Regional Agglomeration in Portugal: A Linear Analysis

TL;DR

This paper analyzes Portugal's regional economic clustering using linear New Economic Geography models, highlighting spatial factors and the influence of productivity on regional concentration, with evidence of divergence in Lisboa e Vale do Tejo.

Contribution

It integrates clustering and polarization models to explain regional agglomeration in Portugal, emphasizing the role of productivity and spatial factors.

Findings

Regional divergence observed in Lisboa e Vale do Tejo

Productivity significantly enhances clustering explanations

Spatial factors like distance and transport costs are influential

Abstract

This work aims to study the Portuguese regional agglomeration process, using the linear form the New Economic Geography models that emphasize the importance of spatial factors (distance, costs of transport and communication) in explaining of the concentration of economic activity in certain locations. In a theoretical context, it is intended to explain the complementarily of clustering models, associated with the New Economic Geography, and polarization associated with the Keynesian tradition, describing the mechanisms by which these processes are based. As a summary conclusion, we can say which the agglomeration process shows some signs of concentration in Lisboa e Vale do Tejo (which is evidence of regional divergence in Portugal) and the productivity factor significantly improves the results that explain the regional clustering in Portugal (despite being ignored in the models of New Economic Geography).