Geographic Concentration in Indian Manufacturing and Service Industries: Evidence from 1998 to 2013

Abstract

This paper uses a comprehensive new data source to document basic facts about geographic concentration among industries in India from 1998 to 2013. Unlike previous studies, our data allow us to accurately measure industrial concentration at the district level and cover manufacturing and services, as well as the formal and informal sectors. Our most striking finding is that average levels of industrial concentration fell dramatically between 1998 and 2013, driven by steep reductions in capital-intensive manufacturing industries. We provide suggestive evidence that this increasing dispersion may be due to improvements in interregional transportation coupled with inefficient land management policies and limited labor mobility.

Modi's Economic Reforms in India: Editors' Overview

“…There are three key findings of Amirapu et al .’s () research. First, levels of concentration are higher in manufacturing industries than in the service industries and are highest in those manufacturing industries that are capital intensive or associated with modern technology, especially information and communications technology (ICT).…”

“…In order to understand how to interpret and evaluate Amirapu et al .’s () results, Marcus Noland () stresses the importance of a discussion of the key determinants of the spatial distribution of economic activity. For example, Noland points to three categories of variables, economics, ownership, and policy, as potential drivers of this spatial distribution.…”

“…Amirapu, Hasan, Jiang and Klein () use a massive data set from three rounds of India’s economic censuses conducted in 1998, 2005 and 2013 to examine the spatial distribution of plants in the manufacturing and services sectors from 1998 to 2013, a period over which India’s economic reforms of the early 1990s had solidified and had a chance to influence the locational choices of firms. The spatial unit of their analysis is the district, the second tier of subnational government in India and their main tool for examining the spatial development of economic activity is a refined version of the Ellison and Glaeser () (EG) index, which quantifies the degree of spatial concentration among plants in an industry.…”

Comment on “Geographic Concentration in Indian Manufacturing and Service Industries: Evidence from 1998 to 2013”

“…Amirapu et al . () measure industrial concentration with a spatially adjusted index of industrial concentration based on the Ellison and Glaeser (EG) index. The adjustment introduces a neighborhood effect into the EG index.…”

Comment on “Geographic Concentration in Indian Manufacturing and Service Industries: Evidence from 1998 to 2013”

“…The study of Amirapu et al . () addresses the interesting issue of how the spatial distribution of economic activity has evolved in India between 1998 and 2013. Their main findings are that agglomeration in nonagricultural activities fell during this period.…”