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Journal of Economic Geography Advance Access originally published online on October 29, 2008
Journal of Economic Geography 2009 9(1):85-115; doi:10.1093/jeg/lbn044
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© The Author (2008). Published by Oxford University Press. All rights reserved. For Permissions, please email: journals.permissions@oxfordjournals.org

Urban growth drivers in a Europe of sticky people and implicit boundaries

Paul Cheshire* and Stefano Magrini**

*Department of Geography & Environment, London School of Economics, Houghton St, London WC2A 2AE, UK. email <p.cheshire{at}lse.ac.uk>
**Department of Economics, University of Venice and SSAV (School for Advanced Studies in Venice), Venice, Italy. email <s.magrini{at}unive.it>

JEL classifications: H41, H73, O18, R11, R50

We investigate urban GDP per capita growth across the EU12 using data for functionally defined cities—rather than administrative regions. We test hypotheses on the role of human capital, EU integration and fragmentation of urban government and explore spatial dependence and mechanisms of spatial interaction. Results are acceptable on standard econometric tests without measures of spatial interaction but there is spatial dependence. If variables reflecting spatial adjustment are included, they are statistically significant and eliminate spatial dependence. Not only do the results now provide consistent estimates of parameters, but they also support relevant theoretical insights and show national borders are still significant barriers to economic adjustment. People in Europe are sticky so it is unreasonable to assume spatial disparities will disappear. Our findings also imply that cities in Europe form national rather than a single continental system.

Keywords: growth, cities, local public goods, spatial adjustment, local economic growth
Date submitted: 31 October 2007     Date accepted: 2 October 2008


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