How economic agglomeration could impact the economic development at the region level an spatial analysis in Colombia



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Universidad EAFIT


This paper analyzes the economic agglomeration impact in Colombia’s economic development by region, taking GDP per capita as a dependent variable and agglomeration, inequality, crime, illiteracy and qualified employment as explanatory variables -- We used data from 24 departments in Colombia between 2001 and 2014, identifying the correlation between all variables and estimating an econometric model through a fixed effects panel method -- The literature reviewed in this paper shows theoretical concepts about agglomeration and similar studies made in Colombia and other latitudes, where agglomeration economies have contributed significantly to determine public policies and economic development strategies -- In line with this literature, we found a strong relationship between economic agglomeration and GDP per capita in Colombia, identifying at the same time a negative effect by inequality, crime and illiteracy in GDP per capita, contrary to qualified employment which has a positive effect in our dependent variable -- These findings corroborate the importance of investing in reducing inequality, crime and illiteracy in Colombia and, in this same way, increasing qualified employment to improve levels of GDP per capita -- Conversely, today Colombia is a country which concentrates 50% of its population in just 4 departments and the other 50% occupies the other 28 departments -- Factors associated with the geography, topography, low transportation and telecommunication infrastructure, crime, inequality, unemployment and education, could explain these sharp differences in economic development at a regional level


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