Abundance and Economic diversity as a descriptor of cities' economic complexity

TL;DR

This paper introduces a framework using abundance, diversity, and longevity of economic units to measure urban economic complexity and resilience, revealing spatial nonlinearities and growth regimes in Mexico City.

Contribution

It proposes a novel ADL-based framework combining economic complexity theory with spatial analysis to assess urban economic resilience and structural transitions.

Findings

Nonlinear spatial dynamics with powerlaw behavior in city centers.

Longevity influences the relationship between abundance and diversity.

Evidence of polycentric restructuring in Mexico City.

Abstract

Intricate interactions among firms, institutions, and spatial structures shape urban economic systems. In this study, we propose a framework based on three structural dimensions -- abundance, diversity, and longevity (ADL) of economic units -- as proxies of urban economic complexity and resilience. Using a decade of georeferenced firm-level data from Mexico City, we analyze the relationships among ADL variables using regression, spatial correlation, and time-series clustering. Our results reveal nonlinear dynamics across urban space, with powerlaw behavior in central zones and logarithmic saturation in peripheral areas, suggesting differentiated growth regimes. Notably, firm longevity modulates the relationship between abundance and diversity, particularly in periurban transition zones. These spatial patterns point to an emerging polycentric restructuring within a traditionally monocentric metropolis. By integrating economic complexity theory with spatial analysis, our approach provides a scalable method to assess the adaptive capacity of urban economies. This has implications for understanding informality, designing inclusive urban policies, and navigating structural transitions in rapidly urbanizing regions.