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The impact of urban con centration on countries’ competitiveness and entrepreneurial performance

Harvard Dataverse (Africa Rice Center, Bioversity International, CCAFS, CIAT, IFPRI, IRRI and WorldFish)

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Title The impact of urban con centration on countries’ competitiveness and entrepreneurial performance
 
Identifier https://doi.org/10.7910/DVN/BH9CNF
 
Creator ÉVA, KOMLÓSI
BALÁZS, PÁGER
 
Publisher Harvard Dataverse
 
Description This paper aims to elaborate the role of Jacobs-type of agglomeration effects on countries’ competitiveness and entrepreneurial performance. Our research allows for a better understanding of the relationship that exists between a coun
try’s urban system, characterized by spatial agglomeration (concentration) or deglomeration (deconcentration) processes, and its competitiveness and entrepreneurial performance. Urbanization economies refer to considerable cost savings generated through the locating together of people, firms and organi
zations across different industries. It has recently become an axiom that the better performance of global cities (as they are important nodes of innovation and creativity) is derived from agglomeration effects. This general assumption follows that the more concentrated an urban system of a country, the more competitive and better its entrepreneurial performance. Even though this notion has gained quick and ardent acceptance from practitioners, the related literature shows contradictory results;this has induced a heated debate in academic circles, because it has raised serious
doubts about the “bigger is better” theory. We hope to contribute to this debate with our detailed analysis. To understand the impact of urban concentration, we selected 70 countries and calculated the so-called ROXY Index measuring the degree of agglomeration or deglomeration in their urban systems. To exemplify country-level competitiveness, we applied the Global Competitiveness Index (GCI) while the Global Entrepreneurship and Development Index (GEDI) was used to demonstrate country level entrepreneurial performance. Using these indexes correlation and cluster analysis were designed to obtain understanding of the relationship between them.
Our analysis indicates that as urban concentration initially increases competitiveness,
entrepreneurial performance also increases, but at a decreasing rate. Both of them
eventually reaches a maximum, and then after a certain point decrease with further
concentration. Therefore, the curve for this relationship is non-linear and folds back. This indicates that over- or under-concentration of the population within an urban system does not necessarily result in a better outcome. However, we should consider that a high concentration of population is only one important factor for competitiveness and entrepreneurial performance while other effects may exist.
 
Subject Social Sciences
urbanization economies, entrepreneursh ip, competitiveness, spatial cycles, ROXY Index
 
Contributor Toth, Geza