Conference paper

Cities are, primarily, economic agglomerations. The drivers of urban growth have generally been divided between two conceptual and non-mutually exclusive categories: urbanisation (city/region level) and localisation (industry/sector level) economies. Some theories propose that urbanisation economies drive city size, measured by its population, and hence city size is the strongest predictor of aggregate economic outputs from a city such as productivity, GDP and wages. Thus, larger cities tend to be super-linearly more productive. However, other research suggests that size alone is not the only determinant of economic function and outputs, but rather localisation economies, the specific types of industries, sectors, and occupations that agglomerate in a particular city also have significant impact on the growth of a city.

We investigate the question of how urbanisation and localisation economies interact over the 30 largest Australian Significant Urban Areas (SUAs). While there is little consensus on city size classifications globally, for Australia, we define large cities as SUAs of over 1 million people, mid-sized cities as SUAs of between 500,000 and 1 million people, small cities as between 100,00 and 500,000 people, and large towns as a population of between 50,000 and 100,000 people.

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