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Economic geography: real or hype?

Jun Koo and Somik Lall

No 3465, Policy Research Working Paper Series from The World Bank

Abstract: Economic geography has become a mantra for many economists, geographers, and regional scientists. Previous studies have tested the importance of economic geography for production activities and found a significant association between them. Most of these studies, however, have not taken into account that economic geography influences location decisions at the firm level. The authors show a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Their analysis using microdata of Indian manufacturingfirms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis.

Keywords: Economic Theory&Research; Banks&Banking Reform; Environmental Economics&Policies; Water and Industry; Labor Policies; Economic Theory&Research; Environmental Economics&Policies; Banks&Banking Reform; Water and Industry; National Urban Development Policies&Strategies (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-geo, nep-hpe and nep-ure
Date: 2005-01-01
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