What are the prospects for economic
development in lagging sub-national regions? What are the
roles of public infrastructure investments and fiscal
incentives in influencing the location and performance of
industrial activity? To examine these questions, the authors
estimate a spatial profit function for industrial activity
in Brazil that explicitly incorporates infrastructure
improvements and fiscal incentives in the cost structure of
individual firms. The authors use firm level data from the
2001 annual industrial survey along with spatially
disaggregated regional data and find that there are
considerable cost savings from being located in areas with
relatively lower transport costs to reach large markets. In
comparison, fiscal incentives, such as tax expenditures,
have modest effects in terms of influencing firm level
costs. Although the results suggest that firms benefit from
being in locations with good access to markets, the authors
do not suggest that improving interregional connectivity
would necessarily assist lagging regions. In the short run,
improving interregional connectivity implicitly reduces a
natural tariff barrier so firms currently serving large
markets and benefiting from economies of scale can more
easily expand into new markets in competition with local
producers. Therefore, producers in the leading regions can
crowd out local producers, which would be detrimental for
local production and employment in the lagging region.
Bibliographic Details
| Main Authors: |
Lall, Somik V.,
Funderburg, Richard,
Yepes, Tito |
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| Format: | Policy Research Working Paper
biblioteca
|
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2004-04
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| Subjects: | ABATEMENT,
ACCOUNTING,
AGRICULTURAL PRODUCTION,
CAPITAL FORMATION,
CONSTRUCTION,
CONSUMERS,
COST OF CAPITAL,
COST SAVINGS,
DEVELOPMENT AGENCIES,
DEVELOPMENT POLICIES,
DEVELOPMENT STRATEGY,
ECONOMIC ACTIVITY,
ECONOMIC DEVELOPMENT,
ECONOMIC GEOGRAPHY,
ECONOMIC GROWTH,
ECONOMIC PERFORMANCE,
ECONOMIC POLICIES,
ECONOMIES OF SCALE,
ELASTICITY,
ELASTICITY OF SUBSTITUTION,
EMPIRICAL STUDIES,
EMPLOYMENT,
EQUILIBRIUM,
EXPORTS,
EXTERNALITIES,
EXTERNALITY,
FACTOR DEMAND,
FISCAL POLICIES,
FREE TRADE,
GDP,
GOVERNMENT EXPENDITURES,
IMPORTS,
INCOME,
INCOME INEQUALITY,
INCREASING RETURNS,
INDUSTRIAL SECTOR,
INDUSTRIAL TAXES,
INPUT PRICES,
INTEREST RATES,
INTERMEDIATE GOODS,
INTERMEDIATE INPUTS,
LARGE CITIES,
LIVING CONDITIONS,
MANUFACTURING INDUSTRY,
METALS,
MULTIPLIER EFFECTS,
MUNICIPALITIES,
OPERATING COSTS,
PER CAPITA INCOME,
PER CAPITA INCOMES,
POLICY INSTRUMENTS,
POLITICAL ECONOMY,
POSITIVE EFFECTS,
PRODUCERS,
PRODUCTION COSTS,
PRODUCTION PROCESS,
PRODUCTION PROCESSES,
PRODUCTIVITY,
PROFITABILITY,
PUBLIC EXPENDITURES,
PUBLIC SERVICES,
STRUCTURAL CHANGE,
TAX EXPENDITURES,
TAX REVENUES,
TAXATION,
TOTAL OUTPUT,
TRANSACTION COSTS,
TRANSPORT,
URBANIZATION,
WAGES ECONOMIC POLICY & PLANNING,
SUBNATIONAL FINANCES,
PUBLIC INFRASTRUCTURE,
INFRASTRUCTURE DEVELOPMENT,
FISCAL MANAGEMENT,
COST ACCOUNTING,
INDUSTRIAL POLICY,
INDUSTRIAL PROCESSES,
REGIONAL ANALYSIS,
TRANSPORT COSTS,
LOCATION FACTORS,
MARKET ACCESS,
INTERREGIONAL COOPERATION,
TARIFF STRUCTURES, |
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| Online Access: | http://documents.worldbank.org/curated/en/2003/04/3218008/location-concentration-performance-economic-activity-brazil
http://hdl.handle.net/10986/17426
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