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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Main Authors:	Lall, Somik V., Mengistae, Taye
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTING ADAPTATION ADVERTISING AIR ALM ASSETS BANK BRANCHES BANKRUPTCY BANKS CLIMATE COLLATERAL CONSTRUCTION CONTRACT ENFORCEMENT COST SAVINGS DEBT DECISION MAKING DEFAULT RISK DEPOSITS DISTORTIONARY EFFECTS ECONOMIC ACTIVITY ECONOMIES OF SCALE ELASTICITIES EMPIRICAL ANALYSIS EMPIRICAL STUDIES EMPLOYMENT ENVIRONMENTAL PROTECTION EQUILIBRIUM EXPLOITATION EXTERNALITIES FINANCIAL INSTITUTIONS FOOD PROCESSING IDLE CAPACITY INCOME INTERMEDIATE GOODS LABOR COSTS LABOR FORCE LAND PRICES LAND TAXES LAND USE LAWS LEGISLATION LOCAL GOVERNMENTS MACROECONOMIC STABILIZATION MANAGERS MARKET DISTORTIONS MATURITY MINES NATURAL RESOURCES NONBANK FINANCIAL INSTITUTIONS PLANT OPERATIONS POLICY ENVIRONMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PROPERTY RIGHTS PUBLIC GOODS SAFETY SOCIAL NETWORKS TAX COLLECTION TAX RATES TAXATION TRANSACTION COSTS TRANSPORT URBANIZATION USER CHARGES WAGES WASTE WORKERS
Online Access:	http://documents.worldbank.org/curated/en/2005/08/6180790/business-environment-clustering-industry-location-evidence-indian-cities http://hdl.handle.net/10986/8615

id	okr-10986-8615
recordtype	oai_dc
spelling	okr-10986-86152021-04-23T14:02:43Z Business Environment, Clustering, and Industry Location : Evidence from Indian Cities Lall, Somik V. Mengistae, Taye ACCOUNTING ADAPTATION ADVERTISING AIR ALM ASSETS BANK BRANCHES BANKRUPTCY BANKS CLIMATE COLLATERAL CONSTRUCTION CONTRACT ENFORCEMENT COST SAVINGS DEBT DECISION MAKING DEFAULT RISK DEPOSITS DISTORTIONARY EFFECTS ECONOMIC ACTIVITY ECONOMIES OF SCALE ELASTICITIES EMPIRICAL ANALYSIS EMPIRICAL STUDIES EMPLOYMENT ENVIRONMENTAL PROTECTION EQUILIBRIUM EXPLOITATION EXTERNALITIES FINANCIAL INSTITUTIONS FOOD PROCESSING IDLE CAPACITY INCOME INTERMEDIATE GOODS LABOR COSTS LABOR FORCE LAND PRICES LAND TAXES LAND USE LAWS LEGISLATION LOCAL GOVERNMENTS MACROECONOMIC STABILIZATION MANAGERS MARKET DISTORTIONS MATURITY MINES NATURAL RESOURCES NONBANK FINANCIAL INSTITUTIONS PLANT OPERATIONS POLICY ENVIRONMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PROPERTY RIGHTS PUBLIC GOODS SAFETY SOCIAL NETWORKS TAX COLLECTION TAX RATES TAXATION TRANSACTION COSTS TRANSPORT URBANIZATION USER CHARGES WAGES WASTE WORKERS 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. 2012-06-20T22:34:40Z 2012-06-20T22:34:40Z 2005-08 http://documents.worldbank.org/curated/en/2005/08/6180790/business-environment-clustering-industry-location-evidence-indian-cities http://hdl.handle.net/10986/8615 English Policy Research Working Paper; No. 3675 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 South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTING ADAPTATION ADVERTISING AIR ALM ASSETS BANK BRANCHES BANKRUPTCY BANKS CLIMATE COLLATERAL CONSTRUCTION CONTRACT ENFORCEMENT COST SAVINGS DEBT DECISION MAKING DEFAULT RISK DEPOSITS DISTORTIONARY EFFECTS ECONOMIC ACTIVITY ECONOMIES OF SCALE ELASTICITIES EMPIRICAL ANALYSIS EMPIRICAL STUDIES EMPLOYMENT ENVIRONMENTAL PROTECTION EQUILIBRIUM EXPLOITATION EXTERNALITIES FINANCIAL INSTITUTIONS FOOD PROCESSING IDLE CAPACITY INCOME INTERMEDIATE GOODS LABOR COSTS LABOR FORCE LAND PRICES LAND TAXES LAND USE LAWS LEGISLATION LOCAL GOVERNMENTS MACROECONOMIC STABILIZATION MANAGERS MARKET DISTORTIONS MATURITY MINES NATURAL RESOURCES NONBANK FINANCIAL INSTITUTIONS PLANT OPERATIONS POLICY ENVIRONMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PROPERTY RIGHTS PUBLIC GOODS SAFETY SOCIAL NETWORKS TAX COLLECTION TAX RATES TAXATION TRANSACTION COSTS TRANSPORT URBANIZATION USER CHARGES WAGES WASTE WORKERS
spellingShingle	ACCOUNTING ADAPTATION ADVERTISING AIR ALM ASSETS BANK BRANCHES BANKRUPTCY BANKS CLIMATE COLLATERAL CONSTRUCTION CONTRACT ENFORCEMENT COST SAVINGS DEBT DECISION MAKING DEFAULT RISK DEPOSITS DISTORTIONARY EFFECTS ECONOMIC ACTIVITY ECONOMIES OF SCALE ELASTICITIES EMPIRICAL ANALYSIS EMPIRICAL STUDIES EMPLOYMENT ENVIRONMENTAL PROTECTION EQUILIBRIUM EXPLOITATION EXTERNALITIES FINANCIAL INSTITUTIONS FOOD PROCESSING IDLE CAPACITY INCOME INTERMEDIATE GOODS LABOR COSTS LABOR FORCE LAND PRICES LAND TAXES LAND USE LAWS LEGISLATION LOCAL GOVERNMENTS MACROECONOMIC STABILIZATION MANAGERS MARKET DISTORTIONS MATURITY MINES NATURAL RESOURCES NONBANK FINANCIAL INSTITUTIONS PLANT OPERATIONS POLICY ENVIRONMENT PRODUCERS PRODUCTION TECHNOLOGY PRODUCTIVITY PROFITABILITY PROPERTY RIGHTS PUBLIC GOODS SAFETY SOCIAL NETWORKS TAX COLLECTION TAX RATES TAXATION TRANSACTION COSTS TRANSPORT URBANIZATION USER CHARGES WAGES WASTE WORKERS Lall, Somik V. Mengistae, Taye Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
geographic_facet	South Asia India
relation	Policy Research Working Paper; No. 3675
description	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.
format	Publications & Research :: Policy Research Working Paper
author	Lall, Somik V. Mengistae, Taye
author_facet	Lall, Somik V. Mengistae, Taye
author_sort	Lall, Somik V.
title	Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
title_short	Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
title_full	Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
title_fullStr	Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
title_full_unstemmed	Business Environment, Clustering, and Industry Location : Evidence from Indian Cities
title_sort	business environment, clustering, and industry location : evidence from indian cities
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/08/6180790/business-environment-clustering-industry-location-evidence-indian-cities http://hdl.handle.net/10986/8615
_version_	1764407653244600320

Business Environment, Clustering, and Industry Location : Evidence from Indian Cities

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