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Economic geography : real or hype?

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  • Jun Koo
  • Lall, Somik V.

Abstract

Economic geography has become a mantra for many economists, geographers, and regional scientists. Previous studies have tested the importance of economic geography for production activities and found a significant association between them. Most of these studies, however, have not taken into account that economic geography influences location decisions at the firm level. The authors show a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Their analysis using microdata of Indian manufacturingfirms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3465.

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Date of creation: 01 Jan 2005
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Handle: RePEc:wbk:wbrwps:3465

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Keywords: Economic Theory&Research; Banks&Banking Reform; Environmental Economics&Policies; Water and Industry; Labor Policies; Economic Theory&Research; Environmental Economics&Policies; Banks&Banking Reform; Water and Industry; National Urban Development Policies&Strategies;

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Cited by:
  1. Raspe, Otto & van Oort, Frank, 2008. "Firm Growth and Localized Knowledge Externalities," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(2).
  2. Joshua Drucker, 2012. "The Spatial Extent of Agglomeration Economies: Evidence from Three U.S. Manufacturing Industries," Working Papers 12-01, Center for Economic Studies, U.S. Census Bureau.

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