The Determinants of Firm Location in Tanzania
This paper identifies the factors that affect the location of firms in Tanzania. Using a binomialeconometric strategy to address data gaps in firm location at the ward level, the paper groups factors into firm characteristics, market features, and...
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World Bank, Washington, DC
2018
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| Online Access: | http://documents.worldbank.org/curated/en/911911540405386304/The-Determinants-of-Firm-Location-in-Tanzania http://hdl.handle.net/10986/30914 |
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okr-10986-309142021-06-14T10:07:30Z The Determinants of Firm Location in Tanzania Sanchez-Reaza, Javier FIRM LOCATION ECONOMIC GEOGRAPHY ECONOMETRIC MODEL SPATIAL ECONOMICS URBANIZATION LOCALIZATION ECONOMIES This paper identifies the factors that affect the location of firms in Tanzania. Using a binomialeconometric strategy to address data gaps in firm location at the ward level, the paper groups factors into firm characteristics, market features, and two types of agglomeration economies that capture economies of scale external to the firm. The benefits of agglomeration may stem from specialization within and among firms (referred to in the literature as localization economies) or from diversification across firms (referred to as urbanization economies). The distinction between these two lies at the heart of the discussion on firm location. Regression results indicate that, of the various factors tested, the most important determinant driving firm location is the jobs diversification aspect of urban economies. Other contributing factors are localization economies (jobs specialization), competitive markets, and market access. Based on these findings, policymakers seeking to foster agglomeration could orient policies toward promoting firm entry within cities, complementary investments in urban infrastructure and the urban pool of labor, regulations that support competition, and improvements in market access for large cities. But localization economies are also significant in Tanzania, and could be encouraged through investment in smaller population centers and increasing competition and market access beyond the primary urban centers of Dar-es-Salaam and Arusha. 2018-11-28T20:01:08Z 2018-11-28T20:01:08Z 2018-10-01 Working Paper http://documents.worldbank.org/curated/en/911911540405386304/The-Determinants-of-Firm-Location-in-Tanzania http://hdl.handle.net/10986/30914 English Jobs Working Paper;No. 21 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Africa Tanzania |
| repository_type |
Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
FIRM LOCATION ECONOMIC GEOGRAPHY ECONOMETRIC MODEL SPATIAL ECONOMICS URBANIZATION LOCALIZATION ECONOMIES |
| spellingShingle |
FIRM LOCATION ECONOMIC GEOGRAPHY ECONOMETRIC MODEL SPATIAL ECONOMICS URBANIZATION LOCALIZATION ECONOMIES Sanchez-Reaza, Javier The Determinants of Firm Location in Tanzania |
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Africa Tanzania |
| relation |
Jobs Working Paper;No. 21 |
| description |
This paper identifies the factors that
affect the location of firms in Tanzania. Using a
binomialeconometric strategy to address data gaps in firm
location at the ward level, the paper groups factors into
firm characteristics, market features, and two types of
agglomeration economies that capture economies of scale
external to the firm. The benefits of agglomeration may stem
from specialization within and among firms (referred to in
the literature as localization economies) or from
diversification across firms (referred to as urbanization
economies). The distinction between these two lies at the
heart of the discussion on firm location. Regression results
indicate that, of the various factors tested, the most
important determinant driving firm location is the jobs
diversification aspect of urban economies. Other
contributing factors are localization economies (jobs
specialization), competitive markets, and market access.
Based on these findings, policymakers seeking to foster
agglomeration could orient policies toward promoting firm
entry within cities, complementary investments in urban
infrastructure and the urban pool of labor, regulations that
support competition, and improvements in market access for
large cities. But localization economies are also
significant in Tanzania, and could be encouraged through
investment in smaller population centers and increasing
competition and market access beyond the primary urban
centers of Dar-es-Salaam and Arusha. |
| format |
Working Paper |
| author |
Sanchez-Reaza, Javier |
| author_facet |
Sanchez-Reaza, Javier |
| author_sort |
Sanchez-Reaza, Javier |
| title |
The Determinants of Firm Location in Tanzania |
| title_short |
The Determinants of Firm Location in Tanzania |
| title_full |
The Determinants of Firm Location in Tanzania |
| title_fullStr |
The Determinants of Firm Location in Tanzania |
| title_full_unstemmed |
The Determinants of Firm Location in Tanzania |
| title_sort |
determinants of firm location in tanzania |
| publisher |
World Bank, Washington, DC |
| publishDate |
2018 |
| url |
http://documents.worldbank.org/curated/en/911911540405386304/The-Determinants-of-Firm-Location-in-Tanzania http://hdl.handle.net/10986/30914 |
| _version_ |
1764473043875266560 |