Industry Agglomeration, Urban Amenities, and Regional Development in India

Subash Sasidharan and Shandre Thangavelu
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Shandre Thangavelu: Jeffrey Cheah Institute of Southeast Asia, Sunway University and Institute for International Trade, University of Adelaide

No DP-2023-14, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: Industrial agglomeration is an important component to create efficiency and externalities for industrial growth and competitiveness for the Indian economy. In this paper, we examine the spatial location of Indian firms and industry agglomeration at district and township level for the Indian economy. Particularly, we examine the impact of urban amenities in driving the industrial agglomeration in the Indian economy using firm-level data. We carefully control for township-level urban amenities, as well as firm level characteristics in affecting the industry agglomeration. As opposed to previous stateand district-level studies, we examine the impact of urban amenities at a more disaggregated township level for 2011. The study also examines the impact of urban amenities on manufacturing, as well as the services sector. The empirical analysis findings indicate a positive correlation between town-level disparities in industry agglomeration and various amenities, including education, healthcare, energy, transportation, finance, and cultural resources. These results remain consistent when considering alternative measures of agglomeration and conducting sub-sample analyses.

Keywords: Industrial Agglomeration; Urban Amenities (search for similar items in EconPapers)
JEL-codes: F15 O15 (search for similar items in EconPapers)
Date: 2023-09-13
New Economics Papers: this item is included in nep-bec, nep-cse, nep-geo, nep-mac, nep-sbm and nep-ure
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