Template-type: ReDIF-Paper 1.0
Author-Name: Bluhm, Richard
Author-Email: bluhm@mak.uni-hannover.de
Author-Workplace-Name: UNU-MERIT, Maastricht University, and Leibniz University Hannover,
	 Institute of Macroeconomics
Author-Name: Lessmann, Christian
Author-Email: christian.lessmann@tu-dresden.de
Author-Workplace-Name: Technische Universität Dresden, Ifo Institute for Economic Research,
	and CESifo Munich
Author-Name: Schaudt, Paul
Author-Email: paul.schaudt@unisg.ch
Author-Workplace-Name: University of St. Gallen, Department of Economics
Title: The political geography of cities
Abstract: We study the link between subnational capital cities and urban development
	 using a global data set of hundreds of first-order administrative and capital
	 city reforms from 1987 until 2018. We show that gaining subnational capital
	 status has a sizable effect on city growth in the medium run. We provide
	 new evidence that the effect of these reforms depends on locational
	 fundamentals, such as market access, and that the effect is greater in
	 countries where urbanization and industrialization occurred later.
	 Consistent with both an influx of public investments and a private
	 response of individuals and firms, we document that urban built-up,
	 population, foreign aid, infrastructure, and foreign direct investment
	 in several sectors increase once cities become subnational capitals.
Classification-JEL: H10, R11, R12, O1
Keywords: capital cities, administrative reforms, economic geography, urban primacy
Series: UNU-MERIT Working Papers
Creation-Date: 20211020
Number: 2021-039
File-URL: https://unu-merit.nl/publications/wppdf/2021/wp2021-039.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2021039