Advanced Search
MyIDEAS: Login

Agglomeration economies and productivity in Indian industry

Contents:

Author Info

  • Lall, Somik
  • Shalizi, Zmarak
  • Deichmann, Uwe

Abstract

"New"economic geography theory, and the development of innovative methods of analysis have renewed interest in the location, and spatial concentration of economic activities. The authors examine the extent to which agglomeration economies contribute to economic productivity. They distinguish three sources of agglomeration economies: 1) At the firm level, from improved access to market centers. 2) At the industry level, from enhanced intra-industry linkages. 3) At the regional level, from inter-industry urbanization economies. The input demand framework they use in analysis, permits the production function to be estimated jointly with a set of cost shares, and, makes allowances for non-constant returns to scale, and for agglomeration economies to be factor-augmenting. They use firm-level data for standardized manufacturing in India, together with spatially detailed physio-geographic information that considers the availability, and quality of transport networks linking urban centers - thereby accounting for heterogeneity in the density of transport networks, between different parts of the country. The sources, and magnitudes of agglomeration vary considerably between industrial sectors. Their results indicate that access to markets, through improvements in inter-regional infrastructure, is an important determinant of firm-level productivity, whereas the benefits of locating in dense urban areas, do not appear to offset the associated costs. Improving the quality, and availability of transport infrastructure, linking smaller urban areas to the rest of the inter-regional network, would improve market access for manufacturing plants. It would also give standardized manufacturing activities a chance to move out of large, costly urban centers, to lower cost secondary centers.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2001/09/28/000094946_01091504002643/Rendered/PDF/multi0page.pdf
Download Restriction: no

Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2663.

as in new window
Length:
Date of creation: 31 Aug 2001
Date of revision:
Handle: RePEc:wbk:wbrwps:2663

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

Keywords: Environmental Economics&Policies; Labor Policies; Banks&Banking Reform; Economic Theory&Research; Water and Industry; Banks&Banking Reform; Economic Theory&Research; Water and Industry; Municipal Financial Management; Environmental Economics&Policies;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Calem, Paul S. & Carlino, Gerald A., 1991. "Urban agglomeration economies in the presence of technical change," Journal of Urban Economics, Elsevier, vol. 29(1), pages 82-95, January.
  2. Feser, Edward J., 2001. "A flexible test for agglomeration economies in two US manufacturing industries," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 1-19, February.
  3. Wallsten, Scott J., 2001. "An empirical test of geographic knowledge spillovers using geographic information systems and firm-level data," Regional Science and Urban Economics, Elsevier, vol. 31(5), pages 571-599, September.
  4. Samuelson, Paul A, 1983. "Thunen at Two Hundred," Journal of Economic Literature, American Economic Association, vol. 21(4), pages 1468-88, December.
  5. Hanson, G.H., 1999. "`Market Potential, Increasing Returns, and Geographic Concentration," Working Papers 439, Research Seminar in International Economics, University of Michigan.
  6. Ellison, G. & Glaeser, E.L., 1994. "Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach," Working papers 94-27, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. Lall, Somik V. & Rodrigo, G. Chris, 2000. "Perspectives on the sources of heterogeneity in Indian industry," Policy Research Working Paper Series 2496, The World Bank.
  8. Fujita, M. & Thisse, J.-F., . "Economics of agglomeration," CORE Discussion Papers RP -1250, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  9. Fujita, Masahisa & Mori, Tomoya, 1996. "The role of ports in the making of major cities: Self-agglomeration and hub-effect," Journal of Development Economics, Elsevier, vol. 49(1), pages 93-120, April.
  10. Marshall, Alfred, 1890. "The Principles of Economics," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number marshall1890.
  11. Antonio Ciccone & Robert E. Hall, 1996. "Productivity and the Density of Economic Activity," NBER Working Papers 4313, National Bureau of Economic Research, Inc.
  12. Simon J. Evenett & Wolfgang Keller, 1996. "On Theories Explaining the Success of the Gravity Equation," International Trade 9608001, EconWPA, revised 13 Jun 1997.
  13. Kim, H Youn, 1992. "The Translog Production Function and Variable Returns to Scale," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 546-52, August.
  14. Krugman, Paul, 1998. "What's New about the New Economic Geography?," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 7-17, Summer.
  15. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
  16. Sveikauskas, Leo A, 1975. "The Productivity of Cities," The Quarterly Journal of Economics, MIT Press, vol. 89(3), pages 393-413, August.
  17. J.V. Henderson, 1972. "The Sizes and Types of Cities," Working Papers 75, Queen's University, Department of Economics.
  18. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455, October.
  19. Henderson, Vernon, 2000. "How urban concentration affects economic growth," Policy Research Working Paper Series 2326, The World Bank.
  20. Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476, December.
  21. Tabuchi, Takatoshi, 1986. "Urban agglomeration, capital augmenting technology, and labor market equilibrium," Journal of Urban Economics, Elsevier, vol. 20(2), pages 211-228, September.
  22. Duffy, Neal, 1987. "Returns to Scale Behavior and Manufacturing Agglomeration Economies in U.S. Urban Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 17(1).
  23. Greenhut, John G & Greenhut, M L, 1975. "Spatial Price Discrimination, Competition and Locational Effects," Economica, London School of Economics and Political Science, vol. 42(168), pages 401-19, November.
  24. Selting, Anne C. & Allanach, Christopher & Loveridge, Scott, 1994. "The Role Of Agglomeration Economies In Firm Location: A Review Of The Literature," Staff Papers 13321, University of Minnesota, Department of Applied Economics.
  25. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  26. Chan, M W Luke & Mountain, Dean C, 1983. "Economies of Scale and the Tornqvist Discrete Measure of Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 663-67, November.
  27. Weibull, Jorgen W., 1976. "An axiomatic approach to the measurement of accessibility," Regional Science and Urban Economics, Elsevier, vol. 6(4), pages 357-379, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2663. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.