Dynamic Externalities and Regional Manufacturing Growth: Evidence from India

Type Journal Article - Studies in Business and Economics
Title Dynamic Externalities and Regional Manufacturing Growth: Evidence from India
Author(s)
Volume 12
Issue 1
Publication (Day/Month/Year) 2017
Page numbers 185-201
URL https://www.degruyter.com/downloadpdf/j/sbe.2017.12.issue-1/sbe-2017-0014/sbe-2017-0014.pdf
Abstract
Using Annual Survey of Industries (ASI) dataset for 11 two-digit manufacturing
industries and 20 states, this paper tests the relationship between dynamic agglomeration
externalities and regional manufacturing growth for India. Three types of dynamic externalities
have been proposed in the literature for explaining this relationship – Marshall-Arrow-Romer
(MAR) specialization externalities, Jacobs’s diversity externalities, and Porter’s competition
externalities. This paper examines the effect of these dynamic externalities on regional
manufacturing employment and total factor productivity (TFP) growth for selected Indian
industries between 2001-02 and 2011-12.

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