Business Environment, Clustering, And Industry Location Evidence From Indian Cities

How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing l...

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Bibliographic Details
Main Author: Lall, Somik V.
Other Authors: Mengistae, Taye
Format: eBook
Language:English
Published: Washington, D.C The World Bank 2005
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Online Access:
Collection: World Bank E-Library Archive - Collection details see MPG.ReNa
Description
Summary:How do differences in the local business environment influence location of industry within countries? How do the benefits of a good business environment compare with those from good market access and agglomeration economies from industry clustering? The authors examine these questions by analyzing location decisions of individual firms. Using data from a recently completed survey of manufacturing firms in India, they find that both the local business environment and agglomeration economies significantly influence business location choices across cities. In particular, excessive regulation of labor and of other industrial activities reduces the probability of a business locating in a city. The authors ' findings imply that in order to attract industrial activity, smaller or remoter cities need to offer even more attractive policy concessions or reforms to offset the effects of their relatively adverse (economic) geography. Their methodology pays special attention to the identification of agglomeration economies in the presence of unobserved sources of natural advantage
Physical Description:40 p.