Explaining local manufacturing growth in Chile: the advantages of sectoral diversity

Rita Almeida () and Ana Fernandes ()

No 5891, Policy Research Working Paper Series from The World Bank

Abstract: This paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during a period characterized by high growth rates and rising regional income inequality (1992-2004). The findings are clear-cut. Locations with greater concentration of a particular sector did not experience faster growth in total factor productivity during this period. Rather, local sector diversity was associated with higher long-run growth in total factor productivity. However, there is no evidence that the diversity effect was driven by the local interaction with a set of suppliers and/or clients. The authors interpret this as evidence that agglomeration economies are driven by other factors, such as the sharing of access to specialized inputs not provided solely by a single sector, such as skills or financing.

Keywords: Labor Policies; Economic Theory&Research; Economic Growth; Political Economy; Achieving Shared Growth (search for similar items in EconPapers)
Date: 2011-12-01
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Explaining local manufacturing growth in Chile: the advantages of sectoral diversity (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:5891

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