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Total Factor Productivity Growth and Urbanization Economies: A Case of Indian Industries

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  • Arup Mitra

Abstract

Based on panel data for fifteen major states in India, this paper provides evidence in favor of the existence of urbanization economies. In eleven of seventeen two†digit industry groups, total factor productivity growth is responsive to urban population or industrial spread. Although the impact of these variables taken to capture agglomeration economies on total factor productivity growth is not monotonic, economic policy would yield a sub†optimal outcome by ignoring the positive effect of the size factor. Urban population or industrial spread benefits firms by possibly improving the quality of labor and enhancing the productive utilization of resources.

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  • Arup Mitra, 2000. "Total Factor Productivity Growth and Urbanization Economies: A Case of Indian Industries," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 12(2), pages 97-108, July.
    • Handle: RePEc:bla:revurb:v:12:y:2000:i:2:p:97-108
    DOI: 10.1111/1467-940X.00023
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    Cited by:

    1. Agarwalla, Astha, 2011. "Agglomeration Economies and Productivity Growth in India," IIMA Working Papers WP2011-01-08, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Maurice Catin & Christophe Van Huffel, 2003. "Concentration urbaine et industrialisation," Mondes en développement, De Boeck Université, vol. 121(1), pages 87-107.
    3. Tripathi, Sabyasachi & Mitra, Arup, 2022. "Shedding light on unnoticed gems in India: A small town’s growth perspective," Land Use Policy, Elsevier, vol. 120(C).
    4. Muttur Ranganathan Narayana, 2008. "Globalization and Urban Growth: Evidence for Bangalore (India)," CIRJE F-Series CIRJE-F-544, CIRJE, Faculty of Economics, University of Tokyo.
    5. Arup Mitra, 2011. "Urbanization in India: Evidence on Agglomeration Economies," Working Papers id:4394, eSocialSciences.
    6. Akihiro Otsuka, 2017. "Regional determinants of total factor productivity in Japan: stochastic frontier analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 579-596, May.
    7. Akihiro Otsuka & Mika Goto & Toshiyuki Sueyoshi, 2010. "Industrial agglomeration effects in Japan: Productive efficiency, market access, and public fiscal transfer," Papers in Regional Science, Wiley Blackwell, vol. 89(4), pages 819-840, November.
    8. Henry Overman & Anthony J. Venables, 2005. "Cities in the Developing World," CEP Discussion Papers dp0695, Centre for Economic Performance, LSE.
    9. John M. Quigley, 2008. "Urbanization, Agglomeration, and Economic Development," World Bank Publications - Books, The World Bank Group, number 28042, December.
    10. Akihiro Otsuka, 2020. "How do population agglomeration and interregional networks improve energy efficiency?," Asia-Pacific Journal of Regional Science, Springer, vol. 4(1), pages 1-25, February.
    11. Henry G. Overman & Anthony J. Venables, 2010. "Evolving City Systems," WIDER Working Paper Series wp-2010-026, World Institute for Development Economic Research (UNU-WIDER).
    12. SHARMA Anand, 2017. "Dynamic Externalities And Regional Manufacturing Growth: Evidence From India," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 12(1), pages 185-201, April.
    13. Akihiro Otsuka & Mika Goto, 2015. "Agglomeration economies in Japanese industries: the Solow residual approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 54(2), pages 401-416, March.
    14. Ng, Choy Peng & Law, Teik Hua & Jakarni, Fauzan Mohd & Kulanthayan, S., 2018. "Relative improvements in road mobility as compared to improvements in road accessibility and urban growth: A panel data analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 117(C), pages 292-301.
    15. Tie-Ying Liu & Chi Wei Su & Xu-Zhao Jiang, 2015. "Is economic growth improving urbanisation? A cross-regional study of China," Urban Studies, Urban Studies Journal Limited, vol. 52(10), pages 1883-1898, August.
    16. Overman, Henry G. & Venables, Anthnony J., 2010. "Evolving City Systems," WIDER Working Paper Series 026, World Institute for Development Economic Research (UNU-WIDER).

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