"Urbanization and growth"

Bertinelli, Luisito ; Black, Duncan

Abstract
In a simple urban economics framework, we aim at highlighting how the trade-
off between optimal and equilibrium city size behaves when introducing dynamic
human capital externalities beside the classical congestion externalities. Our
purpose is to show that there are dynamic gains from oversized cities. To this
end, we assume that productivity depends on human capital, which is solely
accumulated in cities, such that urbanization is the engine of growth. In an
empirical illustration, we highlight the link between urbanization and human
capital accumulation, by focusing on cross-country panel data.

Document type : Document de travail (Working Paper)

Référence bibliographique
Bertinelli, Luisito ; Black, Duncan. Urbanization and growth. CORE Discussion Papers ;
2002/44 (2002)

Available at:
http://hdl.handle.net/2078.1/4288
[Downloaded 2018/06/28 at 15:00:47 ]
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 (1) (2) (3) (4) (5)

Fixed effects

Fixed effects

Fixed effects

Fixed effects

Fixed effects
GMM

GMM

GMM

GMM

GMM
urbanization 0.60* 0.91*** 0.73* 0.97*** -2.02*** -1.66** 1.39*** 0.79** 1.09*** 0.43
(0.37) (0.304) (0.39) (0.379) (0.42) (0.675) (0.28) (0.378) (0.25) (0.400)
human -0.22*** -0.31*** -0.37*** -0.41*** -0.45*** -0.45*** -0.64*** -0.67*** -0.74*** -0.71***
capital (0.04) (0.031) (0.03) (0.035) (0.02) (0.035) (0.06) (0.084) (0.03) (0.084)
Log (GDP/capita) 0.32*** 0.22*** 0.06 0.19*** 0.28*** 0.21*** 0.25*** 0.19***
(0.07) (0.055) (0.06) (0.054) (0.05) (0.054) (0.05) (0.055)
Log (life -0.90*** -1.61*** -0.30 -0.817** -0.45** -1.15*** -0.49*** -0.96**
expectancy) (0.27) (0.384) (0.24) (0.413) (0.22) (0.401) (0.19) (0.406)
(urbanization)2 3.41*** 2.77***
(0.44) (0.596)
urbanization™ 0.35*** 0.41*** 0.60*** 0.68***
human capital (0.09) (0.115) (0.07) (0.154)
urbanization™ -0.03*** -0.04***
(human capital)2 (0.004) (0.017)
Time dum. Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes
Sargan test 31.19 40.56 55.70 59.76 67.05
[d.f.; p-value] [24;0.2] [36;0.3] [48;0.2] [48;0.1] [60;0.3]

1st order serial corr. -3.02*** -2.78*** -2.8*** -2.86*** -2.85***

[0.003] [0.005] [0.005] [0.004] [0.004]
nd -0.782 -0.913 -0.698 -0.860 -0.744
2 order serial corr.
[0.434] [0.361] [0.485] [0.390] [0.457]
2 0.25 0.29 0.32 0.31 0.32
R within
# obs. 400 659 400 615 400 615 400 615 400 615

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