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Estimating Urban Agglomeration Economies for India: A New Economic Geography Perspective

  • Tripathi, Sabyasachi

The main objective of this paper is to provide answer to an important question: Are Indian firms or industries in urban areas operating under decreasing returns to scale or increasing returns to scale? Scale economies are one of the main assumptions of new economic geography models that posit the formation of agglomeration economies. For this purpose, we use Kanemoto et al. (1996) model for estimation of aggregate production function and to derive the magnitude of scale economies. Using firm level data in 2004-05 from the Annual Survey of Industry, we find that urban firms in Indian industry operate under decreasing returns to scale.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 43501.

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Date of creation: Dec 2012
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Handle: RePEc:pra:mprapa:43501
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  7. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
  8. Rullan Rinaldi & Eva Nurwita, 2011. "Rise And Fall Of Cities, Measuring Spatial Clustering And Economies Of Urban Agglomeration In West Java," Working Papers in Economics and Development Studies (WoPEDS) 201104, Department of Economics, Padjadjaran University, revised Jun 2011.
  9. Sanjoy Chakravorty, 2003. "Industrial location in post-reform India: patterns of inter-regional divergence and intra-regional convergence," Journal of Development Studies, Taylor & Francis Journals, vol. 40(2), pages 120-152.
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