Territorial Review Copenhagen - Region Hovedstaden

245
efficiency of the labour market, by opening up a larger, higher-quality
labour pool and a wider range of services to key employers and producers.
The cost of achieving a true single economic space may however be
extremely high, due to the infrastructure investment required. Collaboration
is more likely to become a valuable economic strategy in regions where
there are fewer, larger dominant urban centres rather than those
characterised by a complex network of cities (Docherty et al., 2004).
Measurement of urban competitiveness
Competitiveness of firms represents the capacity of a business or the
businesses of an area to sell its products in contested markets. The emphasis
on contested markets is clearly important in order to avoid attributing
competitiveness to cases which are protected from any strong competition.
There are three kind of indicators that measure this: export, growth and
productivity performance. Export markets may be expected to be the most
widely contested. Firms from all areas might be expected to face a
comparable set of competitors there, which may well not be true in different
national and regional markets. Section 1.2 of this Review focuses on the
competitiveness of firms in Copenhagen.
Some authors take the aggregate of firms‘ competitiveness in a region as
a proxy for regional competitiveness. Some models for urban
competitiveness have for example taken the growth in manufacturing value
added, retail sales and business services receipts into account (Kresl and
Singh, 1999). Although competitive firms often translate into regional
welfare, this is not necessarily the case. Separate measurement of urban
competitiveness is therefore necessary.
The consumer price index in large cities is slightly higher than the
national average, but the land rent in large cities is much higher than the
national average. Due to these variations in price differentials, it is not
certain whether the real income in larger cities is higher or lower.
Glaeser et al. (1995) argued that in the analysis of regional growth, the
appropriate dependent variable was population growth. They argued that
equilibrium implied that the real returns to labour would be equalised
between regions on the margin (since labour would vote with its feet if
higher real returns were available elsewhere) and price differences and
differences in the quality of life (climate, natural amenities or local
pollution, for example) would be fully reflected in money incomes. In their
view, the most appropriate measure of differences in regional growth in
prosperity would be employment and population growth.