Why cities are regarded as productive engines of growth? Topic 4 P3

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Chuyển đổi dữ liệu10.06.2022
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  1. Why cities are regarded as productive engines of growth?

Topic 4_P3

  • Economic forces are seen as the most powerful of urbanising forces that strengthen the tendency for both individuals and firms to favour urban concentration:

  • to individuals, cities offer a wide range of products, services and amenities which would be unobtainable elsewhere,

  • firms, in turn, locate in or close to urban areas to reap the benefits of internal production efficiency gains, access to a large pool of workers and suppliers, and the existence of a favourable business environment

  • Since the economic resources are limited in quantity and vary in quality, the decisions to allocate them among competing uses are taken to achieve the highest possible level of economic efficiency.

  • This is the natural consequences of economic forces which, through market mechanisms, are capable of providing the most efficient economic outcomes

  1. Why does productivity/utility matter in spatial dimension?

Topic 4_P4

  • Urban areas are more efficient at generating economic product than rural ones,

  • The spatially uneven growth is explained as the result of different factor productivity levels which are mostly influenced by city size, and more precisely, by the size of the market,

  • This happens as cities bring economies of scale, boost markets, create jobs and provide fertile conditions for new economic activities to flourish.

  • In fact, people tend to move to the cities because they offer real opportunities for a better and more prosperous life,

  • Individuals and firms search for spatial proximity because they want to interact for plenty numerous of economic and social reasons - the so-called “pull motives”.

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