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Debates about urban growth and change often centre on specialization. However, arguments linking specialization to metropolitan economic development contain diverse, and sometimes conflicting, claims. Is it better to be highly specialized or diversified? Does specialization refer to the absolute or relative scale of an activity in a region? Does specialization have static or evolutionary effects? This paper investigates these questions in theoretical and empirical terms. By analysing local agglomerations over time, it is found that growing absolute specialization is positively linked to wages, while changes in relative concentration are not significantly associated with wage dynamics.
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Kemeny et al. (2014) studied this question.
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