Business Environment, Economic Agglomeration and Job Creation Around the World

29 Pages Posted: 20 Apr 2016

See all articles by George R. G. Clarke

George R. G. Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business

Yue Li

World Bank

Lixin Colin Xu

World Bank - Development Research Group (DECRG)

Date Written: November 1, 2013

Abstract

Based on a comprehensive worldwide firm survey, this paper looks at how the business environment and economic agglomeration affect job creation, holding constant conventional determinants of firm growth, such as firm ownership, size, and age. The analysis finds that economic agglomeration is most important, especially modern telecommunications, access to export markets, concentration of economic activity in large cities, and capacity agglomeration (the concentration of large firms in a city). Although the business environment affects job growth less than agglomeration does, some elements of the business environment matter, such as labor flexibility, unionization, and local skill levels. There is strong heterogeneity in job creation across firm size and age.

Keywords: Environmental Economics & Policies, Microfinance, Labor Markets, Private Participation in Infrastructure, Banks & Banking Reform

Suggested Citation

Clarke, George and Li, Yue and Xu, Lixin Colin, Business Environment, Economic Agglomeration and Job Creation Around the World (November 1, 2013). World Bank Policy Research Working Paper No. 6706. Available at SSRN: https://ssrn.com/abstract=2358537

George Clarke

Texas A&M International University - A.R. Sanchez Jr., School of Business ( email )

5201 University Blvd.
Laredo, TX 78041-1900
United States

Yue Li

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Lixin Colin Xu

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
MC 3-427
Washington, DC 20433
United States
202-473-4664 (Phone)
202-522-1155 (Fax)

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

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