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Coagglomeration of formal and informal industry : evidence from India
Author:Mukim, Megha; Collection Title:Policy Research working paper ; no. WPS 6622
Country:India; Date Stored:2013/09/26
Document Date:2013/09/01Document Type:Policy Research Working Paper
SubTopics:Small Scale Enterprise; Industrial Management; Competition Policy; Water and Industry; Urban Economic Development; MicrofinanceLanguage:English
Region:South AsiaReport Number:WPS6622
Volume No:1 of 1  

Summary: A large and growing informal sector is a major feature of developing countries. This paper analyzes coagglomeration patterns between formal and informal manufacturing enterprises in India. It studies (a) the causes underlying these patterns and (b) the positive externalities, if any, on the entry of new firms. The analysis finds that buyer-supplier and technology linkages explain much of formal-informal coagglomeration. Also, within-industry coagglomeration matters mostly to small- and medium-sized formal firm births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sector.

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