What Makes Cities More Competitive? Spatial Determinants of Entrepreneurship in India
Policy makers in both developed and developing countries want to make cities more competitive, attract entreprepreneurs, boost economic growth, and promote job creation. The authors examine the spatial location of entrepreneurs in India in manufact...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/09/16739346/makes-cities-more-competitive-spatial-determinants-entrepreneurship-india http://hdl.handle.net/10986/12042 |
| Summary: | Policy makers in both developed and
developing countries want to make cities more competitive,
attract entreprepreneurs, boost economic growth, and promote
job creation. The authors examine the spatial location of
entrepreneurs in India in manufacturing and services
sectors, as well as in the formal and informal sectors, in
630 districts spread across 35 states/union territories.
They quantify entrepreneurship as young firms that are less
than three years old, and define entry measures through
employment in these new establishments. They develop metrics
that unite the incumbent industrial structures of districts
with the extent to which industries interact through the
traditional agglomeration channels. The two most consistent
factors that predict overall entrepreneurship for a district
are its education and the quality of local physical
infrastructure. These patterns are true for manufacturing
and services. These relationships are much stronger in India
than those found for the United States. The authors also
find strong evidence of agglomeration economies in
India's manufacturing sector. This influence is through
both traditional Marshallian economies like a suitable labor
force and proximity to customers and through the Chinitz
effect that emphasizes small suppliers. India's
footprints in structural transformation, urbanization, and
manufacturing sector are still at an early stage. At such
an early point and with industrial structures not yet
entrenched, local policies and traits can have profound and
lasting impacts by shaping where industries plant their roots. |
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