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Systematisation of factors behind the agglomeration effect


Yuriy V. Pavlov, Samara State University of Economics, Samara, Russia


Urban agglomerations are increasing their role in Russia and across the world’s economies, and understanding of the factors behind the effect of these settlement systems is essential for their efficient management. The paper studies the essence of agglomeration and the effects generated by its functioning on the basis of the literature review with respect to identifying, describing, grouping and typifying the factors of agglomeration economies. Spatial economics constitutes the methodological basis of the research; the author applies methods of analysis, synthesis, grouping, and classification. The author presents own definition of agglomeration synthesised allowing for the two main attributes of this phenomenon: concentration and interaction; suggests a classification of factors behind the agglomeration effect that include localisation, urbanisation, settlement and deagglomeration effects, economies of scale, institutional factors. For the economies of scale, localisation and urbanisation effects the author constructs a typology consisting of 25 factors, which may underlie further quantitative research. The auhtor decomposes urbanisation effect into three subgroups: the impact of the economic development, diversification, population quantity and quality. Such characteristic reflects the complex composition of this effect and helps to avoid excessive simplification during its measurement. The researcher proposes a new group of factors, which takes into account the influence of the settlement system. The results can become a theoretical basis for further practical research into the decision-making on enhancing the competitiveness of firms, industries, and economy in general and be useful for quantitative measurements of agglomeration effect and goal setting for the development of agglomeration system.

Keywords: agglomeration effect; agglomeration; economies of scale; localisation effect; urbanisation effect; settlement effect; diversification; theory of regional growth.

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For citation: Pavlov Yu. V. (2021). Systematisation of factors behind the agglomeration effect. Journal of New Economy, vol. 22, no. 4, pp. 116–138. DOI: 10.29141/2658-5081-2021-22-4-7