Discussion Paper

No. 2014-21 | May 12, 2014
Where Do New Firms Locate? The Effects of Agglomeration on the Formation and Scale of Operations of New Firms in Punjab

Abstract

The formation of new firms is an important determinant of economic development and the industrial organization literature highlights agglomeration as one of the main factors affecting the formation and scale of operations of new firms. This paper is one of the first to use developing country data to estimate the impact of localization (the benefits accruing to firms that choose to locate in a specific region within a specific industry) and urbanization (the benefits accruing to firms located close to each other regardless of the type of industry to which they belong) on new firms’ formation and scale of operations. The findings reveal that agglomeration measured through density of employment has a significant impact on the formation of new firms and on their scale of operations in Punjab.

Data Set

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The data set for this article can be found at: http://dx.doi.org/10.7910/DVN/25750

JEL Classification

L1 L2

Cite As

Maryiam Haroon and Azam Chaudhry (2014). Where Do New Firms Locate? The Effects of Agglomeration on the Formation and Scale of Operations of New Firms in Punjab. Economics Discussion Papers, No 2014-21, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2014-21

Assessment



Comments and Questions


Anonymous - Referee report 1
June 25, 2014 - 12:58

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Anonymous - Referee report 2
July 07, 2014 - 11:36

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Anonymous - Reader comments
July 09, 2014 - 08:45

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