Jason tam

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Jason tam

  1. 1. Jason Tam
  2. 2.  Cluster of firms  Productivity gains  Lower transport cost  Studies by Kawashima (1975) , Sveikauskas (1975), Segal (1976), Forgarty and Garofalo (1978) and Moomaw (1981, 1985)  Positive effect of city size on labour productivity levels
  3. 3.  Industries found higher density areas more productive than lower density areas. Why?  Allowed workers to develop skills over time  Wages increase  More incentive
  4. 4.  Higher education levels & better amenities  First class medical facilities  Sporting facilities  Good public transport system  Better roads  Good schools, universities
  5. 5.  Knowledge spillover effect (Porter 1990)  An exchange of ideas among individuals  Stimulates growth in specialised and geographically concentrated industries  Local competition good for agglomeration economy  Innovation!  Maximised in cities where industries are centralised and geographically specialised and competitive
  6. 6.  Traffic congestions  Loss of productivity  Eg. Los Angeles & Beijing
  7. 7.  Spillover effect  When a government makes decisions to the benefit of its own city but causes a negative externality to a neighbouring city  Emeryville, California
  8. 8.  Pollution  Air, Water, Ground  Developing countries  Health issues
  9. 9.  Agglomeration is a natural phenomena & unavoidable  Often viewed as successful because advantages outweigh disadvantages  In my view, for agglomerations to work:  People allowed to reap full benefits of advantages  Government to manage negative externalities  Beneficial to economy of agglomeration

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