An Analysis of Effects of Economic Globalization on Urban System

Abstract

Economic globalization has been altering urban systems laid within regions in advanced countries. It creates two poles in the population distribution of the urban system: a large city and many small ones. Making use of the theories of fragmentation of production processes and retailers' market areas, this paper firstly elucidates the mechanism in which location change of major economic facilities due to expanding economic activity beyond a country's borders divides cities that comprise the urban system into the two parts. Secondly, this paper shows, using a simple empirical analysis, that the structure of the urban system influences a region's production and social performance. While the urban system, where the primary city dominates the urban population distribution, reveals positive economic results, its social welfare level is not so high when compared with its economic achievement. The result of this examination suggests that revitalization of the secondary cities in urban systems is significant to raising the level of national social welfare.