Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data

Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data

Recent literature suggests that the positive impact of population density on wages, the canonical measure of agglomeration effects, is multiples higher in developing countries than in advanced economies. This poses an urban productivity puzzle beca...

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Bibliographic Details
Main Authors: Grover, Arti, Maloney, William, F.
Format: Policy Research Working Paper
Language:English
Published: World Bank, Washington, DC 2022
Subjects:
AGGLOMERATION
PRODUCTIVITY
CITIES STRUCTURAL TRANSFORMATION
CITY
URBAN LABOR MARKET
URBAN POPULATION DENSITY
WAGE ELASTICITY
WAGE PRESSURE DATA
Online Access:http://documents.worldbank.org/curated/en/647331647886638218/Proximity-without-Productivity-Agglomeration-Effects-with-Plant-Level-Output-and-Price-Data
http://hdl.handle.net/10986/37199
id okr-10986-37199
recordtype oai_dc
spelling okr-10986-371992022-03-24T05:10:49Z Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data Grover, Arti Maloney, William, F. AGGLOMERATION PRODUCTIVITY CITIES STRUCTURAL TRANSFORMATION CITY URBAN LABOR MARKET URBAN POPULATION DENSITY WAGE ELASTICITY WAGE PRESSURE DATA Recent literature suggests that the positive impact of population density on wages, the canonical measure of agglomeration effects, is multiples higher in developing countries than in advanced economies. This poses an urban productivity puzzle because on-the-ground observations do not suggest that cities in developing countries function especially well or are conducive to enhanced productivity. This paper uses manufacturing censuses from four countries at differing levels of income that allow separating plant output quantity from prices. It shows that higher wage elasticities with respect to density are due to higher marginal costs, and agglomeration elasticities of efficiency, physical total factor productivity, are in fact far lower in developing countries. Further, congestion costs decrease with country income. Both are consistent with often low rates of structural transformation that make cities in developing countries so-called “sterile agglomerations,” which are populous but not efficient. 2022-03-23T16:07:52Z 2022-03-23T16:07:52Z 2022-03 http://documents.worldbank.org/curated/en/647331647886638218/Proximity-without-Productivity-Agglomeration-Effects-with-Plant-Level-Output-and-Price-Data http://hdl.handle.net/10986/37199 English Policy Research Working Paper;9977 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Policy Research Working Paper Publications & Research Africa Africa Eastern and Southern (AFE) Africa Western and Central (AFW) East Asia and Pacific Europe and Central Asia Latin America & Caribbean Middle East and North Africa South Asia
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic AGGLOMERATION
PRODUCTIVITY
CITIES STRUCTURAL TRANSFORMATION
CITY
URBAN LABOR MARKET
URBAN POPULATION DENSITY
WAGE ELASTICITY
WAGE PRESSURE DATA
spellingShingle AGGLOMERATION
PRODUCTIVITY
CITIES STRUCTURAL TRANSFORMATION
CITY
URBAN LABOR MARKET
URBAN POPULATION DENSITY
WAGE ELASTICITY
WAGE PRESSURE DATA
Grover, Arti
Maloney, William, F.
Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
geographic_facet Africa
Africa Eastern and Southern (AFE)
Africa Western and Central (AFW)
East Asia and Pacific
Europe and Central Asia
Latin America & Caribbean
Middle East and North Africa
South Asia
relation Policy Research Working Paper;9977
description Recent literature suggests that the positive impact of population density on wages, the canonical measure of agglomeration effects, is multiples higher in developing countries than in advanced economies. This poses an urban productivity puzzle because on-the-ground observations do not suggest that cities in developing countries function especially well or are conducive to enhanced productivity. This paper uses manufacturing censuses from four countries at differing levels of income that allow separating plant output quantity from prices. It shows that higher wage elasticities with respect to density are due to higher marginal costs, and agglomeration elasticities of efficiency, physical total factor productivity, are in fact far lower in developing countries. Further, congestion costs decrease with country income. Both are consistent with often low rates of structural transformation that make cities in developing countries so-called “sterile agglomerations,” which are populous but not efficient.
format Policy Research Working Paper
author Grover, Arti
Maloney, William, F.
author_facet Grover, Arti
Maloney, William, F.
author_sort Grover, Arti
title Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
title_short Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
title_full Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
title_fullStr Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
title_full_unstemmed Proximity without Productivity : Agglomeration Effects with Plant-Level Output and Price Data
title_sort proximity without productivity : agglomeration effects with plant-level output and price data
publisher World Bank, Washington, DC
publishDate 2022
url http://documents.worldbank.org/curated/en/647331647886638218/Proximity-without-Productivity-Agglomeration-Effects-with-Plant-Level-Output-and-Price-Data
http://hdl.handle.net/10986/37199
_version_ 1764486708049477632

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