Firms? locational choice and infrastructure development in Tanzania : instrumental variable spatial autoregressive model
Agglomeration economies are among the most important factors in increasing firm productivity. However, there is little evidence supportive of this in Africa. Using the firm registry database in Tanzania, this paper examines a new application of the logit approach with two empirical issues taken into account: spatial autocorrelation and endogeneity of infrastructure placement. The paper finds significant agglomeration economies. It is also found that firms are more likely to be located where local connectivity and access to markets are good. The paper finds that dealing with infrastructure endogeneity and spatial autocorrelation in the empirical model is important. According to the exogeneity test, infrastructure variables are likely endogenous. The spatial autoregressive term is significant. As expected, therefore, there are positive externalities of firm location choice around the neighboring areas.
|Date of creation:||15 Jun 2015|
|Contact details of provider:|| Postal: 1818 H Street, N.W., Washington, DC 20433|
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- F Boudier-Bensebaa, 2005. "Agglomeration economies and location choice: Foreign direct investment in Hungary," Post-Print hal-00693147, HAL.
- Arvil V. Adams & Sara Johansson de Silva & Setareh Razmara, 2013. "Improving Skills Development in the Informal Sector : Strategies for Sub-Saharan Africa," World Bank Publications, The World Bank, number 15802, January.
- Ki-Dong Lee & Seok-Joon Hwang & Min-hwan Lee, 2012. "Agglomeration economies and location choice of Korean manufacturers within the United States," Applied Economics, Taylor & Francis Journals, vol. 44(2), pages 189-200, January.
- Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2012.
"Do agglomeration economies reduce the sensitivity of firm location to tax differentials?,"
Royal Economic Society, vol. 122(563), pages 1069-1093, September.
- Marius BRÜLHART & Mario JAMETTI & Kurt SCHMIDHEINY, 2007. "Do Agglomeration Economies Reduce the Sensitivity of Firm Location to Tax Differentials?," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 07.13, Université de Lausanne, Faculté des HEC, DEEP.
- Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2007. "Do agglomeration economies reduce the sensitivity of firm location to tax differentials?," Economics Working Papers 1062, Department of Economics and Business, Universitat Pompeu Fabra.
- Brülhart, Marius & Jametti, Mario & Schmidheiny, Kurt, 2007. "Do Agglomeration Economies Reduce the Sensitivity of Firm Location to Tax Differentials?," CEPR Discussion Papers 6606, C.E.P.R. Discussion Papers.
- Mario Jametti & Marius Brülhart & Kurt Schmidheiny, 2007. "Do Agglomeration Economies Reduce the Sensitivity of Firm Location to Tax Differentials?," Working Papers 2007_9, York University, Department of Economics.
- Chandra, Amitabh & Thompson, Eric, 2000. "Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 457-490, July.
- Milner, Chris & Reed, Geoff & Talerngsri, Pawin, 2006. "Vertical linkages and agglomeration effects in Japanese FDI in Thailand," Journal of the Japanese and International Economies, Elsevier, vol. 20(2), pages 193-208, June.
- Cieslik, Andrzej & Ryan, Michael, 2004. "Explaining Japanese direct investment flows into an enlarged Europe: A comparison of gravity and economic potential approaches," Journal of the Japanese and International Economies, Elsevier, vol. 18(1), pages 12-37, March.
- Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
- Belderbos, Rene & Carree, Martin, 2002.
"The Location of Japanese Investments in China: Agglomeration Effects, Keiretsu, and Firm Heterogeneity,"
Journal of the Japanese and International Economies,
Elsevier, vol. 16(2), pages 194-211, June.
- Belderbos,R. & Carree,M., 2000. "The Location of Japanese Investments in China: Agglomeration Effects, Keiretsu, and Firm Heterogeneity," Research Memorandum 002, Maastricht University, Netherlands Institute of Business Organization and Strategy Research (NIBOR).
- Steven T. Berry, 1994. "Estimating Discrete-Choice Models of Product Differentiation," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 242-262, Summer.
- Maré, David C. & Graham, Daniel J., 2013.
"Agglomeration elasticities and firm heterogeneity,"
Journal of Urban Economics,
Elsevier, vol. 75(C), pages 44-56.
- Graham, Daniel J. & Maré, David C., 2010. "Agglomeration elasticities and firm heterogeneity," LSE Research Online Documents on Economics 33505, London School of Economics and Political Science, LSE Library.
- Daniel J. Graham & David C. Maré, 2010. "Agglomeration Elasticities and Firm Heterogeneity," SERC Discussion Papers 0043, Spatial Economics Research Centre, LSE.
- Vivien Procher, 2011. "Agglomeration effects and the location of FDI: evidence from French first-time movers," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(2), pages 295-312, April.
- Shahid Yusuf & Kaoru Nabeshima & Shoichi Yamashita, 2008. "Growing Industrial Clusters in Asia : Serendipity and Science," World Bank Publications, The World Bank, number 6429, January.
- Deichmann, Uwe & Kaiser, Kai & Lall, Somik V & Shalizi, Zmarak, 2005. "Agglomeration, transport, and regional development in Indonesia," Policy Research Working Paper Series 3477, The World Bank.
- Fabienne Boudier-Bensebaa, 2005. "Agglomeration economies and location choice: "Foreign direct investment in Hungary" -super-1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 13(4), pages 605-628, October.
- Hinh T. Dinh & Vincent Palmade & Vandana Chandra & Frances Cossar, 2012.
"Light Manufacturing in Africa : Targeted Policies to Enhance Private Investment and Create Jobs
[L’industrie légère en Afrique : Politiques ciblées pour susciter l’investissement privé et créer des," World Bank Publications, The World Bank, number 2245, January.
- David M. Drukker & Ingmar Prucha & Rafal Raciborski, 2013. "A command for estimating spatial-autoregressive models with spatial-autoregressive disturbances and additional endogenous variables," Stata Journal, StataCorp LP, vol. 13(2), pages 287-301, June.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:7305. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.