INTERNATIONAL EXPERIENCE OF THE ECONOMIC IMPACT OF URBAN AGGLOMERATIONS ON THE SUSTAINABLE DEVELOPMENT OF THE NATIONAL ECONOMY
Abstract
The article provides a comprehensive academic analysis of the mechanisms through which urban agglomerations influence national economic growth and long-term sustainable development indicators. Within the framework of modern urbanization, cities have become primary engines of global wealth, generating over 80% of global GDP and concentrating the majority of innovation and private sector employment. The research delves into the fundamental micro-foundations of agglomeration economies, specifically the triple mechanisms of sharing (indivisible public goods and facilities), matching (optimizing labor market efficiency between specialized firms and workers), and learning (facilitating knowledge spillovers and technological diffusion). Quantitative evidence from international organizations reveals that doubling urban density typically correlates with productivity gains of 4% to 6% in OECD countries, whereas in emerging economies like China, India, and various African nations, these figures range from 12% to 19% due to the initial returns on resource concentration. However, the study identifies a significant gap between nominal wage growth and total factor productivity (TFP), suggesting that urban premiums in developing nations are often driven by capital intensity rather than pure efficiency. A critical part of the research is dedicated to the analysis of "urban costs" or negative externalities—such as chronic traffic congestion, air pollution, housing shortages, and social inequality—which can reduce net agglomeration elasticity to as low as 0.1% if left unmanaged. The article compares distinct spatial development paradigms: the North American "sprawl" model characterized by high car dependency, the European polycentric network model (PUR) focused on compact development and regional cohesion, and the East Asian transit-oriented development (TOD) model, exemplified by Japan's "rail-plus-property" system. Furthermore, the study examines innovative financial instruments necessary for sustainable urban scaling, including Land Value Capture (LVC), Betterment Levies, and Tax Increment Financing (TIF), which allow municipalities to reinvest infrastructure-induced land value gains back into public goods. Finally, the research underscores the necessity of multi-level governance and inter-municipal cooperation (IMC) to synchronize administrative boundaries with functional urban areas (FUA), ensuring that metropolitan growth aligns with national sustainability goals and social inclusivity.
Fields of Study & Subjects
Regional Economics and Spatial Analysis
Global Urban Networks and Dynamics
Urban Development and Societal Issues
Publication details
- Journal / source
- Economic scope
- Issue
- 208
- Pages
- 141–147
- Publication date
- 17 January 2026