Economic Geography: Real or Hype?

24 Pages Posted: 4 Jan 2005

See all articles by Jun Koo

Jun Koo

Cleveland State University - Maxine Goodman Levin College of Urban Affairs; World Bank

Somik V. Lall

World Bank

Date Written: December 2004

Abstract

Economic geography has become a mantra for many economists, geographers, and regional scientists. Many 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. This paper illustrates a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Analysis using microdata of Indian manufacturing firms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis.

Suggested Citation

Koo, Jun and Lall, Somik V., Economic Geography: Real or Hype? (December 2004). Available at SSRN: https://ssrn.com/abstract=643225

Jun Koo (Contact Author)

Cleveland State University - Maxine Goodman Levin College of Urban Affairs ( email )

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United States
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World Bank ( email )

1818 H Street, N.W.
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Somik V. Lall

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/slall