Why investing more in the capital can lead to less growth

Bibliographic Data

ID12913638
AuthorsLewis Dijkstra (0000-0002-4077-8250, corresponding author)
Year2013
Volume6
Issue2
Pages251-268
Publication date2013-05-14
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueCambridge Journal of Regions Economy and Society (JOURNAL)
Journal identifiersISSN: 1752-1386 • E-ISSN: 1752-1378
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1093/cjres/rst009
OpenAlexW2074012638
LanguageEN
Citations received7
References cited11

This article argues that investing in a wide range of city sizes, or a portfolio of places, can be more conducive to growth than primarily investing in the largest city. A range of cities allows each firm to find its optimal city. This reduces the needed size of cities and thus congestion costs. Less-developed European Union Member States have large and growing productivity gaps between their capitals compared with the rest of the country. More-developed Member States have much smaller productivity gaps. Therefore, growth in the second-tier cities in less-developed Member States is likely to outpace growth in the capital in the medium term, yet public investment may be too focused on the capital city. Copyright 2013, Oxford University Press

Business · Capital (architecture · Economics · Geography · Lead (geology · Monetary economics · Natural resource economics · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Regional Development and Policy · Geology

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