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...

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Main Authors:	Iimi, Atsushi, Humphreys, Richard Martin, Melibaeva, Sevara
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	BUSINESS ACTIVITIES EMPLOYMENT VEHICLE OPERATING COSTS ECONOMIC GROWTH INFRASTRUCTURE SERVICES PRODUCTION AGGLOMERATION EFFECT MATERIALS CARGO HANDLING TRANSPORT INFRASTRUCTURE GENERATION EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT POLITICAL ECONOMY ECONOMIC STRUCTURE PUBLIC INFRASTRUCTURE INDUSTRIAL DEVELOPMENT VARIABLES LOCAL CONNECTIVITY HIGHWAY SYSTEM TAX INPUTS REGISTRY LOCAL GOVERNMENT FINANCE TRANSPORTATION INFRASTRUCTURE TRANSPORT ACCESS DRIVERS COMPUTER OPEN ACCESS TRANSPORT MODES ECONOMIC ACTIVITY CHOICE VEHICLE DATA INFLUENCE TRANSPORT INVESTMENTS ROAD INFRASTRUCTURE ACCESS CARGO COSTS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM INFRASTRUCTURE PROJECT RENT CUSTOMS RAIL LINE COST OF POWER GROWTH PATH PRODUCTIVITY ECONOMETRICS EXTERNALITIES INDUSTRIALIZATION INCREASING RETURNS CRITERIA MARKETS PRIVATE INVESTMENT ELECTRICITY SUPPLY CONNECTIVITY WEB ENTERPRISES RAIL STATIONS PORTS NATURAL RESOURCES ROUTE ECONOMIC RESEARCH RESIDENTIAL USERS INFRASTRUCTURE INFRASTRUCTURE INVESTMENT MANUFACTURING USERS TECHNOLOGY ECONOMIC ZONES TRANSACTION VALUE ADDED FIRMS TRANSPORTATION MARKET POTENTIAL WAGES GLOBAL MARKET POLICIES RESULTS MARKET CONDITIONS NESTED LOGIT MODEL VALUE COMPETITIVENESS POWER FOREIGN DIRECT INVESTMENT ELECTRICITY ELASTICITIES CREDIT PRODUCT DIFFERENTIATION ACCESSIBILITY MARKET ACCESSIBILITY AGRICULTURE INFRASTRUCTURE DEVELOPMENTS MEASUREMENT TRANSACTION COSTS RAILWAY HIGHWAYS GOOD TRANSPORT ENDOGENOUS VARIABLES DIVERSIFICATION TAX REVENUE ROADS ADMINISTRATION INFRASTRUCTURE INVESTMENTS RESULT TAXATION HIGHWAY TRADE RAILWAYS INTERSTATE HIGHWAYS THEORY BUSINESSES BUSINESS INVESTMENT NETWORK AGGLOMERATION ECONOMIES POSITIVE EXTERNALITIES RAILROADS AUTOREGRESSION PERFORMANCE RAIL POLICY SUPPORT PROFIT INVESTMENTS COMMODITIES ROAD CONDITIONS ECONOMIC GEOGRAPHY DATABASE TRANSPORT COSTS VEHICLE OPERATING COMMODITY INTERNATIONAL MARKETS AGGLOMERATION PRICES AGGLOMERATION EFFECTS DEVELOPMENT POLICY HISTORIC CITIES
Online Access:	http://documents.worldbank.org/curated/en/2015/06/24637459/firms’-locational-choice-infrastructure-development-tanzania-instrumental-variable-spatial-autoregressive-model http://hdl.handle.net/10986/22178

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spelling	okr-10986-221782021-04-23T14:04:07Z Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model Iimi, Atsushi Humphreys, Richard Martin Melibaeva, Sevara BUSINESS ACTIVITIES EMPLOYMENT VEHICLE OPERATING COSTS ECONOMIC GROWTH INFRASTRUCTURE SERVICES PRODUCTION AGGLOMERATION EFFECT MATERIALS CARGO HANDLING TRANSPORT INFRASTRUCTURE GENERATION EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT POLITICAL ECONOMY ECONOMIC STRUCTURE PUBLIC INFRASTRUCTURE INDUSTRIAL DEVELOPMENT VARIABLES LOCAL CONNECTIVITY HIGHWAY SYSTEM TAX INPUTS REGISTRY LOCAL GOVERNMENT FINANCE TRANSPORTATION INFRASTRUCTURE TRANSPORT ACCESS DRIVERS COMPUTER OPEN ACCESS TRANSPORT MODES ECONOMIC ACTIVITY CHOICE VEHICLE DATA INFLUENCE TRANSPORT INVESTMENTS ROAD INFRASTRUCTURE ACCESS CARGO COSTS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM INFRASTRUCTURE PROJECT RENT CUSTOMS RAIL LINE COST OF POWER GROWTH PATH PRODUCTIVITY ECONOMETRICS EXTERNALITIES INDUSTRIALIZATION INCREASING RETURNS CRITERIA MARKETS PRIVATE INVESTMENT ELECTRICITY SUPPLY CONNECTIVITY WEB ENTERPRISES RAIL STATIONS PORTS NATURAL RESOURCES ROUTE ECONOMIC RESEARCH RESIDENTIAL USERS INFRASTRUCTURE INFRASTRUCTURE INVESTMENT MANUFACTURING USERS TECHNOLOGY ECONOMIC ZONES TRANSACTION VALUE ADDED FIRMS TRANSPORTATION MARKET POTENTIAL WAGES GLOBAL MARKET POLICIES RESULTS MARKET CONDITIONS NESTED LOGIT MODEL VALUE COMPETITIVENESS POWER FOREIGN DIRECT INVESTMENT ELECTRICITY ELASTICITIES CREDIT PRODUCT DIFFERENTIATION ACCESSIBILITY MARKET ACCESSIBILITY AGRICULTURE INFRASTRUCTURE DEVELOPMENTS MEASUREMENT TRANSACTION COSTS RAILWAY HIGHWAYS GOOD TRANSPORT ENDOGENOUS VARIABLES DIVERSIFICATION TAX REVENUE ROADS ADMINISTRATION INFRASTRUCTURE INVESTMENTS RESULT TAXATION HIGHWAY TRADE RAILWAYS INTERSTATE HIGHWAYS THEORY BUSINESSES BUSINESS INVESTMENT NETWORK AGGLOMERATION ECONOMIES POSITIVE EXTERNALITIES RAILROADS AUTOREGRESSION PERFORMANCE RAIL POLICY SUPPORT PROFIT INVESTMENTS COMMODITIES ROAD CONDITIONS ECONOMIC GEOGRAPHY DATABASE TRANSPORT COSTS VEHICLE OPERATING COMMODITY INTERNATIONAL MARKETS AGGLOMERATION PRICES AGGLOMERATION EFFECTS DEVELOPMENT POLICY HISTORIC CITIES 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. 2015-07-16T15:39:18Z 2015-07-16T15:39:18Z 2015-06 Working Paper http://documents.worldbank.org/curated/en/2015/06/24637459/firms’-locational-choice-infrastructure-development-tanzania-instrumental-variable-spatial-autoregressive-model http://hdl.handle.net/10986/22178 English en_US Policy Research Working Paper;No. 7305 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Tanzania
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	BUSINESS ACTIVITIES EMPLOYMENT VEHICLE OPERATING COSTS ECONOMIC GROWTH INFRASTRUCTURE SERVICES PRODUCTION AGGLOMERATION EFFECT MATERIALS CARGO HANDLING TRANSPORT INFRASTRUCTURE GENERATION EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT POLITICAL ECONOMY ECONOMIC STRUCTURE PUBLIC INFRASTRUCTURE INDUSTRIAL DEVELOPMENT VARIABLES LOCAL CONNECTIVITY HIGHWAY SYSTEM TAX INPUTS REGISTRY LOCAL GOVERNMENT FINANCE TRANSPORTATION INFRASTRUCTURE TRANSPORT ACCESS DRIVERS COMPUTER OPEN ACCESS TRANSPORT MODES ECONOMIC ACTIVITY CHOICE VEHICLE DATA INFLUENCE TRANSPORT INVESTMENTS ROAD INFRASTRUCTURE ACCESS CARGO COSTS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM INFRASTRUCTURE PROJECT RENT CUSTOMS RAIL LINE COST OF POWER GROWTH PATH PRODUCTIVITY ECONOMETRICS EXTERNALITIES INDUSTRIALIZATION INCREASING RETURNS CRITERIA MARKETS PRIVATE INVESTMENT ELECTRICITY SUPPLY CONNECTIVITY WEB ENTERPRISES RAIL STATIONS PORTS NATURAL RESOURCES ROUTE ECONOMIC RESEARCH RESIDENTIAL USERS INFRASTRUCTURE INFRASTRUCTURE INVESTMENT MANUFACTURING USERS TECHNOLOGY ECONOMIC ZONES TRANSACTION VALUE ADDED FIRMS TRANSPORTATION MARKET POTENTIAL WAGES GLOBAL MARKET POLICIES RESULTS MARKET CONDITIONS NESTED LOGIT MODEL VALUE COMPETITIVENESS POWER FOREIGN DIRECT INVESTMENT ELECTRICITY ELASTICITIES CREDIT PRODUCT DIFFERENTIATION ACCESSIBILITY MARKET ACCESSIBILITY AGRICULTURE INFRASTRUCTURE DEVELOPMENTS MEASUREMENT TRANSACTION COSTS RAILWAY HIGHWAYS GOOD TRANSPORT ENDOGENOUS VARIABLES DIVERSIFICATION TAX REVENUE ROADS ADMINISTRATION INFRASTRUCTURE INVESTMENTS RESULT TAXATION HIGHWAY TRADE RAILWAYS INTERSTATE HIGHWAYS THEORY BUSINESSES BUSINESS INVESTMENT NETWORK AGGLOMERATION ECONOMIES POSITIVE EXTERNALITIES RAILROADS AUTOREGRESSION PERFORMANCE RAIL POLICY SUPPORT PROFIT INVESTMENTS COMMODITIES ROAD CONDITIONS ECONOMIC GEOGRAPHY DATABASE TRANSPORT COSTS VEHICLE OPERATING COMMODITY INTERNATIONAL MARKETS AGGLOMERATION PRICES AGGLOMERATION EFFECTS DEVELOPMENT POLICY HISTORIC CITIES
spellingShingle	BUSINESS ACTIVITIES EMPLOYMENT VEHICLE OPERATING COSTS ECONOMIC GROWTH INFRASTRUCTURE SERVICES PRODUCTION AGGLOMERATION EFFECT MATERIALS CARGO HANDLING TRANSPORT INFRASTRUCTURE GENERATION EXPORTS ELASTICITY INFRASTRUCTURE DEVELOPMENT POLITICAL ECONOMY ECONOMIC STRUCTURE PUBLIC INFRASTRUCTURE INDUSTRIAL DEVELOPMENT VARIABLES LOCAL CONNECTIVITY HIGHWAY SYSTEM TAX INPUTS REGISTRY LOCAL GOVERNMENT FINANCE TRANSPORTATION INFRASTRUCTURE TRANSPORT ACCESS DRIVERS COMPUTER OPEN ACCESS TRANSPORT MODES ECONOMIC ACTIVITY CHOICE VEHICLE DATA INFLUENCE TRANSPORT INVESTMENTS ROAD INFRASTRUCTURE ACCESS CARGO COSTS ROAD NETWORK TRANSPORT INTERSTATE HIGHWAY SYSTEM INFRASTRUCTURE PROJECT RENT CUSTOMS RAIL LINE COST OF POWER GROWTH PATH PRODUCTIVITY ECONOMETRICS EXTERNALITIES INDUSTRIALIZATION INCREASING RETURNS CRITERIA MARKETS PRIVATE INVESTMENT ELECTRICITY SUPPLY CONNECTIVITY WEB ENTERPRISES RAIL STATIONS PORTS NATURAL RESOURCES ROUTE ECONOMIC RESEARCH RESIDENTIAL USERS INFRASTRUCTURE INFRASTRUCTURE INVESTMENT MANUFACTURING USERS TECHNOLOGY ECONOMIC ZONES TRANSACTION VALUE ADDED FIRMS TRANSPORTATION MARKET POTENTIAL WAGES GLOBAL MARKET POLICIES RESULTS MARKET CONDITIONS NESTED LOGIT MODEL VALUE COMPETITIVENESS POWER FOREIGN DIRECT INVESTMENT ELECTRICITY ELASTICITIES CREDIT PRODUCT DIFFERENTIATION ACCESSIBILITY MARKET ACCESSIBILITY AGRICULTURE INFRASTRUCTURE DEVELOPMENTS MEASUREMENT TRANSACTION COSTS RAILWAY HIGHWAYS GOOD TRANSPORT ENDOGENOUS VARIABLES DIVERSIFICATION TAX REVENUE ROADS ADMINISTRATION INFRASTRUCTURE INVESTMENTS RESULT TAXATION HIGHWAY TRADE RAILWAYS INTERSTATE HIGHWAYS THEORY BUSINESSES BUSINESS INVESTMENT NETWORK AGGLOMERATION ECONOMIES POSITIVE EXTERNALITIES RAILROADS AUTOREGRESSION PERFORMANCE RAIL POLICY SUPPORT PROFIT INVESTMENTS COMMODITIES ROAD CONDITIONS ECONOMIC GEOGRAPHY DATABASE TRANSPORT COSTS VEHICLE OPERATING COMMODITY INTERNATIONAL MARKETS AGGLOMERATION PRICES AGGLOMERATION EFFECTS DEVELOPMENT POLICY HISTORIC CITIES Iimi, Atsushi Humphreys, Richard Martin Melibaeva, Sevara Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
geographic_facet	Africa Tanzania
relation	Policy Research Working Paper;No. 7305
description	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.
format	Working Paper
author	Iimi, Atsushi Humphreys, Richard Martin Melibaeva, Sevara
author_facet	Iimi, Atsushi Humphreys, Richard Martin Melibaeva, Sevara
author_sort	Iimi, Atsushi
title	Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
title_short	Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
title_full	Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
title_fullStr	Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
title_full_unstemmed	Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model
title_sort	firms’ locational choice and infrastructure development in tanzania : instrumental variable spatial autoregressive model
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/06/24637459/firms’-locational-choice-infrastructure-development-tanzania-instrumental-variable-spatial-autoregressive-model http://hdl.handle.net/10986/22178
_version_	1764450362173947904

Firms’ Locational Choice and Infrastructure Development in Tanzania : Instrumental Variable Spatial Autoregressive Model

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