The shrinking advantage of market potential

• 成果类型: Article
• 署名作者: Brulhart, Marius; Desmet, Klaus; Klinke, Gian-Paolo
• 署名单位: University of Lausanne; Southern Methodist University; Southern Methodist University; National Bureau of Economic Research; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2020.102529
• 发表日期: 2020
• 关键词: Regional growth; Market potential; structural transformation; Economic development

摘要

How does a country's economic geography evolve along the development path? This paper documents recent employment growth in 18,961 regions in eight of the world's main economies. Overall, market potential is losing importance as a correlate of local growth, while local employment density is gaining importance. In mature economies, growth is strongest in low-market-potential areas. In emerging economies, the opposite is true, though the association with market potential is also weakening there. Structural transformation away from agriculture can account for some of the observed changes. The part left unexplained by structural transformation is consistent with a standard economic geography model that yields a bell-shaped relation between trade costs and the growth of centrally located regions.