Knowledge externalities and networks of cities in creative metropolis : the case of the metropolitan region of Barcelona

Cities and metropolitan areas are our main engine of production and development. They have long concentrated and coordinated the use of urbanized land, labor and capital. Metropolitan areas produce, process, exchange and market the main amount of knowledge and creativity in the world. At the same time they generate agglomeration economies and obtain spatially mobile network economies from their links with other cities. Departing from the fact that metropolitan growth is the sum of the growth of the cities that form the metropolitan area, the present research explores why some metropolitan cities grow faster than others. The hypothesis is that the differential growth of the metropolitan cities is related to the existence of external economies within and between cities many of which arises from knowledge and creativity. The objective of the research is to understand and model how the external economies affect the intrametropolitan urban growth with special attention to the effects of knowledge and creativity and their transmission across the metropolitan urban system. The text is divided in five sections. After the introduction, section two explains the traditional paradigm of the agglomeration economies enhanced with a separate treatment of the knowledge and creativity externalities, and the introduction of a spatial (inter-cities) dimension of externalities and knowledge. Section three introduces an econometric model to evaluate the effects of dynamic externalities in time and space on the urban growth, as well as the sources of data and variable definitions. Section four explains the results of estimates which provide evidence on the existence of localization, urbanization, knowledge and creativity externalities and their diffusion across the urban system through complex network patterns. Knowledge transmission through hierarchical networks of cities produces the most important effect on urban growth and goes beyond the impact of agglomeration economies and diffusion in physical proximity or in horizontal networks. This result suggests that in metropolitan environments, where the network of cities is hard dense and all the socio-economic dimensions of proximity short, the impact of the knowledge metropolitan spillovers can be bigger than the local ones. Section five presents the conclusion and a discussion on policy implications