Dynamics of Economic Sectors and Human Mobility Before and During COVID-19: The Portuguese-Specific Context

Introduction

The dynamics and location of economic activity may be explained by several approaches, where the New Economic Geography (NEG) has its place (Branco et al., 2016). The NEG considers increasing returns to scale at firm level, market size and transport costs to explain why the population and the business sector tend to agglomerate around big poles, such as cities, regions or countries (Krugman, 1996). These agglomeration processes are self-reinforced through circular and cumulative phenomena (Krugman, 2007), because the companies concentrate where there are more population (market size) to save transport costs and the population concentrate in places with more companies (more jobs) and higher real wages (Goto & Minamimura, 2019). The public policies are claimed to promote more balanced growths (Chatti et al., 2019). In fact, the NEG highlighted the importance of the space concept for the economic explanations (Krugman, 1998a) and brought the geographical dimensions for the economic theory (Krugman, 1998b). However, the NEG after these years continues as an approach with, still, great potential to be explored (Fujita & Krugman, 2004) in several dimensions (Krugman, 2011). More balanced relationships between the transport costs and the innovation may play a relevant role to promote a more sustainable development (Gonzalez-Val & Pueyo, 2019).

The developments from the NEG have been considered for the explanation of several economic agglomeration processes around the world (Kim & McCann, 2020), since the Thailand (Bui & Preechametta, 2019) and Asian integration (Gopalan et al., 2020) until the European context (Commendatore et al., 2020). The European Union integration context is a particular framework that motivates the scientific community to apply the NEG approaches in the assessment of potential scenarios. The Asian evolution process is another interesting context that aroused curiosity for specific cases, as that related with the relationships among China and Pakistan (Imran et al., 2020) or the specific Chinese framework (Jin et al., 2020), with their particularities (Li et al., 2019). In a sectorial perspective, the NEG developments have been considered for the location explanations of the several sectors, since the industry until some agricultural productions, where it is possible the spatial relocation (Csonka & Fertő, 2019), passing through the production of knowledge (Hinzmann et al., 2019) or Dutch disease (Morales, 2020). The NEG approaches were, also, considered in other assessments, as the implications of the housing prices in the urban contexts (Pengfei et al., 2019), logistics activities in Brazil (Rocha & Perobelli, 2020), Portuguese transport strategies (Teixeira, 2006), capital movement management (Wiberg, 2020) and creation of urban poles in an integrated and multifactorial growth process (Yi & Yao, 2019).

Considered the framework described before, the aim of this study is to analyse the Portuguese economic dynamics and, from this scenario, discuss likely impacts from the Covid-19 contexts, considering data disaggregated at regional and municipal level. For that, it was considered the developments from the New Economic Geography, namely those related with the agglomeration phenomena and increasing returns to scale (in the base of the circular and cumulative processes).