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The Effects of Agglomeration on the Formation and Scale of Operation of New Firms

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  • Maryiam Haroon

    ()
    (Lahore School of Economics, Lahore, Pakistan.)

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    Abstract

    The formation of new firms is an important determinant of economic and regional development. The literature on industrial organization highlights agglomeration as one of the main factors enhancing the formation and scale of operation of new firms. Using data from the Directory of Industries, this study estimates a model that determines the effect of local conditions on new firms’ formation and scale of operation in the manufacturing sector in Punjab, Pakistan. Our findings reveal that agglomeration through localization and urbanization has a strong impact on the formation of new firms and their scale of operation.

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    File URL: http://121.52.153.179/JOURNAL/Working%20Papers/Working%20Paper%20Series%20No.%2003-13%20complete.pdf
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    Bibliographic Info

    Paper provided by Centre for Research in Economics and Business, The Lahore School of Economics in its series CREB Working papers with number 3-2013.

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    Length: 23 pages
    Date of creation: 2013
    Date of revision: 2013
    Handle: RePEc:lje:wpaper:3-2013

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    1. Octávio Figueiredo & Paulo Guimarães & Douglas Woodward, 2009. "Localization economies and establishment size: was Marshall right after all? -super-†," Journal of Economic Geography, Oxford University Press, vol. 9(6), pages 853-868, November.
    2. Soubeyran, A. & Thisse, J.-F., 1998. "Learning-by-Doing and the Development of Industrial Districts," G.R.E.Q.A.M. 98a26, Universite Aix-Marseille III.
    3. André van Stel & Niels Bosma & Kashifa Suddle, 2006. "The Geography of New Firm Formation: Evidence from Independent Start-ups and New Subsidiaries in the Netherlands," Scales Research Reports H200615, EIM Business and Policy Research.
    4. Akihiro Otsuka, 2008. "Determinants of new firm formation in Japan: A comparison of the manufacturing and service sectors," Economics Bulletin, AccessEcon, vol. 18(5), pages 1-7.
    5. Helsley, Robert W. & Strange, William C., 2002. "Innovation and Input Sharing," Journal of Urban Economics, Elsevier, vol. 51(1), pages 25-45, January.
    6. Ota, Mitsuru & Fujita, Masahisa, 1993. "Communication technologies and spatial organization of multi-unit firms in metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 695-729, December.
    7. repec:ebl:ecbull:v:18:y:2008:i:5:p:1-7 is not listed on IDEAS
    8. Edward L. Glaeser & William R. Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Harvard Business School Working Papers 09-055, Harvard Business School.
    9. Stuart S. Rosenthal & William C. Strange, 2010. "Small Establishments/Big Effects: Agglomeration, Industrial Organization and Entrepreneurship," NBER Chapters, in: Agglomeration Economics, pages 277-302 National Bureau of Economic Research, Inc.
    10. Mercedes Delgado & Michael E. Porter & Scott Stern, 2010. "Clusters and entrepreneurship," Journal of Economic Geography, Oxford University Press, vol. 10(4), pages 495-518, July.
    11. Glenn Ellison & Edward L. Glaeser, 1999. "The Geographic Concentration of Industry: Does Natural Advantage Explain Agglomeration?," Harvard Institute of Economic Research Working Papers 1862, Harvard - Institute of Economic Research.
    12. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
    13. Mercedes Delgado & Michael Porter & Scott Stern, 2010. "Clusters and Entrepreneurship," Working Papers 10-31, Center for Economic Studies, U.S. Census Bureau.
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