Spatial Determinants of Entrepreneurship in India

46 Pages Posted: 3 Jan 2012

See all articles by Syed Ejaz Ghani

Syed Ejaz Ghani

World Bank

William Kerr

Harvard University - Entrepreneurial Management Unit

Stephen D. O'Connell

Emory University

Multiple version iconThere are 2 versions of this paper

Date Written: October 17, 2011

Abstract

We analyze the spatial determinants of entrepreneurship in India in the manufacturing and services sectors. Among general district traits, quality of physical infrastructure and workforce education are the strongest predictors of entry, with labor laws and household banking quality also playing important roles. Looking at the district-industry level, we find extensive evidence of agglomeration economies among manufacturing industries. In particular, supportive incumbent industrial structures for input and output markets are strongly linked to higher establishment entry rates. We also find substantial evidence for the Chinitz effect where small local incumbent suppliers encourage entry. The importance of agglomeration economies for entry hold when considering changes in India‘s incumbent industry structures from 1989, determined before large-scale deregulation began, to 2005.

Keywords: Entrepreneurship, agglomeration, development, India, South Asia

JEL Classification: L10, L26, L60, L80, M13, O10, R00, R10, R12

Suggested Citation

Ghani, Ejaz and Kerr, William R. and O'Connell, Stephen D., Spatial Determinants of Entrepreneurship in India (October 17, 2011). Harvard Business School Entrepreneurial Management Working Paper No. 12-027. Available at SSRN: https://ssrn.com/abstract=1978902 or http://dx.doi.org/10.2139/ssrn.1978902

Ejaz Ghani

World Bank ( email )

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

William R. Kerr (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Stephen D. O'Connell

Emory University ( email )

1602 Fishburne Drive
Atlanta, GA 30322
United States

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