Relationship between Ecoomics Growth, Urban Concentration and Trade: Evidence from Asia-Pacific

One of the most important aspects of urban development is the case which is explained by urban concentration. Urban concentration is in association with the fact that how and what extent resources spread in existing cities. Indeed, urban concentration shows whether resources are over-concentrated in one or some large cities or spread too evenly across different cities. There is a significant relationship between economic growth and the degree of urban concentration, as measured by primacy or the share of the largest city in an urban system. Urbanization and economic growth in developing countries go hand-in-hand. In accordance to urban economic theories, there is an inverse-U shape relationship between urban concentration –urban primacyand economic growth. That is, as economy grows, urban concentration increases, approaches an optimal level and then declines. If distortion from the optimal level is happened, it can lead economic growth to reduce. Some countries have significantly excessive primacy and some have too little. Additionally, trade is one of the key factors that can affect urban concentration. In this study, urban primacy of some selected Asia- Pacific countries is computed and its effect on economic growth is tested using Solow-Swan growth model. It also looks at the determinants of primacy and policy instruments that might be effective in reducing excessive primacy. Results show that primacy has significant effect on economic growth. Moreover, as trade influences primacy, it can be thus considered as an effective policy instrument in controlling urban over-concentration. JEL code: F43, O18

کلیدواژه ها:

Urban Concentration ، Economic Growth ، Trade ، Asia-Pacific.