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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.

Suggested Citation

  • Mukim, Megha, 2013. "Coagglomeration of formal and informal industry : evidence from India," Policy Research Working Paper Series 6622, The World Bank.
  • Handle: RePEc:wbk:wbrwps:6622

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    References listed on IDEAS

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    Cited by:

    1. Mohamed Amara, 2016. "The linkages between formal and informal employment growth in Tunisia: a spatial simultaneous equations approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 56(1), pages 203-227, January.
    2. Nihar Shembavnekar, 2015. "Tariff Liberalisation, Labour Market Flexibility and Employment: Evidence from India," Working Paper Series 8115, Department of Economics, University of Sussex.
    3. Ghani, Ejaz & Kerr, William R. & Tewari, Ishani, 2014. "Regional diversity and inclusive growth in Indian cities," Policy Research Working Paper Series 6919, The World Bank.
    4. Matthew Embrey & Guillaume R. Frechette & Sevgi Yuksel, 2016. "Cooperation in the Finitely Repeated Prisoner's Dilemma," Working Paper Series 8616, Department of Economics, University of Sussex.
    5. Gilles Duranton & William R. Kerr, 2015. "The Logic of Agglomeration," NBER Working Papers 21452, National Bureau of Economic Research, Inc.
    6. Lu, Ren & Ruan, Min & Reve, Torger, 2016. "Cluster and co-located cluster effects: An empirical study of six Chinese city regions," Research Policy, Elsevier, vol. 45(10), pages 1984-1995.
    7. Ghani,Syed Ejaz & Kerr,William Robert & Segura,Alex, 2015. "Informal tradables and the employment growth of Indian manufacturing," Policy Research Working Paper Series 7206, The World Bank.

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    Microfinance; Water and Industry; Small Scale Enterprise; Industrial Management; Urban Economic Development; Competition Policy;

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