Speaker: Ana Margarida Fernandes, The World Bank, joint with Gunjan Sharma
Abstract: We use plant-level data from India for the period 1980-99 to examine the impact of industrial and trade policy reforms on the geographic agglomeration of manufacturing industries measured by the Ellison and Glaeser (1997) index. First, our estimates show that de-licensing and FDI liberalization reduced agglomeration significantly, controlling for standard determinants of agglomeration but trade reforms had no significant effect on agglomeration. Second, the response of agglomeration to various mechanisms exhibits significant plant size-based differences. Trade liberalization significantly reduced concentration for large plants, while it had no impact for medium sized and small plants. De-licensing and FDI deregulation did not affect the spatial concentration of medium sized and large plants but they reduced agglomeration of small plants.