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Diversity Matters : The Economic Geography of Industry Location in India

How does economic geography influence industrial production and thereby affect industrial location decisions and the spatial distribution of development? For manufacturing industry, what are the externalities that matter, and to what extent? Are th...

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Bibliographic Details
Main Authors: Lall, Somik V., Koo, Jun, Chakravorty, Sanjoy
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
ENVIRONMENTAL ASPECTS OF ECONOMIC DEVELOPMENT
INDUSTRIAL DEVELOPMENT
GEOGRAPHIC VARIABLES
INDUSTRIAL PRODUCTION
MANUFACTURING DEVELOPMENT
ECONOMIC GEOGRAPHY
COST OF PRODUCTION FACTORS
MARKET ACCESS
URBAN CONCENTRATION
INDUSTRIAL DIVERSIFICATION
LOCATION FACTORS ACCOUNTING
ACCOUNTING PRINCIPLES
BASIC METALS
BOOK VALUE
CAPACITY BUILDING
CAPITAL GOODS
CATCHMENT AREA
COAL
CONSUMERS
DEPRECIATION
ECONOMETRIC ANALYSIS
ECONOMIC ACTIVITY
ECONOMIC ANALYSIS
ECONOMIC GROWTH
ELASTICITIES
ELASTICITY
EMPIRICAL ANALYSIS
EMPIRICAL RESEARCH
EMPIRICAL STUDIES
EMPLOYMENT
EQUILIBRIUM
EXTERNALITIES
EXTERNALITY
FACTOR DEMAND
FIXED COSTS
GROSS VALUE
IMPERFECT COMPETITION
INCREASING RETURNS
INCREASING RETURNS TO SCALE
INPUT PRICES
INTERMEDIATE GOODS
INVENTORY
LARGE CITIES
MANUFACTURING INDUSTRY
METROPOLITAN AREAS
MONOPOLISTIC COMPETITION
OIL
POLITICAL ECONOMY
POPULATION DENSITY
POSITIVE EFFECTS
PRODUCERS
PRODUCTION COSTS
PRODUCTION FUNCTION
PRODUCTIVITY
PROFIT MAXIMIZING FIRMS
PROFITABILITY
PURCHASING POWER
TOTAL OUTPUT
TRANSACTION COSTS
TRANSPORT
URBANIZATION
VALUABLE INFORMATION
VALUE ADDED
VEC
WAGES
WELFARE EFFECTS
ACCOUNTING
LOCATION FACTORS
Online Access:http://documents.worldbank.org/curated/en/2003/06/2404559/diversity-matters-economic-geography-industry-location-india
http://hdl.handle.net/10986/18159
Description
Summary:How does economic geography influence industrial production and thereby affect industrial location decisions and the spatial distribution of development? For manufacturing industry, what are the externalities that matter, and to what extent? Are these externalities spatially localized? The authors answer these questions by analyzing the influence of economic geography on the cost structure of manufacturing firms by firm size for eight industry sectors in India. The economic geography factors include market access and local and urban externalities-which are concentrations of own-industry firms, concentrations of buyer-supplier links, and industrial diversity at the district (local) level. The authors find that industrial diversity is the only economic geography variable that has a significant, consistent, and substantial cost-reducing effect for firms, particularly small firms. This finding calls into question the fundamental assumptions regarding localization economies and raises further concerns on the industrial development prospects of lagging regions in developing countries.

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