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Coagglomeration of formal and informal industry : evidence from India

  • Mukim, Megha

A large and growing informal sector is a major feature of developing countries. This paper analyzes coagglomeration patterns between formal and informal manufacturing enterprises in India. It studies (a) the causes underlying these patterns and (b) the positive externalities, if any, on the entry of new firms. The analysis finds that buyer-supplier and technology linkages explain much of formal-informal coagglomeration. Also, within-industry coagglomeration matters mostly to small- and medium-sized formal firm births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sector.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 6622.

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Date of creation: 01 Sep 2013
Date of revision:
Handle: RePEc:wbk:wbrwps:6622
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  1. Todd M. Gabe & Jaison R. Abel, 2013. "Shared knowledge and the coagglomeration of occupations," Staff Reports 612, Federal Reserve Bank of New York.
  2. Duranton, Gilles & Henry G Overman, 2003. "Testing for Localisation Using Micro-Geographic Data," Royal Economic Society Annual Conference 2003 69, Royal Economic Society.
  3. Barrios, Salvador & Bertinelli, Luisito & Strobl, Eric, 2003. "Coagglomeration and Growth," CEPR Discussion Papers 3969, C.E.P.R. Discussion Papers.
  4. Lall, Somik & Shalizi, Zmarak & Deichmann, Uwe, 2001. "Agglomeration economies and productivity in Indian industry," Policy Research Working Paper Series 2663, The World Bank.
  5. Ejaz Ghani & William R. Kerr & Stephen D. O'Connell, 2011. "Local Industrial Structures and Female Entrepreneurship in India," NBER Working Papers 17596, National Bureau of Economic Research, Inc.
  6. LAFOURCADE, Miren & MION, Giordano, 2003. "Concentration, spatial clustering and the size of plants : disentangling the sources of co-location externalities," CORE Discussion Papers 2003091, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Glenn Ellison & Edward L. Glaeser & William Kerr, 2007. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns," NBER Working Papers 13068, National Bureau of Economic Research, Inc.
  8. Megha Mukim, 2011. "Industry and the urge to cluster: a study of the informal sector in India," LSE Research Online Documents on Economics 33592, London School of Economics and Political Science, LSE Library.
  9. Megha Mukim & Peter Nunnenkamp, 2012. "The Location Choices of Foreign Investors: A District-level Analysis in India," The World Economy, Wiley Blackwell, vol. 35(7), pages 886-918, 07.
  10. 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.
  11. Henderson, Vernon, 2003. " The Urbanization Process and Economic Growth: The So-What Question," Journal of Economic Growth, Springer, vol. 8(1), pages 47-71, March.
  12. Dutta, Nabamita & Kar, Saibal & Roy, Sanjukta, 2011. "Informal Sector and Corruption: An Empirical Investigation for India," IZA Discussion Papers 5579, Institute for the Study of Labor (IZA).
  13. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-59, May.
  14. Rosenthal, Stuart S. & Strange, William C., 2001. "The Determinants of Agglomeration," Journal of Urban Economics, Elsevier, vol. 50(2), pages 191-229, September.
  15. Fulong Wu, 1999. "Intrametropolitan FDI firm location in Guangzhou, China A Poisson and negative binomial analysis," The Annals of Regional Science, Springer, vol. 33(4), pages 535-555.
  16. Holl, Adelheid, 2008. "Production subcontracting and location," Regional Science and Urban Economics, Elsevier, vol. 38(3), pages 299-309, May.
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