Urban evolution in Sao Paulo: employment growth and industrial location

In this paper we empirically investigate the dynamics of employment and industrial location across municipalities in the state of Sao Paulo, Brazil. Making use of a number of indicators we have illustrated that the state's urban system is becoming more complex and facing a number of considerable changes. In the main part of the paper spatial econometric models are estimated and our results provide preliminary evidence of the role played by geographical and economic factors on employment growth and industrial spatial reallocation. The analysis suggests that diversified economies within metropolitan areas and close to the state's capital are subject to relatively more intense dynamics. However, controlling for a range of variables, smaller towns have been growing and churning more rapidly than the large cities. We have also evidenced that the presence of universities and the participation of the private sector are important for this dynamism. We also find that employment growth is subject to local spatial externalities but industrial churning is not.