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Urbanization and agglomeration benefits : gender differentiated impacts on enterprise creation in India's informal sector

  • Ghani, Ejaz
  • Kanbur, Ravi
  • O'Connell, Stephen D.

This paper presents an exploration at the intersection of four important themes in the current development discourse: urbanization, agglomeration benefits, gender and informality. Focusing on the important policy objective of new enterprise creation in the informal sector, it asks and answers four specific questions on the impact of urbanization and gender. It finds that (i) the effect of market access to inputs, on creation of new enterprises in the informal sector, is greater in more urbanized areas; (ii) This"urbanization gradient"also exists separately for the creation of female owned enterprises and male owned enterprises; (iii) there is a differential impact of female specific market access compared to male specific market access, on female owned enterprise creation in the informal sector ; and (iv) gender specific market access to inputs matters equally in more or less urbanized areas. Among the policy implications of these findings are that (i) new enterprise creation by females can be encouraged by urbanization, but (ii) the effect can be stronger by improving female specific market access, especially to inputs. The analysis in this paper opens up a rich research agenda, including further investigation of the nature of input based versus output based perspectives on agglomeration benefits, and exploration of policy instruments that can improve female specific market access, which is shown to increase female owned enterprise creation.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6553.

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Date of creation: 01 Aug 2013
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Handle: RePEc:wbk:wbrwps:6553
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  1. Edward Glaeser & William Kerr, 2008. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?," Working Papers 08-37, Center for Economic Studies, U.S. Census Bureau.
  2. 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.
  3. Ejaz Ghani & William R. Kerr & Stephen D. O'Connell, 2013. "Local industrial structures and female entrepreneurship in India," Journal of Economic Geography, Oxford University Press, vol. 13(6), pages 929-964, November.
  4. Overman, Henry G. & Venables, Anthnony J., 2010. "Evolving City Systems," Working Paper Series UNU-WIDER Working Paper W, World Institute for Development Economic Research (UNU-WIDER).
  5. Zephyr, 2010. "The city," City, Taylor & Francis Journals, vol. 14(1-2), pages 154-155, February.
  6. Jofre-Monseny, Jordi & Marín-López, Raquel & Viladecans-Marsal, Elisabet, 2011. "The mechanisms of agglomeration: Evidence from the effect of inter-industry relations on the location of new firms," Journal of Urban Economics, Elsevier, vol. 70(2-3), pages 61-74, September.
  7. Ejaz Ghani & William R. Kerr & Stephen O'Connell, 2014. "Spatial Determinants of Entrepreneurship in India," Regional Studies, Taylor & Francis Journals, vol. 48(6), pages 1071-1089, June.
  8. Ghani, Ejaz & Kanbur, Ravi, 2013. "Urbanization and (in)formalization," Policy Research Working Paper Series 6374, The World Bank.
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