Information Technology and Urbanization Economies

It is increasingly recognized that urbanization economies – the benefits of living in cities – can be generated by proximity to large cities (OECD 2015). Several scholars have put forward that places near other large cities are increasingly able to ‘borrow size’ of their neighbours to generate these economies, and that this may explain recent patterns of (economic) growth across European cities, whereby the largest cities have not necessarily had the highest growth rates (Dijkstra et al. 2013, Burger and Meijers 2016). These studies suggest that Europe’s unique polycentric urban structure increasingly allows urbanization benefits to be generated by proximity to large agglomerations, due to improvements in physical and digital infrastructure.
Indeed, there is plenty of evidence that increasing the effective density of regions by improving physical transportation infrastructure leads to higher levels of urbanization economies (Graham 2019). For improvements in digital infrastructure however, such evidence is missing. In this thesis I attempt to fill this gap, and contribute to the discussion of whether information technology enables places in proximity of large cities to ‘borrow’ urbanization economies?
To understand the relation between IT and borrowed size it is important to have a plausible theoretical mechanism. In the introduction of this thesis I have put forward such a theoretical link, that is based on the relation between ubiquitous online information and travel behaviour. In short, I expect that in some cases IT may complement longer distance travel for jobs and local products, which means that in these markets urban scale economies (including better matching and wider product variety) are generated and enjoyed across a greater geographical scale. Based on this theoretical link, I devised two research questions.
1. To what extent does information technology increase the geographical extent of local labour and product markets?

2. To what extent has the advent of information technology led to better local (labour or product) market outcomes in places in proximity of large cities?