A key distinguishing feature of cities is that the population density is high relative to non-urban areas. Arising from this density is the frequent contact between various socioeconomic actors, which provides for the means of social interactions as well as productivity gains accrued through agglomeration economies. This collection of papers begins on the premise that social interactions underlie economic forces, which constitute the ingredients of the complex system that is the urban economy, jointly determining the outcome of cities as a whole. With such a view of the urban economy, this dissertation attempts to answer a series of key questions regarding the interface between social interactions, agglomeration economies, new firm formation, and economic growth. The first paper proposes an agent-based model of social network formation that explicitly considers space and untangles the complex relationship between social interaction dynamics and inequalities in socioeconomic resources. The second paper builds upon the insight that social interactions and economic outcomes are related and addresses the question of how social interactions and agglomeration economies jointly determine new firm formation in cities. Finally, the last paper attempts to answer the critical question of how urban economies should grow, under the premise that growth takes place through changes in industrial structure brought about by entrepreneurship in particular industries. Knowledge of the underlying mechanisms of social interactions, and how such interactions bring about new firm formation and economic growth provides for both a theoretical and empirical framework for which planning interventions can be made within the realm of community and economic development. The findings could be used to assist planners in better understanding the workings of the urban economy and inform decision making that aims to promote sustained economic growth.