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Title: Agglomeration and Growth: Cross-Country Evidence

Author(s): Marius Br�lhart and Federica Sbergami

Publication Date: August 2008

Keyword(s): agglomeration, dynamic panel estimation, economic growth and urbanisation

Programme Area(s): International Trade and Regional Economics

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.

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Bibliographic Reference

Br�lhart, M and Sbergami, F. 2008. 'Agglomeration and Growth: Cross-Country Evidence'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=6941