Agglomeration, Transport, and Regional Development in Indonesia

How effective are public interventions in addressing significant regional disparities in formal manufacturing concentration in a developing economy? The authors examine the aggregate and sectoral geographic concentration of manufacturing industries for Indonesia, and estimate the impact of factors...

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Main Authors:	Deichmann, Uwe, Kaiser, Kai, Lall, Somik V., Shalizi, Zmarak
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ALTERNATIVE POLICY OPTIONS AUDITING CITIES CITY SIZE CONSTRUCTION COST OF LIVING COST SAVINGS DECENTRALIZATION DECISION MAKING ECONOMIC ACTIVITY ELASTICITIES EMPIRICAL STUDIES EMPLOYMENT ENDOGENEITY ENVIRONMENTAL IMPACT EQUILIBRIUM EXTERNALITIES FOOD PRODUCTS FOREST COVER FOREST RESOURCES FORESTS HIGH LEVELS INSURANCE INTERMEDIATE GOODS LABOR COSTS LAND COVER LAND SUPPLY LEVIES LOCAL GOVERNMENT LOCAL GOVERNMENT TAXATION LOCAL GOVERNMENTS LOGGING MIGRATION MUNICIPALITIES NATURAL RESOURCE BASE NATURAL RESOURCES PERMITS POLICY MAKERS POPULATION DENSITIES PRODUCERS PRODUCTION PROCESS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PUBLIC POLICY QUALITY OF LIFE RECYCLING REVENUE SOURCES SAVINGS SPILLOVERS TAXATION TRANSACTION COSTS TRANSPORT UNCERTAINTY URBAN AREAS URBANIZATION USER CHARGES WAGE RATES WAGES
Online Access:	http://documents.worldbank.org/curated/en/2005/01/5589082/agglomeration-transport-regional-development-indonesia http://hdl.handle.net/10986/8900

id	okr-10986-8900
recordtype	oai_dc
spelling	okr-10986-89002021-04-23T14:02:42Z Agglomeration, Transport, and Regional Development in Indonesia Deichmann, Uwe Kaiser, Kai Lall, Somik V. Shalizi, Zmarak ACCOUNTABILITY ACCOUNTING ALTERNATIVE POLICY OPTIONS AUDITING CITIES CITY SIZE CONSTRUCTION COST OF LIVING COST SAVINGS DECENTRALIZATION DECISION MAKING ECONOMIC ACTIVITY ELASTICITIES EMPIRICAL STUDIES EMPLOYMENT ENDOGENEITY ENVIRONMENTAL IMPACT EQUILIBRIUM EXTERNALITIES FOOD PRODUCTS FOREST COVER FOREST RESOURCES FORESTS HIGH LEVELS INSURANCE INTERMEDIATE GOODS LABOR COSTS LAND COVER LAND SUPPLY LEVIES LOCAL GOVERNMENT LOCAL GOVERNMENT TAXATION LOCAL GOVERNMENTS LOGGING MIGRATION MUNICIPALITIES NATURAL RESOURCE BASE NATURAL RESOURCES PERMITS POLICY MAKERS POPULATION DENSITIES PRODUCERS PRODUCTION PROCESS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PUBLIC POLICY QUALITY OF LIFE RECYCLING REVENUE SOURCES SAVINGS SPILLOVERS TAXATION TRANSACTION COSTS TRANSPORT UNCERTAINTY URBAN AREAS URBANIZATION USER CHARGES WAGE RATES WAGES How effective are public interventions in addressing significant regional disparities in formal manufacturing concentration in a developing economy? The authors examine the aggregate and sectoral geographic concentration of manufacturing industries for Indonesia, and estimate the impact of factors influencing location choice at the firm level. They distinguish between natural advantage, including infrastructure endowments, wage rates, and natural resource endowments, and production externalities, arising from the co-location of firms in the same or complementary industries. The methodology pays special attention to empirically distinguishing the impact of measured production externalities from unobserved local characteristics. Depending on the sector, the authors find that a mix of both forms of regional advantage explains the geographic distribution of firms. Based on the estimated location choice model, they illustrate the potential impacts of policy interventions on manufacturing distribution by simulating the effectiveness of transport improvements on relocation of firms. Their findings suggest that improvements in transport infrastructure may only have limited effects in attracting industry to secondary industrial centers outside of Java, especially in sectors already established in leading regions. The findings underscore the challenges for addressing the industrial fortunes of lagging regions, either through local decentralized policy interventions or national policies focused on infrastructure development. 2012-06-22T22:12:45Z 2012-06-22T22:12:45Z 2005-01 http://documents.worldbank.org/curated/en/2005/01/5589082/agglomeration-transport-regional-development-indonesia http://hdl.handle.net/10986/8900 English Policy Research Working Paper; No. 3477 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific Indonesia
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTABILITY ACCOUNTING ALTERNATIVE POLICY OPTIONS AUDITING CITIES CITY SIZE CONSTRUCTION COST OF LIVING COST SAVINGS DECENTRALIZATION DECISION MAKING ECONOMIC ACTIVITY ELASTICITIES EMPIRICAL STUDIES EMPLOYMENT ENDOGENEITY ENVIRONMENTAL IMPACT EQUILIBRIUM EXTERNALITIES FOOD PRODUCTS FOREST COVER FOREST RESOURCES FORESTS HIGH LEVELS INSURANCE INTERMEDIATE GOODS LABOR COSTS LAND COVER LAND SUPPLY LEVIES LOCAL GOVERNMENT LOCAL GOVERNMENT TAXATION LOCAL GOVERNMENTS LOGGING MIGRATION MUNICIPALITIES NATURAL RESOURCE BASE NATURAL RESOURCES PERMITS POLICY MAKERS POPULATION DENSITIES PRODUCERS PRODUCTION PROCESS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PUBLIC POLICY QUALITY OF LIFE RECYCLING REVENUE SOURCES SAVINGS SPILLOVERS TAXATION TRANSACTION COSTS TRANSPORT UNCERTAINTY URBAN AREAS URBANIZATION USER CHARGES WAGE RATES WAGES
spellingShingle	ACCOUNTABILITY ACCOUNTING ALTERNATIVE POLICY OPTIONS AUDITING CITIES CITY SIZE CONSTRUCTION COST OF LIVING COST SAVINGS DECENTRALIZATION DECISION MAKING ECONOMIC ACTIVITY ELASTICITIES EMPIRICAL STUDIES EMPLOYMENT ENDOGENEITY ENVIRONMENTAL IMPACT EQUILIBRIUM EXTERNALITIES FOOD PRODUCTS FOREST COVER FOREST RESOURCES FORESTS HIGH LEVELS INSURANCE INTERMEDIATE GOODS LABOR COSTS LAND COVER LAND SUPPLY LEVIES LOCAL GOVERNMENT LOCAL GOVERNMENT TAXATION LOCAL GOVERNMENTS LOGGING MIGRATION MUNICIPALITIES NATURAL RESOURCE BASE NATURAL RESOURCES PERMITS POLICY MAKERS POPULATION DENSITIES PRODUCERS PRODUCTION PROCESS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PUBLIC POLICY QUALITY OF LIFE RECYCLING REVENUE SOURCES SAVINGS SPILLOVERS TAXATION TRANSACTION COSTS TRANSPORT UNCERTAINTY URBAN AREAS URBANIZATION USER CHARGES WAGE RATES WAGES Deichmann, Uwe Kaiser, Kai Lall, Somik V. Shalizi, Zmarak Agglomeration, Transport, and Regional Development in Indonesia
geographic_facet	East Asia and Pacific Indonesia
relation	Policy Research Working Paper; No. 3477
description	How effective are public interventions in addressing significant regional disparities in formal manufacturing concentration in a developing economy? The authors examine the aggregate and sectoral geographic concentration of manufacturing industries for Indonesia, and estimate the impact of factors influencing location choice at the firm level. They distinguish between natural advantage, including infrastructure endowments, wage rates, and natural resource endowments, and production externalities, arising from the co-location of firms in the same or complementary industries. The methodology pays special attention to empirically distinguishing the impact of measured production externalities from unobserved local characteristics. Depending on the sector, the authors find that a mix of both forms of regional advantage explains the geographic distribution of firms. Based on the estimated location choice model, they illustrate the potential impacts of policy interventions on manufacturing distribution by simulating the effectiveness of transport improvements on relocation of firms. Their findings suggest that improvements in transport infrastructure may only have limited effects in attracting industry to secondary industrial centers outside of Java, especially in sectors already established in leading regions. The findings underscore the challenges for addressing the industrial fortunes of lagging regions, either through local decentralized policy interventions or national policies focused on infrastructure development.
format	Publications & Research :: Policy Research Working Paper
author	Deichmann, Uwe Kaiser, Kai Lall, Somik V. Shalizi, Zmarak
author_facet	Deichmann, Uwe Kaiser, Kai Lall, Somik V. Shalizi, Zmarak
author_sort	Deichmann, Uwe
title	Agglomeration, Transport, and Regional Development in Indonesia
title_short	Agglomeration, Transport, and Regional Development in Indonesia
title_full	Agglomeration, Transport, and Regional Development in Indonesia
title_fullStr	Agglomeration, Transport, and Regional Development in Indonesia
title_full_unstemmed	Agglomeration, Transport, and Regional Development in Indonesia
title_sort	agglomeration, transport, and regional development in indonesia
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/01/5589082/agglomeration-transport-regional-development-indonesia http://hdl.handle.net/10986/8900
_version_	1764406960699998208

Agglomeration, Transport, and Regional Development in Indonesia

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