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Spatial Determinants of Entrepreneurship in India

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  • Ejaz Ghani
  • William R. Kerr
  • Stephen D. O'Connell

Abstract

We analyze the spatial determinants of entrepreneurship in India in the manufacturing and services sectors. Among general district traits, quality of physical infrastructure and workforce education are the strongest predictors of entry, with labor laws and household banking quality also playing important roles. Looking at the district-industry level, we find extensive evidence of agglomeration economies among manufacturing industries. In particular, supportive incumbent industrial structures for input and output markets are strongly linked to higher establishment entry rates. We also find substantial evidence for the Chinitz effect where small local incumbent suppliers encourage entry. The importance of agglomeration economies for entry hold when considering changes in India’s incumbent industry structures from 1989, determined before large-scale deregulation began, to 2005.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17514.

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Date of creation: Oct 2011
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Publication status: published as Ghani, Ejaz, William R. Kerr, and Stephen O'Connell. "Spatial Determinants of Entrepreneurship in India." Special Issue on Entrepreneurship in a Regional Context . Regional Studies 48, no. 6 (December 2013).
Handle: RePEc:nbr:nberwo:17514

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References

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  7. Ant Bozkaya & William R. Kerr, 2009. "Labor Regulations and European Private Equity," NBER Working Papers 15627, National Bureau of Economic Research, Inc.
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  14. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  15. Desmet, Klaus & Ghani, Ejaz & O'Connell, Stephen & Rossi-Hansberg, Esteban, 2012. "The spatial development of India," Policy Research Working Paper Series 6060, The World Bank.
  16. Silvia Ardagna & Annamaria Lusardi, 2008. "Explaining International Differences in Entrepreneurship: The Role of Individual Characteristics and Regulatory Constraints," NBER Working Papers 14012, National Bureau of Economic Research, Inc.
  17. Fernandes, Ana M. & Sharma, Gunjan, 2012. "Together we stand ? agglomeration in Indian manufacturing," Policy Research Working Paper Series 6062, The World Bank.
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Citations

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Cited by:
  1. Quatraro, Francesco & Vivarelli, Marco, 2013. "Drivers of Entrepreneurship and Post-Entry Performance of Newborn Firms in Developing Countries," IZA Discussion Papers 7436, Institute for the Study of Labor (IZA).
  2. Glaeser, Edward & Joshi-Ghani, Abha, 2013. "Rethinking Cities: Toward Shared Prosperity," World Bank - Economic Premise, The World Bank, issue 126, pages 1-14, October.
  3. Ghani, Ejaz & O'Connell, Stephen D. & Sharma, Gunjan, 2013. "Friend or foe or family ? a tale of formal and informal plants in India," Policy Research Working Paper Series 6588, The World Bank.
  4. Glaeser, Edward & Joshi-Ghani, Abha, 2014. "Overview -- the urban imperative : toward shared prosperity," Policy Research Working Paper Series 6875, The World Bank.
  5. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2012. "Is India's manufacturing sector moving away from cities ?," Policy Research Working Paper Series 6271, The World Bank.
  6. Ghani, Ejaz & o'Connell, Stephen D. & Kerr, William R., 2014. "What Makes Cities More Competitive? Lessons from India," World Bank - Economic Premise, The World Bank, issue 132, pages 1-4, January.
  7. Desmet, Klaus & Ghani, Ejaz & O'Connell, Stephen D & Rossi-Hansberg, Esteban, 2013. "The Spatial Development of India," CEPR Discussion Papers 9433, C.E.P.R. Discussion Papers.
  8. Vivarelli, Marco, 2012. "Drivers of entrepreneurship and post-entry performance : microeconomic evidence from advanced and developing countries," Policy Research Working Paper Series 6245, The World Bank.
  9. Ghani, Ejaz & Kanbur, Ravi, 2013. "Urbanization and (in)formalization," Policy Research Working Paper Series 6374, The World Bank.
  10. Calá, Carla Daniela & Arauzo-Carod, Josep-Maria & Manjón-Antolín, Miguel, 2012. "Regional determinants of firm entry in a developing country," Nülan. Deposited Documents 1626, Centro de Documentación, Facultad de Ciencias Económicas y Sociales, Universidad Nacional de Mar del Plata.
  11. Moreno-Monroy, Ana Isabel & Pieters, Janneke & Erumban, Abdul Azeez, 2012. "Subcontracting and the Size and Composition of the Informal Sector: Evidence from Indian Manufacturing," IZA Discussion Papers 6785, Institute for the Study of Labor (IZA).
  12. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2012. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," NBER Working Papers 18524, National Bureau of Economic Research, Inc.
  13. Ghani, Ejaz & Kerr, William R. & O'Connell, Stephen D., 2013. "Female business ownership and informal sector persistence," Policy Research Working Paper Series 6612, The World Bank.
  14. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
  15. Quatraro, Francesco & Vivarelli, Marco, 2013. "Entrepreneurship In A Developing Country Context," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201314, University of Turin.
  16. Mukim, Megha, 2013. "Coagglomeration of formal and informal industry : evidence from India," Policy Research Working Paper Series 6622, The World Bank.
  17. Marco Vivarelli, 2013. "Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries," Industrial and Corporate Change, Oxford University Press, vol. 22(6), pages 1453-1495, December.
  18. Vivarelli, Marco, 2012. "Entrepreneurship in Advanced and Developing Countries: A Microeconomic Perspective," IZA Discussion Papers 6513, Institute for the Study of Labor (IZA).
  19. Francesco Quatraro & Marco Vivarelli, 2013. "Entry and Post-Entry Dynamics in Developing Countries," GREDEG Working Papers 2013-20, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  20. Ghani, Ejaz & Kanbur, Ravi & O'Connell, Stephen D., 2013. "Urbanization and agglomeration benefits : gender differentiated impacts on enterprise creation in India's informal sector," Policy Research Working Paper Series 6553, The World Bank.

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