Agglomeration Economies in Developing Countries : A Meta-Analysis
Recent empirical work suggests that there are large agglomeration gains from working and living in developing country cities. These estimates find that doubling city size is associated with an increase in productivity by 19 percent in China, 12 per...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/749721626709072349/Agglomeration-Economies-in-Developing-Countries-A-Meta-Analysis http://hdl.handle.net/10986/36003 |
| Summary: | Recent empirical work suggests that
there are large agglomeration gains from working and living
in developing country cities. These estimates find that
doubling city size is associated with an increase in
productivity by 19 percent in China, 12 percent in India,
and 17 percent in Africa. These agglomeration benefits are
considerably higher relative to developed country cities,
which are in the range of 4 to 6 percent. However, many
developing country cities are costly, crowded, and
disconnected, and face slow structural transformation. To
understand the true productivity advantages of cities in
developing countries, this paper systematically evaluates
more than 1,200 elasticity estimates from 70 studies in 33
countries. Using a frontier methodology for conducting
meta-analysis, it finds that the elasticity estimates in
developing countries are at most 1 percentage point higher
than in advanced economies, but not significantly so. The
paper provides novel estimates of the elasticity of
pollution, homicide, and congestion, using a large sample of
developing and developed country cities. No evidence is
found for productivity gains in light of the high and
increasing costs of working in developing country cities. |
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