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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Main Authors:	Lall, Somik V., Koo, Jun, Chakravorty, Sanjoy
Format:	Policy Research Working Paper
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

id	okr-10986-18159
recordtype	oai_dc
spelling	okr-10986-181592021-04-23T14:03:41Z Diversity Matters : The Economic Geography of Industry Location in India Lall, Somik V. Koo, Jun Chakravorty, Sanjoy 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 GEOGRAPHY 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 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. 2014-05-05T19:01:57Z 2014-05-05T19:01:57Z 2003-06 http://documents.worldbank.org/curated/en/2003/06/2404559/diversity-matters-economic-geography-industry-location-india http://hdl.handle.net/10986/18159 English en_US Policy Research Working Paper;No. 3072 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	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 GEOGRAPHY 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
spellingShingle	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 GEOGRAPHY 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 Lall, Somik V. Koo, Jun Chakravorty, Sanjoy Diversity Matters : The Economic Geography of Industry Location in India
geographic_facet	South Asia India
relation	Policy Research Working Paper;No. 3072
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Lall, Somik V. Koo, Jun Chakravorty, Sanjoy
author_facet	Lall, Somik V. Koo, Jun Chakravorty, Sanjoy
author_sort	Lall, Somik V.
title	Diversity Matters : The Economic Geography of Industry Location in India
title_short	Diversity Matters : The Economic Geography of Industry Location in India
title_full	Diversity Matters : The Economic Geography of Industry Location in India
title_fullStr	Diversity Matters : The Economic Geography of Industry Location in India
title_full_unstemmed	Diversity Matters : The Economic Geography of Industry Location in India
title_sort	diversity matters : the economic geography of industry location in india
publisher	World Bank, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2003/06/2404559/diversity-matters-economic-geography-industry-location-india http://hdl.handle.net/10986/18159
_version_	1764439012611719168

Diversity Matters : The Economic Geography of Industry Location in India

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