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Abstract

The main objective of this paper is to provide answer to an important question: Are Indian firms or industries in urban areas operating under decreasing returns to scale orincreasing returns to scale? Scale economies are one of the main assumptions of new economic geography models that posit the formation of agglomeration economies. For thispurpose, we use Kanemoto et al. 1996 model for estimation of aggregate production function and to derive the magnitude of scale economies. Using firm level data in 2004-05 from the Annual Survey of Industry, we find that urban firms in Indian industry operate under decreasing returns to scale.



Item Type: MPRA Paper -

Original Title: Estimating Urban Agglomeration Economies for India: A New Economic Geography Perspective-

Language: English-

Keywords: Economic geography, Urban agglomeration, Firm level analysis, Manufacturing industry, India-

Subjects: L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General-





Author: Tripathi, Sabyasachi

Source: https://mpra.ub.uni-muenchen.de/43501/







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