Document Type : Research Paper
Author
Department of Urban Planning, Faculty of Engineering, Salman Farsi University of Kazerun, Iran.
Abstract
Highlights
Agglomeration economies are observable in small cities like Kazerun, not just in large metropolitan areas.
Both specialized clusters and economic diversity emerge in a linear or ribbon-like form across the city.
The formation of specialization or diversity is influenced by activity type and pedestrian accessibility.
The intra-urban scale, particularly at the street level, is more effective for identifying localization and urbanization economies.
Introduction
The spatial distribution of economic activities within a city and their interrelations—along with the physical forms they take—have long been of interest to geographers, urban planners, and economists. Agglomeration economies, and their manifestations in the forms of localization and urbanization economies, not only provide functional benefits for businesses but also create distinct spatial patterns. These patterns—whether clustered, concentrated, or linear—hold significant implications for urban form.
While most previous research has focused on agglomeration economies at the regional or city-wide scale, emphasizing productivity, growth, and employment at the firm or industry level, such studies often overlook intra-city scales. In particular, little attention has been paid to how economic activities and businesses are spatially organized within neighborhoods and along individual streets, and how this distribution relates to the city’s spatial structure.
This study aims to fill that gap by examining whether agglomeration effects, specifically localization and urbanization economies, occur in small cities such as Kazerun. The research investigates the spatial characteristics of specialized clusters (localization) and diverse activity patterns (urbanization) in relation to streets, business types, and forms of urban access.
Theoretical Framework
Agglomeration refers to the geographical clustering of firms and businesses, and the benefits that emerge from proximity are referred to as agglomeration economies. These external economies can be categorized into two types:
Localization economies, which arise from the co-location of firms operating in the same industry, leading to specialized spatial clusters and enhanced productivity.
Urbanization economies, which result from the general co-location of diverse industries within the same urban area, promoting innovation and service diversity.
Localization economies are sector-specific, while urbanization economies are cross-sectoral. Both types create externalities that foster knowledge spillovers and innovation. The spatial manifestations of these externalities are termed specialization (for localization) and diversity (for urbanization).
This study analyzes the spatial distribution of economic activities at the street level to identify these agglomeration patterns in a small-city context.
Methodology
Kazerun, a small city in southwestern Iran with a population of approximately 96,000, was selected as the study area. Business data were obtained from the Kazerun County Chamber of Guilds, covering 30 major streets and a total of 3,804 businesses.
To analyze the spatial patterns of specialization and diversity, the following indices were applied:
Location Quotient (LQ): to measure the degree of specialization and identify localization economies.
Herfindahl–Hirschman Index (HHI) and Shannon Diversity Index: to measure the level of economic diversity and identify urbanization economies.
The spatial results were visualized using thematic maps to illustrate how economic activities are distributed across different streets.
Results and Discussion
The Location Quotient (LQ) results reveal notable examples of specialization:
Khorramshahr Beltway in vehicle services (LQ = 2.25)
Imam Khomeini Street in computer-related services (LQ = 4.53)
Pardis Boulevard in real estate services (LQ = 6.75)
Other streets and their respective LQ values are detailed in tabular form in the full study.
In terms of diversity, results from the HHI and Shannon indices indicate that streets such as Imam Khomeini, Qadamgah, North Shohada, North Hafez, and Saadi exhibit the highest levels of economic diversity. Conversely, streets like Salman Farsi, South Ferdowsi, and North Ferdowsi demonstrate high levels of specialization. These spatial patterns suggest that the interplay between pedestrian accessibility, street width, and proximity to the central business district significantly influences the emergence of economic specialization or diversity.
Conclusion
Although some previous studies have posited that large cities are more conducive to economic diversity, this study demonstrates that similar diversity can also emerge at the street level in small cities. The findings align with recent scholarship that emphasizes the spatial dispersion of agglomeration effects in the information age, beyond central business districts.
In Kazerun, the benefits of agglomeration economies manifest in both specialized and diverse clusters, often in linear formations along prominent streets. This reflects the influence of factors such as the nature of services provided, physical space requirements, levels of pedestrian and vehicular access, and proximity to dense population areas.
Examples include:
Technical services (e.g., vehicle repair) clustering along major roadways like Khorramshahr Boulevard
Agricultural services concentrated on wider, less walkable streets like Ferdowsi
Real estate agencies locating in newer, developing areas (e.g., Pardis Boulevard)
Medical services centralized within walkable zones in the urban core (e.g., Salman Farsi Street)
Mixed-use, diverse streets such as North and South Shohada, Abuzar, and Imam Khomeini accommodating a variety of activities due to their narrower widths and central locations
These patterns underscore the relevance of intra-urban spatial analysis for understanding agglomeration dynamics in smaller urban settings.
Keywords
- Agglomeration economies
- specialization
- diversity
- economic activities
- intra-urban spatial analysis
- Kazerun
Main Subjects
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