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Economic geography : real or hype?

Author

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  • Jun Koo
  • Lall, Somik V.

Abstract

Economic geography has become a mantra for many economists, geographers, and regional scientists. Previous studies have tested the importance of economic geography for production activities and found a significant association between them. Most of these studies, however, have not taken into account that economic geography influences location decisions at the firm level. The authors show a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Their analysis using microdata of Indian manufacturingfirms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis.

Suggested Citation

  • Jun Koo & Lall, Somik V., 2005. "Economic geography : real or hype?," Policy Research Working Paper Series 3465, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3465
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    Cited by:

    1. Raspe, Otto & van Oort, Frank, 2008. "Firm Growth and Localized Knowledge Externalities," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(2).
    2. Joshua Drucker, 2012. "The Spatial Extent of Agglomeration Economies: Evidence from Three U.S. Manufacturing Industries," Working Papers 12-01, Center for Economic Studies, U.S. Census Bureau.

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