Growth in Cities

Recent theories of economic growth, including those of P. Romer (1986, 1990), M. Porter (1990), and J. Jacobs (1969, 1984), have stressed the role of technological spillovers in generating growth. Because such knowledge spillovers are particularly effective in cities, where communication between people is more extensive, data on the growth of industries in different cities allow the authors to test some of these theories. Using a new data set on the growth of large industries in 170 U.S. cities between 1956 and 1987, they find that local competition and urban variety, but not regional specialization, encourage employment growth in industries. The evidence suggests that important knowledge spillovers might occur between rather than within industries. Copyright 1992 by University of Chicago Press.