Agglomeration economies and urban mobility in developing countries

Source abstract

Using geocoded firm-level productivity data from the World Bank’s Enterprise Survey and urban density and mobility data for metropolitan areas in the developing world, we examine the extent to which urban mobility constraints reduce the returns to urban density. Although the average returns to density in the developing world are comparable with those observed in advanced countries, the magnitude of these benefits varies substantially across metropolitan areas. We find that agglomeration economies are lost through both limited uncongested mobility and congestion, but the latter has the stronger negative effect, especially for firms providing non-tradable services.