Urban Form, Not Just Scale: Rethinking Growth in a Fragmented Global Order – Evidence from a Dynamic Panel across Income Groups

Abstract

In an era marked by global economic realignments and shifting urban geographies, this study examines how urban agglomeration, population distribution, and business density shape national income dynamics across the global income spectrum. Using a panel of 214 countries from 2000 to 2023, categorized by World Bank income groups, we explore the differentiated impacts of urban population structures, within and beyond metropolitan centers, and new business density on Gross National Income (GNI) per capita. Leveraging dynamic panel techniques, including Differenced and System Generalized Method of Moments (GMM), our findings underscore that concentrated urban agglomerations significantly boost income levels, particularly in upper-middle-income economies. In contrast, dispersed urban population growth, i.e., indicative of urban sprawl, negatively correlates with income, highlighting the pitfalls of unplanned spatial expansion. Business density emerges as a key enabler of agglomeration economies, contributing positively to income growth through entrepreneurial dynamism. These results offer critical insights into the spatial-economic architecture of development, emphasizing that in a transforming global order, economic gains from urbanization depend less on scale and more on form, functionality, and institutional capacity. The study also reveals strong path dependency in income growth.