Explaining Local Manufacturing Growth in Chile : The Advantages of Sectoral Diversity
This paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during...
| Main Authors: | , |
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| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111201165345 http://hdl.handle.net/10986/3659 |
| Summary: | This paper investigates whether the
agglomeration of economic activity in regional clusters
affects long-run manufacturing total factor productivity
growth in an emerging market context. It explores a large
firm-level panel dataset for Chile during a period
characterized by high growth rates and rising regional
income inequality (1992-2004). The findings are clear-cut.
Locations with greater concentration of a particular sector
did not experience faster growth in total factor
productivity during this period. Rather, local sector
diversity was associated with higher long-run growth in
total factor productivity. However, there is no evidence
that the diversity effect was driven by the local
interaction with a set of suppliers and/or clients. The
authors interpret this as evidence that agglomeration
economies are driven by other factors, such as the sharing
of access to specialized inputs not provided solely by a
single sector, such as skills or financing. |
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