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Spatial concentration and firm-level productivity in Kazakhstan

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  • Zarina Adilkhanova

    (NAC Analytica, Nazarbayev University)

Abstract

This paper studies the effect of spatial agglomeration on firms' total factor productivity in Kazakhstan using panel data from 2009 to 2017. We employ a two-stage estimation strategy and control for endogeneity biases by making use of the GMM approach. The results suggest that productivity increases with clustering: a 10% increase in the number of employees of the neighboring firms inside the same industry increases firm-level productivity by 1.36%, while a 10% increase in the employment in other industries enhance firm performance by 1.95%. The productivity gains are higher at the 2-digit regional level rather than at the 9-digit sub-regional level of geographical aggregation, implying that the denser geography increases firms' performance more than in the observed geography.

Suggested Citation

  • Zarina Adilkhanova, 2020. "Spatial concentration and firm-level productivity in Kazakhstan," NAC Analytica Working Paper 14, NAC Analytica, Nazarbayev University, revised Apr 2021.
  • Handle: RePEc:ajx:wpaper:14
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    More about this item

    Keywords

    Agglomeration economies; Total Factor Productivity; Spatial Concentration; Clusters;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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