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Coagglomeration of formal and informal industry : evidence from India

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  • Mukim, Megha

Abstract

A large and growing informal sector is a major feature of developing countries. This paper analyzes coagglomeration patterns between formal and informal manufacturing enterprises in India. It studies (a) the causes underlying these patterns and (b) the positive externalities, if any, on the entry of new firms. The analysis finds that buyer-supplier and technology linkages explain much of formal-informal coagglomeration. Also, within-industry coagglomeration matters mostly to small- and medium-sized formal firm births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sector.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6622.

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Date of creation: 01 Sep 2013
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Handle: RePEc:wbk:wbrwps:6622

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Keywords: Microfinance; Water and Industry; Small Scale Enterprise; Industrial Management; Urban Economic Development; Competition Policy;

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  1. Venables, Anthony J., 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  2. Ejaz Ghani & William R. Kerr & Stephen D. O'Connell, 2011. "Local Industrial Structures and Female Entrepreneurship in India," NBER Working Papers 17596, National Bureau of Economic Research, Inc.
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  7. Megha Mukim, 2011. "Industry and the Urge to Cluster: A Study of the Informal Sector in India," SERC Discussion Papers 0072, Spatial Economics Research Centre, LSE.
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  10. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
  11. Megha Mukim & Peter Nunnenkamp, 2010. "The Location Choices of Foreign Investors: A District-level Analysis in India," Kiel Working Papers 1628, Kiel Institute for the World Economy.
  12. Holl, Adelheid, 2008. "Production subcontracting and location," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 299-309, May.
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  15. LAFOURCADE, Miren & MION, Giordano, 2003. "Concentration, spatial clustering and the size of plants : disentangling the sources of co-location externalities," CORE Discussion Papers 2003091, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. Ghani, Ejaz & Kerr, William R. & Tewari, Ishani, 2014. "Regional diversity and inclusive growth in Indian cities," Policy Research Working Paper Series 6919, The World Bank.

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