NETWORKS OF CITIES AND GROWTH: THEORY, NETWORK IDENTIFICATION AND MEASUREMENT OF THE NETWORK EXTERNALITY

Abstract: Traditional regional and urban economics emphasize the relevance of agglomeration on economic growth. The concept of "agglomeration economies " explains the existence of advantages derived from the concentration of population and activity. However, it does not explain the existence of external economies that are spatially dynamic. Network economies generated in networks of cities correspond to this last type, since they are generated from the interaction between urban units linked by a network relationship. A strong implication arises from this hypothesis: networks of cities generate network economies that influence urban growth. Therefore, concentration is not the only way to generate externalities that influences economic growth. The objectives of this paper are to introduce the theory of the networks of cities and to explain the relationship between them, external economies and economic growth. The text is divided in four parts. First, there is an introduction to the paradigm of the networks of cities (theoretical concepts; network of cities and economic growth and network policies). Second, some examples of networks of cities are provided (Piedmont and Lombardy; Randstad; Kansai; France). Third part introduces the case of Catalonia, where networks of cities have been intensely studied, networks advantages measured and policy strategies proposed. Finally, conclusions and implications are exposed.