Urban Agglomeration and Economic Growth in Latin America

Transcription

1 Urban Agglomeration and Economic Growth in Latin America Miguel Atienza and Patricio Aroca y paroca@ucn.cl, Universidad Católica del Norte, CHILE International Urban Economic Modeling Workshop at University of Sao Paulo Sao Paulo, July 10, 2012

2 MOTIVATION

3 Chilean Development Economic Model Open Market Promote Export Policy Macroeconomic Stability

4 PRODUCT DIVERSIFICATION ( ) 6000 EVOLUTION OF NUMBER OF EXPORT PRODUCTS

5 EXPORTER DIVERSIFICATION DE ( ) 9000 EVOLUTION OF NUMBER OF FIRMS INVOLVED IN DIRECT EXPORTS

6 MARKET DIVERSIFICATION ( ) 210 EVOLUTION OF NUMBER MARKETS WHERE CHILEAN EXPORTS GO

7 Main explanation Reduction on the TFP growth There is not spatial consideration on the evaluation What about concentration around the main metropolitan area?

8 45% Share of Population Living at Santiago 40% 35% y = x R² = % 1987 Participación RM 25% 20% % RM Lineal (% RM) 15% 10% 5% 0% Años

9 Concentration and Growth Concentration Trade off between efficiency and equity Inefficient Spatial Concentration Dominant paradigm Williamson, 1965 GDP pc

10 From New Economic Geography or NECG Concentration and Growth reinforce each other (Fujita y Thisse, 2002) Spatial Concentration induce more growth and vice versa (Baldwin y Martin, 2004) Concentration reinforce growth => the more concentrated is the economy the higher the growth (Martin y Ottaviano, 1999) Martin, P. and G. Ottaviano (1999). Growing locations: Industry location in a model of endogenous growth. European Economic Review 43 (2), Fujita, M. and J-F. Thisse (2002). Economics of Agglomeration: Cities, Industrial Location, and Regional Growth. Cambridge University Press. Baldwin, R. E. y P. Martin (2004). Agglomeration and regional growth. In: Henderson, V. J. and J-F. Thisse (Eds.), Handbook of Regional and Urban Economics, vol. 4: Cities and Geography. Elsevier, North-Holland.

11 2011

12 How much growth cost the current concentration?

13 Take more advantage of regional assets Concentration might cost 1 to 1.5 point of growth per year

14 Hypothesis: Concentration and Growth Concentration Latin American Countries More developed countries African and less developed countries Williamson, 1965 GDP pc

15 Empirical results

16 Wheaton, W. y Shishido, H. (1981). Urban concentration, agglomeration economies, and the level of economic development. Economic Development and Cultural Change, 30, MacKellar, F.L. y D.R. Vining (1995). Population Concentration in Less Development Countris: New Evidence. Papers in Regional Science, 74, 3, Moomaw, R.L. y M.A. Alwosabi (2004). An empirical analysis of competing explanations of urban primacy evidence from Asia and the Americas. Annals of Regional Science, 38,

17 Concentration and Growth Concentration Williamson, 1965 GDP pc

18 GDP pc and Concentration Wheaton y Shishido (1981) -> US$ 2000 MacKellar y Vining (1995) -> US$ 5000 (US$ of 1985, US$ 8384 in US$ of 2006

19 2009

20 Urban Concentration effect on Growth d(crecimiento)/d(urban750) Equivalente a US$ log(pib per cápita) Adaptación Figura 3 de Brülhart y Sbergami, 2009

21 Concentration and Growth Fuente:Brülhart y Sbergami, 2009.

22 Concentration and Growth Fuente:Brülhart y Sbergami, 2009.

23 Evolution

24 80.0% Primacy Index 750 versus GDPpc for 1960 (85 Countries) 70.0% 60.0% 50.0% Uruguay Argentina 40.0% Chile Venezuela 30.0% ColombiaBrazil Paraguay Peru 20.0% Ecuador Bolivia 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

25 80.0% Primacy Index 750 versus GDPpc for 1970 (85 Countries) 70.0% 60.0% 50.0% Uruguay Argentina 40.0% Chile Venezuela 30.0% 20.0% Colombia Brazil Peru Paraguay Ecuador Bolivia 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

26 80.0% Primacy Index 750 versus GDPpc for 1980 (85 Countries) 70.0% 60.0% 50.0% Chile Uruguay Argentina 40.0% Korea Colombia Venezuela Brazil Portugal 30.0% Peru Paraguay Ecuador Bolivia 20.0% 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

27 80.0% Primacy Index 750 versus GDPpc for 1990 (85 Countries) 70.0% 60.0% 50.0% Uruguay Argentina Chile Korea 40.0% 30.0% Brazil Colombia Venezuela Peru Paraguay Ecuador Bolivia Portugal 20.0% 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

28 80.0% Primacy Index 750 versus GDPpc for 2000 (85 Countries) 70.0% 60.0% Korea 50.0% 40.0% 30.0% Uruguay Argentina Chile Brazil Colombia Venezuela Peru Bolivia Paraguay Ecuador Portugal 20.0% 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

29 80.0% Primacy Index 750 versus GDPpc for 2010 (85 Countries) 70.0% 60.0% Korea 50.0% 40.0% 30.0% Uruguay Argentina Chile Colombia Brazil Venezuela Bolivia Peru Paraguay Ecuador Portugal 20.0% 10.0% 0.0% - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

30 CHALLENGES & CONCLUSION

31 Urban Agglomeration and Economic Growth in Latin America Miguel Atienza and Patricio Aroca y paroca@ucn.cl, Universidad Católica del Norte, CHILE International Urban Economic Modeling Workshop at University of Sao Paulo Sao Paulo, July 10, 2012