Mukim, Megha (2011) Industry and the urge to cluster: a study of the informal sector in India. SERC Discussion Papers, SERCDP0072. Spatial Economics Research Centre (SERC), London School of Economics and Political Sciences, London, UK.
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This paper studies the determinants of firm location choice at the district-level in India to gauge the relative importance of agglomeration economies vis-à-vis good business environment. A peculiar characteristic of the Indian economy is that the unorganised nonfarm sector accounts for 43.2% of NDP and employs 71.6% of the total workforce. I analyse National Sample Survey data that covers over 4.4 million firms, in both unorganised sectors – manufacturing and services. The empirical analysis is carried out using count models, and I instrument with land revenue institutions to deal with possible endogeneity bias. I find that buyer-suppler linkages and industrial diversity make a district more attractive to economic activity, whilst the quality and level of infrastructure are also important. I conclude that public policy may be limited in its ability to encourage relocation of informal firms.
|Item Type:||Monograph (Working Paper)|
|Additional Information:||© 2011 Megha Mukim|
|Library of Congress subject classification:||G Geography. Anthropology. Recreation > G Geography (General)
H Social Sciences > HC Economic History and Conditions
|Journal of Economic Literature Classification System:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development|
|Sets:||Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
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