Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/174647 
Year of Publication: 
2016
Series/Report no.: 
56th Congress of the European Regional Science Association: "Cities & Regions: Smart, Sustainable, Inclusive?", 23-26 August 2016, Vienna, Austria
Publisher: 
European Regional Science Association (ERSA), Louvain-la-Neuve
Abstract: 
Public sector activities are often neglected in economic approaches to analyze the driving forces of urban growth and changes in urban hierarchies. One crucial aspect of public sector activities is the institutional status of cities as regional capital. The paper is reporting on a quasi natural experiment on East German county towns. Since 1990, cities in East Germany have shown remarkable differences in their population development. During the same period many towns have lost their former status as county seat due to several administrative reforms. Using a Difference-In-Difference approach we compare the population development of former county capitals to cities successfully holding a capital status over the observed period. The estimation results show a statistically significant and economically relevant positive effect of holding a county capital status on annual population change. We further observe that the difference in population developments is increasing over time. Our results are not only of empirical interest but contribute to the general literature, explaining urban hierarchies and should be considered by policymakers for future policy measures stimulating urban economic growth.
Subjects: 
Urban Economic Growth
Centrality
Institutions
Public Sector
East Germany
Post-socialist Cities
Capital Cities
County Towns
County Government Reform
JEL: 
R1
R5
P2
H1
H7
Document Type: 
Conference Paper

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