Does Regional Economic Growth Depend on Proximity to Urban Centres?

This paper analyses the spatial patterns of regional economic growth in Europe over the 1995 to 2010 period. It finds that regions, which contain large urban agglomerations, have been growing significantly faster than those that do not. Furthermore, proximity to large urban agglomerations has been positively correlated to economic growth. Halving travel time to a large urban agglomeration is associated with a 0.2 to 0.4 percentage points increase in annual per capita growth. More generally, the study also shows that measures of population density are positively correlated to growth. Among the different measures, by far the best predictor of growth between 1995 and 2010 is the maximum population density of a region.