Regional and Urban Economics
Practical
➢ Prof. Joris Beckers
➢ Course material
➔ Course notes and recommended additional readings available on Blackboard.
➔ Slides are the main material for the exam (lecture notes are extra).
➢ Oral exam
➔ Closed book, open-question, oral exam with preparation time.
➢ Grading during exam
➢ Schedule
,Content
Lecture 1: Introduction ............................................................................................. 1
1. Introduction .................................................................................................. 1
1.1. The first law of geography ............................................................................ 1
1.2. Geographer’s mantra .................................................................................. 1
2. Regional and Urban Economics ...................................................................... 2
2.1. Definition (where, why and what) ................................................................. 2
2.2. Interesting times......................................................................................... 3
Lecture 2: Location Theories..................................................................................... 9
1. Definition (where, why and what?) ................................................................... 9
2. Location Theories .......................................................................................... 9
2.1. Transport costs .......................................................................................... 9
2.2. Other location theories ............................................................................. 14
2.3. Transport costs: Economies of distance ..................................................... 18
2.4. Location theories: Hoover ......................................................................... 19
2.5. Location theories: Hotelling -> Duopolist situation ...................................... 19
Lecture 3: Agglomeration Theories .......................................................................... 21
1. Agglomeration theories ................................................................................ 21
1.1. Introduction ............................................................................................. 21
1.2. Clusters ................................................................................................... 23
1.3. Different agglomeration models ................................................................ 23
1.4. Clusters: Critique ..................................................................................... 28
Lecture 4: Guest lecture – Port of Antwerp-Bruges ................................................... 33
1. Introduction to Port of Antwerp-Bruges .......................................................... 33
1.1. Who is the Port of Antwerp-Bruges ............................................................. 33
1.2. What we do .............................................................................................. 33
1.3. Industry ................................................................................................... 34
1.4. Frontrunner as industry and energy hub in transition ................................... 34
2. Investment management .............................................................................. 36
2.1. NextGen district ....................................................................................... 36
2.2. Final remarks ........................................................................................... 37
,Lecture 5: Geography of High Tech entrepreneurship and entrepreneurial finance
(Venture capital) + guest lecture “Segments.ai”. ....... 38
1. What is entrepreneurship? ............................................................................ 38
1.1. What is a startup? ..................................................................................... 38
1.2. “Inputs” for hightech startups .................................................................... 39
2. Where would you locate your startup? ........................................................... 39
2.1. There is no place like home ....................................................................... 39
2.2. Silicon Valley ............................................................................................ 40
3. Ways to finance a startup ............................................................................. 40
3.1. Venture capital ......................................................................................... 40
3.2. Crowdfunding .......................................................................................... 42
3.3. Crowdfunding versus Venture capital ......................................................... 43
3.4. Is crowdfunding an alternative to fund startups in more remote locations? ... 43
Lecture 6: The internal structure of the city .............................................................. 45
1. Internal structure of the city .......................................................................... 45
1.1. Burgess: concentric zone theory ................................................................ 45
1.2. Alonso-Muth: Concentric zone theory ........................................................ 46
1.3. Housing production (cost model for the producer) ...................................... 48
1.4. Breuckner model ...................................................................................... 50
2. Internal structure of the city: Excercise .......................................................... 51
Lecture 7: City growth in Belgium ............................................................................ 55
1. Urban sprawl ............................................................................................... 55
1.1. Model predictions – Breuckner model ........................................................ 55
1.2. Model adaptations – Breuckner model ....................................................... 56
2. City formation in Belgium ............................................................................. 57
2.1. Urbanisation ............................................................................................ 57
2.2. Suburbanisation ....................................................................................... 58
2.3. De-urbanisation ....................................................................................... 60
2.4. City region formation ................................................................................ 62
2.5. Re-urbanisation........................................................................................ 62
Lecture 8: Urban systems ....................................................................................... 64
1. Introduction ................................................................................................ 64
, 2. Rank-size rule .............................................................................................. 64
2.1. Why this distribution? ............................................................................... 65
3. Central place theory – Christaller .................................................................. 66
3.1. Key concepts ........................................................................................... 66
3.2. Key assumptions – ‘economic rationality’ .................................................. 67
3.3. Mechanism ............................................................................................. 67
3.4. Order and hierarchy ................................................................................. 67
3.5. Rules – central place theory...................................................................... 69
3.6. Summary + advantages ............................................................................... 69
3.7. Limitations of the Christaller model .......................................................... 70
4 Central place theory today ............................................................................ 70
4.1. Origins of retail ......................................................................................... 70
4.2. Evolution of space .................................................................................... 70
4.3. Retail patterns today ................................................................................. 70
4.4. Retail policy – Belgium .............................................................................. 71
4.5. Retail patterns in Flanders......................................................................... 72
4.6. Unbundling implications ........................................................................... 73
Lecture 9: Regional Strategies................................................................................. 74
1. Sample exam questions ............................................................................... 74
2. Regional and urban economics – interesting times ......................................... 77
2.1. Regional strategies - introduction .............................................................. 77
2.2. Regional strategies – challenges ................................................................ 78
2.3. Regional strategies – Growth Pole .............................................................. 79
2.4. Regional strategies – reconsiderations ....................................................... 79
, Lecture 1: Introduction
1. Introduction
Geography is an interdisciplinary science
EX: location theories = why do you put an economic activity here? (labour, technology, politics…)
1.1. The first law of geography
= everything is related to everything else, but near things are more related to each other.
EX: 2 people in Antwerp are more likely to meet than 2 people on opposite sides of the world.
1.2. Geographer’s mantra
➢ There are 3 ways to describe a location
1) Absolute
(=coordinates)
2) Relation with its surroundings (place)
A) Physical
EX: De Schelde = The Physical aspect refers to the natural environment of Antwerp,
mainly the River Scheldt.
➔ The river gives Antwerp access to the sea, which is crucial for its port, but it also makes the
port less competitive because ships must travel far upstream to reach the docks.
B) Social
EX: European Parlement = The Social aspect of the European Parliament in Brussels
refers to its human and societal connections.
Because Brussels is the political heart of Europe, it attracts people from many different
countries, creating a very international and multicultural environment.
The presence of the EU institutions brings jobs, diplomats, journalists, and lobbyists, which
strongly influences the local economy, housing, and daily life.
3) Topological (network)
EX: Highway network
➔ Belgium’s advantage is its central
placement in Europe; we are well
connected with the whole continent.
➔ 10% of Belgium’s BBP is related to
logistics.
1
, 1.2.1. Why geography?
➢ Geography and economics are closely related.
Red -> lot of deliveries (or failed
deliveries) <-> Blue opposite
➔ Useful data to try and implement
solutions to make the operation
more efficient or save costs.
➢ Factors that decrease/increase the likelihood of 2 countries engaging in international trade
o Increased international trade
1) Common currency 2) common language
o Decreased international trade
1) Physical distance
2. Regional and Urban Economics
2.1. Definition (where, why and what)
➢ 2 overarching questions:
1) What drives the spatial decisions of firms, people and governments as the main
agents?
2) Why are some places more prosperous (in a broad sense) than others?
• The ability to interpret the ‘why’ question has changed
- Growing interest in spatial economics
- Discipline became open-minded
- Ability to synthesize and link subjects
- Efforts in terms of urban and regional data provision
= increased awareness and understanding of:
- Role played by cities and regions in the global economy
- Impacts of global economic changes on cities and regions
• Different headings, but studying the same topics
- regional and urban economics
- the space economy
- spatial economics
- economic geography
2
, Economic geography is area-specific economics
By no means mutually exclusive categories, and many analyses will fall into both categories.
➔ Study economics and challenges of cities and regions by understanding the effects of
geographic location on the decision of individuals and firms.
2.2. Interesting times
➢ There are 6 features that shape current regional economics.
(-> limited to 4 in lecture notes).
1) Pervasive globalization?
A) Communication revolution
B) Technical improvements in physical transportation.
2) Break-up of the Fordist socioeconomic system/manufacturing system
3) Critical change in nature and labor markets and work
4) Environmental concerns
2.2.1. Technical improvements in physical transportation
EX1: The emergence of the major
airplane models.
➔ Huge driver of globalization.
EX2: Technological improvements in physical
transportation.
➔ Containers = way to standardize the transportation of
goods.
(-> all trucks are now able to transport containers
easily due to their standardization).
= reduction in transport costs increased global trade.
3
,EX3 : technological improvements in physical transportation.
➔ The physical internet moves goods
like the internet moves data, using
shared routes to send items in smart,
standardized boxes. This makes transport
faster, cheaper, and more sustainable
2.2.2. Communication revolution
➔ Platforms such as Microsoft Teams,
but also the Iphone (2007).
2.2.3. Pervasive globalization?
Globalization = Ever-increased economic geographic integration of the world as measured by
the movements across national borders of:
1) goods, services and capital
2) labor (people)
3) knowledge and information (communication)
4) cultural goods and activities – sports, cuisines, electronic games, films, music, and so
on.
➔ Example of globalization
= shows the complexity of producing a
product using parts from all around the
world.
4
,2.2.4. The flat world idea (Friedman)
= A flat world is a world where there are no barriers, we can go wherever we want, speak to
whomever we want. -> There are no barriers limiting exchange.
• Is the world flat?
➔ No, the world is ‘spiky’.
EX: In Limburg you must drive longer to
reach a highway compared to Antwerp.
EX*: most tech innovation and wealth
are concentrated in Silicon Valley, even
though people worldwide use the same
global technology.
• Globalization slowing down?
➢ Import as a percentage of GDP
EX*: The shift away from imports in the U.S.
began under pressure from Trump’s trade
policies but has since become a strategic choice.
Companies and policymakers now aim to reduce
reliance on fragile global supply chains by
investing in domestic production and
“friendshoring” to trusted countries, or
reshoring (= bringing production back to the US).
➔ Globalization is stagnating. (EX*: Trump tariffs)
There is a clear shift happening.
= Companies are moving their production away from the
countries they originally outsourced to, to other countries such
as India.
➔ China ‘almost’ became a specialized technology hub,
resulting in labour costs going up.
EX*: Nike has shifted its production away from China to Vietnam
and Indonesia.
5
, *Container freight rates = the fees charged by
shipping lines to move a container
EX: Covid 19, Evergreen boat in Suez Canal
EX: Houthi (Yemen) attacking transport ships.
➔ Houthi attacks force ships to take longer, more
expensive routes around Africa, which reduces
available shipping space and spikes freight
prices globally.
➔ These were all examples of globalization slowing down.
Reaction: Versailles Declaration 2022
= EU agreement to reduce strategic dependencies: key sectors like raw materials,
semiconductors and food should be produced (more) within the EU rather than relying on
foreign supply.
• From Fordism to post-Fordism
➔ Clear transformation where creativity
becomes increasingly important.
2.2.5. Change in nature of labor markets and work
EX: Mercosur agreement -> European farmers are against it because the Latin American farmers
might not have to adhere to the same rules thus making their production cheaper.
EX*: Discussion regarding the ETS system (Emissions trading system), where big industrial
companies want a temporary pause on the emission cap in order to regain their competitiveness
to other markets such as China and the US.
6
Practical
➢ Prof. Joris Beckers
➢ Course material
➔ Course notes and recommended additional readings available on Blackboard.
➔ Slides are the main material for the exam (lecture notes are extra).
➢ Oral exam
➔ Closed book, open-question, oral exam with preparation time.
➢ Grading during exam
➢ Schedule
,Content
Lecture 1: Introduction ............................................................................................. 1
1. Introduction .................................................................................................. 1
1.1. The first law of geography ............................................................................ 1
1.2. Geographer’s mantra .................................................................................. 1
2. Regional and Urban Economics ...................................................................... 2
2.1. Definition (where, why and what) ................................................................. 2
2.2. Interesting times......................................................................................... 3
Lecture 2: Location Theories..................................................................................... 9
1. Definition (where, why and what?) ................................................................... 9
2. Location Theories .......................................................................................... 9
2.1. Transport costs .......................................................................................... 9
2.2. Other location theories ............................................................................. 14
2.3. Transport costs: Economies of distance ..................................................... 18
2.4. Location theories: Hoover ......................................................................... 19
2.5. Location theories: Hotelling -> Duopolist situation ...................................... 19
Lecture 3: Agglomeration Theories .......................................................................... 21
1. Agglomeration theories ................................................................................ 21
1.1. Introduction ............................................................................................. 21
1.2. Clusters ................................................................................................... 23
1.3. Different agglomeration models ................................................................ 23
1.4. Clusters: Critique ..................................................................................... 28
Lecture 4: Guest lecture – Port of Antwerp-Bruges ................................................... 33
1. Introduction to Port of Antwerp-Bruges .......................................................... 33
1.1. Who is the Port of Antwerp-Bruges ............................................................. 33
1.2. What we do .............................................................................................. 33
1.3. Industry ................................................................................................... 34
1.4. Frontrunner as industry and energy hub in transition ................................... 34
2. Investment management .............................................................................. 36
2.1. NextGen district ....................................................................................... 36
2.2. Final remarks ........................................................................................... 37
,Lecture 5: Geography of High Tech entrepreneurship and entrepreneurial finance
(Venture capital) + guest lecture “Segments.ai”. ....... 38
1. What is entrepreneurship? ............................................................................ 38
1.1. What is a startup? ..................................................................................... 38
1.2. “Inputs” for hightech startups .................................................................... 39
2. Where would you locate your startup? ........................................................... 39
2.1. There is no place like home ....................................................................... 39
2.2. Silicon Valley ............................................................................................ 40
3. Ways to finance a startup ............................................................................. 40
3.1. Venture capital ......................................................................................... 40
3.2. Crowdfunding .......................................................................................... 42
3.3. Crowdfunding versus Venture capital ......................................................... 43
3.4. Is crowdfunding an alternative to fund startups in more remote locations? ... 43
Lecture 6: The internal structure of the city .............................................................. 45
1. Internal structure of the city .......................................................................... 45
1.1. Burgess: concentric zone theory ................................................................ 45
1.2. Alonso-Muth: Concentric zone theory ........................................................ 46
1.3. Housing production (cost model for the producer) ...................................... 48
1.4. Breuckner model ...................................................................................... 50
2. Internal structure of the city: Excercise .......................................................... 51
Lecture 7: City growth in Belgium ............................................................................ 55
1. Urban sprawl ............................................................................................... 55
1.1. Model predictions – Breuckner model ........................................................ 55
1.2. Model adaptations – Breuckner model ....................................................... 56
2. City formation in Belgium ............................................................................. 57
2.1. Urbanisation ............................................................................................ 57
2.2. Suburbanisation ....................................................................................... 58
2.3. De-urbanisation ....................................................................................... 60
2.4. City region formation ................................................................................ 62
2.5. Re-urbanisation........................................................................................ 62
Lecture 8: Urban systems ....................................................................................... 64
1. Introduction ................................................................................................ 64
, 2. Rank-size rule .............................................................................................. 64
2.1. Why this distribution? ............................................................................... 65
3. Central place theory – Christaller .................................................................. 66
3.1. Key concepts ........................................................................................... 66
3.2. Key assumptions – ‘economic rationality’ .................................................. 67
3.3. Mechanism ............................................................................................. 67
3.4. Order and hierarchy ................................................................................. 67
3.5. Rules – central place theory...................................................................... 69
3.6. Summary + advantages ............................................................................... 69
3.7. Limitations of the Christaller model .......................................................... 70
4 Central place theory today ............................................................................ 70
4.1. Origins of retail ......................................................................................... 70
4.2. Evolution of space .................................................................................... 70
4.3. Retail patterns today ................................................................................. 70
4.4. Retail policy – Belgium .............................................................................. 71
4.5. Retail patterns in Flanders......................................................................... 72
4.6. Unbundling implications ........................................................................... 73
Lecture 9: Regional Strategies................................................................................. 74
1. Sample exam questions ............................................................................... 74
2. Regional and urban economics – interesting times ......................................... 77
2.1. Regional strategies - introduction .............................................................. 77
2.2. Regional strategies – challenges ................................................................ 78
2.3. Regional strategies – Growth Pole .............................................................. 79
2.4. Regional strategies – reconsiderations ....................................................... 79
, Lecture 1: Introduction
1. Introduction
Geography is an interdisciplinary science
EX: location theories = why do you put an economic activity here? (labour, technology, politics…)
1.1. The first law of geography
= everything is related to everything else, but near things are more related to each other.
EX: 2 people in Antwerp are more likely to meet than 2 people on opposite sides of the world.
1.2. Geographer’s mantra
➢ There are 3 ways to describe a location
1) Absolute
(=coordinates)
2) Relation with its surroundings (place)
A) Physical
EX: De Schelde = The Physical aspect refers to the natural environment of Antwerp,
mainly the River Scheldt.
➔ The river gives Antwerp access to the sea, which is crucial for its port, but it also makes the
port less competitive because ships must travel far upstream to reach the docks.
B) Social
EX: European Parlement = The Social aspect of the European Parliament in Brussels
refers to its human and societal connections.
Because Brussels is the political heart of Europe, it attracts people from many different
countries, creating a very international and multicultural environment.
The presence of the EU institutions brings jobs, diplomats, journalists, and lobbyists, which
strongly influences the local economy, housing, and daily life.
3) Topological (network)
EX: Highway network
➔ Belgium’s advantage is its central
placement in Europe; we are well
connected with the whole continent.
➔ 10% of Belgium’s BBP is related to
logistics.
1
, 1.2.1. Why geography?
➢ Geography and economics are closely related.
Red -> lot of deliveries (or failed
deliveries) <-> Blue opposite
➔ Useful data to try and implement
solutions to make the operation
more efficient or save costs.
➢ Factors that decrease/increase the likelihood of 2 countries engaging in international trade
o Increased international trade
1) Common currency 2) common language
o Decreased international trade
1) Physical distance
2. Regional and Urban Economics
2.1. Definition (where, why and what)
➢ 2 overarching questions:
1) What drives the spatial decisions of firms, people and governments as the main
agents?
2) Why are some places more prosperous (in a broad sense) than others?
• The ability to interpret the ‘why’ question has changed
- Growing interest in spatial economics
- Discipline became open-minded
- Ability to synthesize and link subjects
- Efforts in terms of urban and regional data provision
= increased awareness and understanding of:
- Role played by cities and regions in the global economy
- Impacts of global economic changes on cities and regions
• Different headings, but studying the same topics
- regional and urban economics
- the space economy
- spatial economics
- economic geography
2
, Economic geography is area-specific economics
By no means mutually exclusive categories, and many analyses will fall into both categories.
➔ Study economics and challenges of cities and regions by understanding the effects of
geographic location on the decision of individuals and firms.
2.2. Interesting times
➢ There are 6 features that shape current regional economics.
(-> limited to 4 in lecture notes).
1) Pervasive globalization?
A) Communication revolution
B) Technical improvements in physical transportation.
2) Break-up of the Fordist socioeconomic system/manufacturing system
3) Critical change in nature and labor markets and work
4) Environmental concerns
2.2.1. Technical improvements in physical transportation
EX1: The emergence of the major
airplane models.
➔ Huge driver of globalization.
EX2: Technological improvements in physical
transportation.
➔ Containers = way to standardize the transportation of
goods.
(-> all trucks are now able to transport containers
easily due to their standardization).
= reduction in transport costs increased global trade.
3
,EX3 : technological improvements in physical transportation.
➔ The physical internet moves goods
like the internet moves data, using
shared routes to send items in smart,
standardized boxes. This makes transport
faster, cheaper, and more sustainable
2.2.2. Communication revolution
➔ Platforms such as Microsoft Teams,
but also the Iphone (2007).
2.2.3. Pervasive globalization?
Globalization = Ever-increased economic geographic integration of the world as measured by
the movements across national borders of:
1) goods, services and capital
2) labor (people)
3) knowledge and information (communication)
4) cultural goods and activities – sports, cuisines, electronic games, films, music, and so
on.
➔ Example of globalization
= shows the complexity of producing a
product using parts from all around the
world.
4
,2.2.4. The flat world idea (Friedman)
= A flat world is a world where there are no barriers, we can go wherever we want, speak to
whomever we want. -> There are no barriers limiting exchange.
• Is the world flat?
➔ No, the world is ‘spiky’.
EX: In Limburg you must drive longer to
reach a highway compared to Antwerp.
EX*: most tech innovation and wealth
are concentrated in Silicon Valley, even
though people worldwide use the same
global technology.
• Globalization slowing down?
➢ Import as a percentage of GDP
EX*: The shift away from imports in the U.S.
began under pressure from Trump’s trade
policies but has since become a strategic choice.
Companies and policymakers now aim to reduce
reliance on fragile global supply chains by
investing in domestic production and
“friendshoring” to trusted countries, or
reshoring (= bringing production back to the US).
➔ Globalization is stagnating. (EX*: Trump tariffs)
There is a clear shift happening.
= Companies are moving their production away from the
countries they originally outsourced to, to other countries such
as India.
➔ China ‘almost’ became a specialized technology hub,
resulting in labour costs going up.
EX*: Nike has shifted its production away from China to Vietnam
and Indonesia.
5
, *Container freight rates = the fees charged by
shipping lines to move a container
EX: Covid 19, Evergreen boat in Suez Canal
EX: Houthi (Yemen) attacking transport ships.
➔ Houthi attacks force ships to take longer, more
expensive routes around Africa, which reduces
available shipping space and spikes freight
prices globally.
➔ These were all examples of globalization slowing down.
Reaction: Versailles Declaration 2022
= EU agreement to reduce strategic dependencies: key sectors like raw materials,
semiconductors and food should be produced (more) within the EU rather than relying on
foreign supply.
• From Fordism to post-Fordism
➔ Clear transformation where creativity
becomes increasingly important.
2.2.5. Change in nature of labor markets and work
EX: Mercosur agreement -> European farmers are against it because the Latin American farmers
might not have to adhere to the same rules thus making their production cheaper.
EX*: Discussion regarding the ETS system (Emissions trading system), where big industrial
companies want a temporary pause on the emission cap in order to regain their competitiveness
to other markets such as China and the US.
6
