IDEAS home Printed from https://ideas.repec.org/p/bdr/borrec/1032.html
   My bibliography  Save this paper

Firm Productivity and Cities: The Case of Colombia

Author

Listed:
  • Jorge Balat

    () (The University of Texas at Austin)

  • Camila Casas

    () (Banco de la República de Colombia)

Abstract

In this paper we study the determinants of firm-level productivity in Colombia. We are interested in the effects of agglomeration forces that explain why manufacturing economic activity tends concentrate geographically as well as the effect of forces that can hurt productivity in high-density areas. An unfortunate major example of the latter forces in Colombia is its high levels of crime and terrorist attacks. We carry out this study by exploiting two very rich data sources: a firm-level panel which allows us to estimate firm-level productivity and a panel of municipality characteristics. To address selection and endogeneity issues in the estimation of firm-level productivity we use a control function approach. Our main findings are the following. First, scale economies do not seem to affect firm-level productivity. Second, we do find evidence of location economies (industrial specialization has a positive effect on productivity). Industrial variety, on the other hand, lowers productivity. It seems that firms in Colombia benefit from forming clusters and locating in cities with less industrial variety. We also find non-trivial effects of city fiscal performance, education level and quality, and crime and violent attacks.

Suggested Citation

  • Jorge Balat & Camila Casas, 2018. "Firm Productivity and Cities: The Case of Colombia," Borradores de Economia 1032, Banco de la Republica de Colombia.
  • Handle: RePEc:bdr:borrec:1032
    as

    Download full text from publisher

    File URL: http://repositorio.banrep.gov.co/bitstream/handle/20.500.12134/6555/be_1032.pdf?sequence=1&isAllowed=y
    Download Restriction: no

    References listed on IDEAS

    as
    1. Lall, Somik V. & Shalizi, Zmarak & Deichmann, Uwe, 2004. "Agglomeration economies and productivity in Indian industry," Journal of Development Economics, Elsevier, vol. 73(2), pages 643-673, April.
    2. Valter Di Giacinto & Matteo Gomellini & Giacinto Micucci & Marcello Pagnini, 2014. "Mapping local productivity advantages in Italy: industrial districts, cities or both?," Journal of Economic Geography, Oxford University Press, vol. 14(2), pages 365-394.
    3. Hisamitsu Saito & Munisamy Gopinath, 2009. "Plants' self-selection, agglomeration economies and regional productivity in Chile," Journal of Economic Geography, Oxford University Press, vol. 9(4), pages 539-558, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Cities; Colombia; Productivity; TFP; Total Factor Productivity; Agglomeration;

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bdr:borrec:1032. 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: (Clorith Angélica Bahos Olivera). General contact details of provider: http://edirc.repec.org/data/brcgvco.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.