New economic geography claims that administrative status of capital cities enhance process of agglomeration stimulating their economic and population growth. Availability of capital goods as well as direct and indirect demand generated by administrative institutions are among factors which accelerate development.
Most of empirical studies so far concentrates either on national capitals or on federal states. In our paper we analyse unitary state, focusing on 1998/1999 regional reform in Poland in which number of administrative regions has been reduced from 49 to 16. Applying quasi-experimental designs we check how losing status of regional capital has changed development trends of Polish cities, analysing both short- and long-term (over 15 years’ time-span) impacts.
In addition to empirical test of the main hypothesis, the paper discusses factors which may influence why change of the status is among decisive factors of development trajectory of cities in some countries, but is much less significant in others.
