Estimating Urban Agglomeration Economies for India: A New Economic Geography Perspective

Sabyasachi Tripathi

MPRA Paper from University Library of Munich, Germany

Abstract: The main objective of this paper is to provide answer to an important question: Are Indian firms or industries in urban areas operating under decreasing returns to scale or increasing returns to scale? Scale economies are one of the main assumptions of new economic geography models that posit the formation of agglomeration economies. For this purpose, we use Kanemoto et al. (1996) model for estimation of aggregate production function and to derive the magnitude of scale economies. Using firm level data in 2004-05 from the Annual Survey of Industry, we find that urban firms in Indian industry operate under decreasing returns to scale.

Keywords: Economic geography; Urban agglomeration; Firm level analysis; Manufacturing industry; India (search for similar items in EconPapers)
JEL-codes: L60 (search for similar items in EconPapers)
Date: 2012-12
New Economics Papers: this item is included in nep-eff and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Estimating Urban Agglomeration Economies for India: A New Economic Geography Perspective (2014)
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