardized manufacturing in India, together with spatially detailed physio-geographic information that considers the availability, and quality of transport networks linking urban centers - thereby accounting for heterogeneity in the density of transport networks...

Urbanization and the Geography of Development

Henderson, J. Vernon
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
EN_US
Relevância na Pesquisa
36.5%
This paper focuses on three interrelated questions on urbanization and the geography of development. First, although we herald cities with their industrial bases as "engines of growth," does industrialization in fact drive urbanization? While such relationships appear in the data, the process is not straightforward. Among developing countries, changes in income or industrialization correlate only weakly with changes in urbanization. This suggests that policy and institutional factors may also influence the urbanization process. In fact, the relationship between industrialization and urbanization is absent in Sub-Saharan Africa. Second, do development policies have a big-city bias and, if so, what does this imply for growth and inequality? Intelligent public infrastructure investment inevitably involves picking winners. One hopes that such choices are based on market indicators, such as where industry is starting to agglomerate and where there are clear needs. Yet governments seem to favor the biggest cities which in turn draw firms and migrants to these cities. To try to avoid excessive in-migration and oversized...

Urbanization and Housing Investment

Dasgupta, Basab; Lall, Somik V.; Lozano-Gracia, Nancy
Fonte: World Bank Group, Washington, DC Publicador: World Bank Group, Washington, DC
EN_US
Relevância na Pesquisa
36.75%
This paper provides the first systematic empirical assessment of the pace at which housing investment has responded to rising demand from urbanization. The assessment used National Accounts Statistics to build a data set of residential housing investment for more than 90 countries. The data set explicitly accounts for investment by households, the government, and the private sector. The analysis finds that housing investment follows an S-shaped trajectory taking off around per capita GDP of about $3,000 (US$2005) and tapering down at per capita GDP around $36,000 (US$2005). The analysis also finds that between 2001 and 2011, housing investment in low-income economies averaged 4.56 percent of gross domestic product and 9.12 percent in upper-middle-income economies. An important finding is that countries in Sub-Saharan Africa have housing elasticities similar to comparable low-income and lower-middle-income economies. In financing housing investment, the paper finds that developing countries tend to rely much more on domestic savings and government debt...

Strategies for Urbanization and Economic Competitiveness in Burundi

World Bank Group
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Relatório
EN_US
Relevância na Pesquisa
36.71%
This report argues that urbanization brings significant opportunities for both rural and urban areas and that Burundi needs to prioritize issues of economic growth and job creation. Based on a diagnostic evaluation of the current urbanization and spatial growth, GDP, and job potential, the report highlights the importance of prioritizing policies and investments to address deficiencies in Burundi urbanization. These remedial actions will help prepare Burundi for coming urban growth and help leverage agglomeration effects, minimize negative externalities associated with rapid urbanization, and potentially reap the demographic dividend of this transition. Getting urbanization right will need to be associated with targeted implementation strategies for growth in the agribusiness and tourism sectors. A rapid move to cities is a central element of Burundi development strategy, including an increase in the urbanization rate from 11 percent to 40 percent by 2025. Burundi vision 2025 aims to aims to promote urbanization via rural-urban migration...

Ethiopia Urbanization Review; Urban Institutions for a Middle-Income Ethiopia

World Bank Group
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Report; Economic & Sector Work; Economic & Sector Work :: Other Urban Study
ENGLISH; EN_US
Relevância na Pesquisa
36.56%
The urban population in Ethiopia is increasing rapidly. If managed proactively, urban population growth presents a huge opportunity to shift the structure and location of economic activity from rural agriculture to the larger and more diversified urban industrial and service sectors. If not managed proactively, rapid urban population growth may pose a demographic challenge as cities struggle to provide jobs, infrastructure and services, and housing. The central challenge for the Ethiopian Government is to make sure that cities are attractive places in which to work and live, while fostering smart urbanization. Making urbanization a national priority will accelerate Ethiopia’s progress towards reaching middle-income status. The government has already taken steps to make evidence-based, informed decisions for well-managed urban growth, and this report aims to contribute to those efforts.

Urbanization and Growth : Commission on Growth and Development

Spence, Michael; Annez, Patricia Clarke; Buckley, Robert M.
Fonte: World Bank Publicador: World Bank
Tipo: Publications & Research :: Publication; Publications & Research :: Publication
ENGLISH
Relevância na Pesquisa
36.75%
Structural change is a key driver of rapid growth: countries diversify into new industries, firms learn new things, people move to new locations. Anything that slows this structural change is also likely to slow growth. Because urbanization is one of the most important enabling parallel processes in rapid growth, making it work well is critical. Urbanization's contribution to growth comes from two sources: the difference between rural and urban productivity levels and more rapid productivity change in cities. In the early decades of development, when the majority of the population is still rural, the jump from rural to urban employment makes a big contribution to growth. As cities grow larger, the second effect faster gains in urban productivity - begins to dominate, as it operates on a larger base. Mortgages can improve households' ability to buy decent housing. But finance relaxes demand constraints only. Unless it is accompanied by measures to increase supply, better finance may result in overshooting prices. This volatility can jeopardize macroeconomic stability. In a typical pattern...

Urbanization beyond Municipal Boundaries : Nurturing Metropolitan Economies and Connecting Peri-Urban Areas in India

World Bank
Fonte: Washington, DC: World Bank Publicador: Washington, DC: World Bank
Tipo: Publications & Research :: Publication; Publications & Research :: Publication
ENGLISH; EN_US
Relevância na Pesquisa
36.79%
The report is organized into three chapters: chapter two looks at the pace and patterns of India's urbanization, providing a 100-year perspective on demographic shifts and a 20-year perspective on the spatial distribution of jobs across India's portfolio of settlements. The review is based on a careful, spatially detailed analysis of data from economic and demographic censuses, annual surveys of industry, national sample surveys, and special surveys of freight transport. This chapter provides diagnostics on whether Indian industry is adequately exploiting agglomeration economies and whether there are hints of specific barriers to the natural tendency of standardized industry to reshuffle from large metropolitan areas to smaller urban areas. Chapter three examines specific policy issues and investment bottlenecks that are curbing the pace and benefits of urbanization in India. The policy issues relate to land markets and housing, connectivity (within and between cities), and access to basic services. The purpose of this analysis is to unravel the specific distortions that may be preventing India from reaping the entire range of benefits of urbanization. Chapter four provides some options for policy reform...

Firm Location and the Determinants of Exporting in Developing Countries

Farole, Thomas; Winkler, Deborah
Fonte: Banco Mundial Publicador: Banco Mundial
Tipo: Publications & Research :: Policy Research Working Paper
ENGLISH
Relevância na Pesquisa
36.58%
Using a cross-section of more than 40,000 manufacturing and services firms in 79 developing countries from the World Bank's Enterprise Surveys Database, this paper assesses how firm location determines the likelihood and extent of exporting in developing countries. Descriptive statistics confirm higher export participation (but not intensity) for firms in core versus non-core regions, despite the finding that firms in the core assess many aspects of the investment climate more negatively. Results from a probit model show that, in addition to firm-specific characteristics, both regional investment climate and agglomeration factors have a significant impact on export participation. Specifically, customs clearance and electricity quality matter for export participation for manufacturing firms. Although localization economies and export spillovers are associated with increased exporting, the opposite is found for urbanization economies for both manufacturing and services firms. The analysis finds that firm-level determinants of exporting matter more for firms located in non-core regions...

Urbanization and Productivity : Evidence from Turkish Provinces Over the Period 1980-2000

Coulibaly, Souleymane; Deichmann, Uwe; Lall, Somik
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Policy Research Working Paper; Publications & Research
ENGLISH
Relevância na Pesquisa
46.86%
Since the early 1980s, Turkey has been going through a rapid urbanization process at a pace beyond the World average. This paper aims at assessing the impact of this rapid urbanization process on the country's sector productivity. The authors built a database combining two-digit manufacturing data and some geographical, infrastructural, and socio-economic data collected at the provincial level by the Turkish State Institute of Statistics. The paper develops a parsimonious econometric relation linking sector productivity to accessibility, localization, and urbanization economies, proxying variables in the tradition of the New Economic Geography literature. The estimation results suggest that both localization and urbanization economies, as well as market accessibility, are productivity-enhancing factors in Turkey, although the causation link between productivity and these agglomeration measures is not clearly established. The sector-by-sector estimation confirms this result, although the localization economies effect is negative for the non-oil mineral sector...

Urban China : Toward Efficient, Inclusive, and Sustainable Urbanization

World Bank; Development Research Center of the State Council, the People’s Republic of China
Fonte: Washington, DC: World Bank Publicador: Washington, DC: World Bank
Tipo: Publications & Research :: Publication
EN_US
Relevância na Pesquisa
36.5%
In the last 30 years, China’s record economic growth lifted half a billion people out of poverty, with rapid urbanization providing abundant labor, cheap land, and good infrastructure. While China has avoided some of the common ills of urbanization, strains are showing as inefficient land development leads to urban sprawl and ghost towns, pollution threatens people’s health, and farmland and water resources are becoming scarce. With China’s urban population projected to rise to about one billion – or close to 70 percent of the country’s population – by 2030, China’s leaders are seeking a more coordinated urbanization process. Urban China is a joint research report by a team from the World Bank and the Development Research Center of China’s State Council which was established to address the challenges and opportunities of urbanization in China and to help China forge a new model of urbanization. The report takes as its point of departure the conviction that China's urbanization can become more efficient, inclusive, and sustainable. However, it stresses that achieving this vision will require strong support from both government and the markets for policy reforms in a number of area. The report proposes six main areas for reform: first...

Cote d’Ivoire Urbanization Review; Diversified Urbanization

World Bank
Fonte: Washington, DC Publicador: Washington, DC
Tipo: Report; Economic & Sector Work :: Other Urban Study; Economic & Sector Work
ENGLISH; EN_US
Relevância na Pesquisa
46.96%
Well-managed urbanization can accelerate Cote d’Ivoire’s ascendance to middle incomes. Such a large gap in gross national income (GNI) per capita means that the underlining economic drivers of urbanization are not being fully harnessed in Cote d’Ivoire. Small cities at low urbanization level facilitate internal scale economies, such as hosting a large firm transforming local agricultural products. Secondary cities at intermediate urbanization level facilitate localization economies by enabling linkages between firms operating in the same sector. Large cities at advanced urbanization level facilitate urbanization economies through a diverse economic base nurturing innovation. Drawing on the findings of the World Development Report 2009 applied to the Ivorian context, the authors identify three types of cities in the country: global connector cities generating urbanization economies needed for innovation, increasing return to scale activities, and global competitiveness; regional connector cities generating localization economies needed for efficient regional trade and transport; and domestic connector cities generating internal scale economies needed to unleash the agricultural potential of regions. Cote d’Ivoire’s small cities and market towns can be anchors generating scale economies for agribusiness. While southwest regions strongly contribute to the production and export of cash crops...

Vietnam Urbanization Review : Technical Assistance Report

World Bank
Fonte: World Bank Publicador: World Bank
Tipo: Economic & Sector Work :: Other Urban Study
ENGLISH
Relevância na Pesquisa
36.67%
As Vietnam enters a crucial period of urbanization corresponding to its present stage of economic development, the Government of Vietnam has placed strong emphasis on developing its system of cities. In accordance with this objective this Urbanization Review is dedicated to understanding the key dimensions and aspects of Vietnam's urbanization process and to identifying trends, opportunities, challenges and core policy priorities that the government will need to address in order to realize its objective. The Vietnam Urbanization Review was prepared following extensive consultations with various stakeholders, including officials from national and local government, private sector groups and international and bilateral organizations active in development assistance in the urban sector in Vietnam. It builds on a strong portfolio of World Bank engagements in investment and policy lending to the Government of Vietnam. It also builds on a number of more in-depth studies that were commissioned specifically for the Vietnam urbanization review.

Urbanization without Growth : A Not-So-Uncommon Phenomenon

Fay, Marianne; Opal, Charlotte
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research; Publications & Research :: Policy Research Working Paper
EN_US
Relevância na Pesquisa
36.58%
To find out why African countries' experience with urbanization and sustained growth appeared to differ from that of other countries, the authors investigated the determinants of urbanization across countries over 40 years. Rather than studying individuals' decisions to migrate, they relied on macroeconomic data and cross-country comparisons. A central hypothesis of their study: that individuals move (with varying degrees of ease) in response to economic incentives and opportunities. If location incentives are distorted, so is growth. The authors find that urbanization levels are closely correlated with levels of income. But urbanization continues even during periods of negative growth, carried by its own momentum, largely a function of the level of urbanization. From that viewpoint, Africa's urbanization without growth is not a puzzle. Factors other than income that help predict differences in levels of urbanization across countries include: a) income structure; b) education; c) rural-urban wage differentials; d) ethnic tensions; and e) civil disturbances. In addition, the relationship between economic incentives and urbanization is weaker in countries with fewer civil or political liberties. Factors other than initial urbanization level that help explain the speed of urbanization include: 1) The sector from which income growth is derived; 2) ethnic tensions; 3) civil disturbances and democracy (these two slow the pace of urbanization if all else is constant); 4) rural-urban wage differentials...

Urbanization and (In)Formalization

Ghani, Ejaz; Kanbur, Ravi
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Policy Research Working Paper; Publications & Research
ENGLISH; EN_US
Relevância na Pesquisa
36.51%
Two of the great stylized predictions of development theory, and two of the great expectations of policy makers as indicators of progress in development, are inexorable urbanization and inexorable formalization. Urbanization is indeed happening, beyond the "tipping point" where half the world's population is now urban. However, formalization has slowed down significantly in the past quarter century. Indeed, informality has been increasing. This disconnect raises a number of questions for development analysis and development policy. Is the link between urbanization and formalization more complex than what had been thought? What does this mean for policy? The first core section of this paper asks what exactly is meant by formality and informality. The second core section turns to processes of urbanization and asks how these processes intersect with and interact with the incentives to formalize. The paper examines why cities attract the informal sector and the role that urbanization plays in growth and job creation through both the formal and informal sectors. Cities generate agglomeration benefits in the informal sector...

Harnessing Urbanization to End Poverty and Boost Prosperity in Africa

World Bank
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Working Paper; Publications & Research
ENGLISH; EN_US
Relevância na Pesquisa
36.69%
Urbanization is the single most important transformation that the African continent will undergo this century. More than half of Africa's population will live in its cities by 2040. In the face of rapid urbanization, there is a narrow window of opportunity to harness the potential of cities as engines of economic growth, and use this as a powerful leverage to achieve sustainable development and poverty reduction. Despite its rapid urban growth, Africa is less than halfway through the urbanization process and in some countries, a large number of people reside in rural areas. Rapid urbanization, if well managed, can curb urban sprawl, deteriorating access to services, greater inequality, and increased crime. The concentration of people in cities also elevates the risks and costs associated with extreme weather and natural disasters resulting from climate change. The World Bank Group's (WBGs) support will focus on three key areas: metropolitan areas and large cities; secondary and tertiary cities; and informal settlements. This will include both multi-sectoral investment programs that integrate a basket of services (for example...

Urbanization and the Geography of Development

Henderson, J. Vernon
Fonte: World Bank, Washington, DC Publicador: World Bank, Washington, DC
Tipo: Publications & Research :: Working Paper; Publications & Research
ENGLISH; EN_US
Relevância na Pesquisa
36.69%
This paper focuses on several interrelated key questions on the geography of development. Although we herald cities with their industrial bases as 'engines of growth,' does industrialization in fact drive urbanization?1 What economic activities do cities of different sizes undertake? Does this change as countries develop? If so, what are the policy implications? Do development policies have a big-city bias? If so, what does this imply for growth and inequality, and what are appropriate place-based policies? Should countries have policies concerning optimal city sizes or city-size distributions? Urbanization is central to the development process. Employment shifts out of agriculture into industry, and industrial production proceeds most effectively in cities, with their agglomeration economies. Cities are thus viewed as engines of growth. While such relationships appear in the data, the process is not straightforward. Among developing countries, changes in income or industrialization correlate only weakly with changes in urbanization. This suggests that policy and institutional factors may also influence the urbanization process...

What underlies localization and urbanization economies? Evidence from the location of new firms

Marín-López, Raquel; Jofre Monseny, Jordi; Viladecans Marsal, Elisabet
Fonte: Xarxa de Referència en Economia Aplicada (XREAP) Publicador: Xarxa de Referència en Economia Aplicada (XREAP)
Tipo: Trabalho em Andamento Formato: application/pdf
Publicado em //2012 ENG
Relevância na Pesquisa
46.71%
The objective of this paper is to analyze why firms in some industries locate in specialized economic environments (localization economies) while those in other industries prefer large city locations (urbanization economies). To this end, we examine the location decisions of new manufacturing firms in Spain at the city level and for narrowly defined industries (three-digit level). First, we estimate firm location models to obtain estimates that reflect the importance of localization and urbanization economies in each industry. In a second step, we regress these estimates on industry characteristics that are related to the potential importance of three agglomeration theories, namely, labor market pooling, input sharing and knowledge spillovers. Localization effects are low and urbanization effects are high in knowledge-intensive industries, suggesting that firms (partly) locate in large cities to reap the benefits of inter-industry knowledge spillovers. We also find that localization effects are high in industries that employ workers whose skills are more industry-specific, suggesting that industries (partly) locate in specialized economic environments to share a common pool of specialized workers.