GVC / City-REDI Seminar Series: Emmanouil Tranos

'Ubiquitous digital technologies and spatial structure: a preliminary analysis'

Speakers: Emmanouil Tranos (University of Birmingham), Yannis Ioannides (Tufts University)

Abstract

This paper sheds light on the potential effect that Information and Communication Technologies (ICT) might generate on urban structure. The extensive theoretical discussions and speculations on how cities and geography might be affected by digital technologies, which took place before the actual adoption of such technologies, have not been coupled by in depth empirical analysis to verify early predictions. The few examples of such studies, which approached such research questions both analytically and empirically, were insightful, but their results were to a certain extend contradictory. Most importantly, these studies took place before digital technologies such as the Internet had matured. Nowadays, these technologies have been adopted widely and we are thus in a better position to approach empirically such a research question and quantify the relation between ICTs and urban structure.

In order to assess these effects, this paper adopts a global perspective and estimates the Zipf coefficient for a number of countries over the course 15 years. Then, at a second stage, using a 2SLS framework, this paper estimates the causal effect Internet and other digital technologies penetration rates have on the Zipf coefficient after controlling for a number of other variables. The IV approach is necessary here in order to address the potentially endogenous relation between urban structure and digital technology penetration. The estimations and the subsequent sensitivity signify a rather robust causal relationship according to which the Internet and other digital technologies further enforce agglomeration economies.

However, the above results are based on the UN urban agglomeration data and therefore only reflect the effect on urban agglomerations above 300.000 habitants. The next stage of this papers aims to overcome this limitation by focusing on specific countries and assess whether the global pattern observed for the large agglomeration is also valid for smaller cities and towns.