ABSTRACT
This chapter considers what factors contribute to boosting economic performance and economic development in metropolitan areas, and specifically which group of factors best explains metropolitan economic performance – traditional factors, such as physical capital, human capital, economic structure and specialisation, or other factors, such as innovation, the creative class, institutions, metropolitan governance and urban structure. The discussion on the drivers of economic performance incorporates a review of theoretical approaches that explain urban economic development and an overview of international empirical evidence on the determinants of economic development in metropolitan areas. A number of variables are tested using a pooled data model to assess their influence on productivity and per capita production in Mexico’s metropolitan areas in 2008 and 2013. The results reveal the important role of traditional factors, formal employment and financial autonomy in improving productivity. In contrast, GDP per capita correlates only with capital accumulation, human capital and city size. The findings showing that city size is not significant in accounting for productivity clearly reveals that the benefits of agglomeration economies are lacking in Mexico’s metropolitan areas.
