Explaining local manufacturing growth in Chile : the advantages of sectoral diversity
AbstractThis paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during a period characterized by high growth rates and rising regional income inequality (1992-2004). The findings are clear-cut. Locations with greater concentration of a particular sector did not experience faster growth in total factor productivity during this period. Rather, local sector diversity was associated with higher long-run growth in total factor productivity. However, there is no evidence that the diversity effect was driven by the local interaction with a set of suppliers and/or clients. The authors interpret this as evidence that agglomeration economies are driven by other factors, such as the sharing of access to specialized inputs not provided solely by a single sector, such as skills or financing.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5891.
Date of creation: 01 Dec 2011
Date of revision:
Labor Policies; Economic Theory&Research; Economic Growth; Political Economy; Achieving Shared Growth;
Other versions of this item:
- Rita Almeida & Ana M. Fernandes, 2013. "Explaining local manufacturing growth in Chile: the advantages of sectoral diversity," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2201-2213, June.
- NEP-ALL-2011-12-13 (All new papers)
- NEP-GEO-2011-12-13 (Economic Geography)
- NEP-URE-2011-12-13 (Urban & Real Estate Economics)
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