Page 73 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.77, # 1, 2020, pp. 65-83

One of the main indicators of the digital environment is transaction costs. Transaction
costs, such as costs associated with the transfer of property rights from one side to
another in the exchange process, are spent on factors elimination, which hinders the
efficiency of interaction with the party-counterparts. These costs occur in an incomplete
information environment. In the initial approach, as is known, transaction costs are the
costs necessary for the functioning of the market was adopted.
In the case of the stability of urban relations, it is possible to reduce transaction costs
by increasing the flexibility of mutual relations with the parties due to compact
location. In this regard, we can say that similar processes are likely to occur in
urbanization and digital environments.

The fact that urbanization processes meet the requirements of resilience can also
eliminate a number of problems during its undesirable high pace period. For developing
countries, we think this thesis is not only an excuse to justify additional costs. Balanced
development of large cities can create an idea of perspective models of the use of
productive forces in the country. The need for the uniqueness of perspective models of
the use of productive forces arises, first of all, from the uniqueness in the economic
specialization of individual cities, the integration of activities, the division of resources
and risks. Another reason for increased attention to these models is the fact that as cities
grow, labor productivity increases here. To a certain extent, this trend is conducive to
migration to cities and large cities. On the other hand, the increased speed of
urbanization is not desirable in most cases. The role of digital technologies in solving
the issues described is growing, as it seems from advanced experience.

The rapid expansion of the coverage of the figure in the urban environment is
associated with a high pace of resource accumulation in the urban economy. It is
difficult to assess the economic results of the process of concentration of people and
people in large cities unequivocally positively in terms of social criteria. The reason
for this is, first of all, large cities have reached the limit of the ecological crisis.
Therefore, in assessing the development of the city, first of all, ecological indicators
should be used. Of course, other, especially economic and institutional aspects of
urbanization should not be ignored.

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