What drives people and firms to urban areas?

More than three quarters of the world’s economic activity is concentrated in cities. But what drives people and firms to agglomerate in urban areas? Sergiy Protsiv, researcher at the Stockholm School of Economics, finds out in his dissertation.

“Clearly, some places may offer inherent benefits due to the location itself, such as a mild climate or the presence of natural harbours, but that does not tell the whole story”, says Sergiy Protsiv.

Rather urban areas also offer spaces for interaction among people and firms as well as the proximity to potential partners, customers, and competitors, which could have a significant impact on the appeal of a location for a firm.

Using multiple novel methods based on a unique detailed geographical dataset, Sergiy Protsiv’s dissertation explores how a location’s attractiveness is impacted by the presence of nearby firms.

Protsiv explores the influence of the density of economic activity on wages at a given location and attempts to disentangle the separate mechanisms that could be at work.

Further topics include the location patterns of foreign-owned firms and more specifically whether foreign-owned firms are more influenced by agglomeration benefits than domestic firms.

The results of Sergiy Protsiv’s studies make significant contributions to empirical research both in economic geography and international business. The results could also be of interest for practitioners as the importance of location decisions is further reinforced, as well as for policymakers as the analyses explore not only the benefits but also the detriments of agglomeration.

For more information, please contact:
Sergiy Protsiv, +46-8-736 9511, Sergiy.Protsiv@hhs.se

The dissertation ‘Attraction and Repulsion: Modelling Interfirm Interactions in Geographical Space’ can be ordered in book form by SSE EFI at EFI.publications@hhs.se

Sergiy Protsiv is a researcher at the Center for Strategy and Competitiveness at the Stockholm School of Economics. He participated in several projects on clusters and regional development, most notably the European Cluster Observatory.