Around the world, economists of various persuasions have been developing a deeper understanding of the importance of geography for economic growth and development (Porter 2003; Krugman 2011; Glaeser 2011; Collier and Venables 2017). An initial interest in transport costs has broadened into the positive effects of spatial concentration on productivity and innovation. Proximity between firms and households in cities is believed to generate economies of scale and foster interactions which promote learning, improve efficiency, stimulate enterprise, and raise investment returns.
Human Sciences Research Council (Fri,) studied this question.