Territorial Review Copenhagen - Region Hovedstaden

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over 1980-2003, confirm the presence of significant agglomeration effects at
the aggregate level; their estimated elasticity is 13%. Cross-section
regressions suggest that the strength of agglomeration effects has increased
over time (1980-2003).
Urban competitiveness has only become more relevant over the last
decades, thanks to several factors. Trends towards the cheapening of
transport and communications have continued. Rather than reducing the
importance of locational assets, they have tended to stress their importance.
Empirical work of Gaspar and Glaeser (1998) suggests that
telecommunications may be a complement to, or at least not a strong
substitute for, cities and face-to-face interactions. They show for example
that people who live in metropolitan areas of more than 4 million inhabitants
in the United States spend significantly more on telephones than people in
smaller cities. They also show a strong correlation between urbanisation and
phone use. At the same time, increasing importance has been attached to
competition in terms of distinctive product qualities (more than simply
price). The major effect has been to increase the importance of the more
qualitative sort of urban assets. Increased global trade flows have augmented
the position of urban areas as central nodes in global supply chains.
Economic restructuring has made the role of urban areas more
important. This is for example evidenced by the effects of mergers and
acquisitions. Rodriguez-Pose and Zademach (2003) studied the geography
of mergers and acquisitions in Germany during the 1990s and found that
mergers and acquisitions are fundamentally large-city phenomena and
contribute to the economic take-off of the main German metropolitan areas.
The wave of mergers and acquisitions in the 1990s has contributed to a
major concentration of firms, company headquarters and economic activity
in the key German metropolitan areas. The transactions taking place in the
main German cities far outweigh in relative terms all those taking place in
other regions. Demographic changes such as smaller households, dualearner
households, busier life-styles, increasing mobility and expansion of
demand for higher education also favoured cities.
Trade-offs in urban competitiveness
Although there is some relation between competition on different
markets, these forms of competition do not necessarily reinforce each other:
being attractive as a location for new businesses does not automatically
imply attractiveness for new inhabitants. This means that places have to
make choices as to their priorities and choose their specific policies and
competitive strategies with an awareness of their relevance to the markets
most important for their success. Product market competition will typically