Explaining Local Manufacturing Growth in Chile : The Advantages of Sectoral Diversity

This paper investigates whether the agglomeration of economic activity in regional clusters affects long-run manufacturing total factor productivity growth in an emerging market context. It explores a large firm-level panel dataset for Chile during a period characterized by high growth rates and rising regional income inequality (1992-2004). The findings are clear-cut. Locations with greater concentration of a particular sector did not experience faster growth in total factor productivity during this period. Rather, local sector diversity was associated with higher long-run growth in total factor productivity. However, there is no evidence that the diversity effect was driven by the local interaction with a set of suppliers and/or clients. The authors interpret this as evidence that agglomeration economies are driven by other factors, such as the sharing of access to specialized inputs not provided solely by a single sector, such as skills or financing.

Bibliographic Details

Main Authors:	Almeida, Rita, Fernandes, Ana M.
Language:	English
Published:	2011-12-01
Subjects:	ACCOUNTING, AIR POLLUTION, ANNUAL DEPRECIATION RATE, ATTRITION, BOOK VALUE, CAPITAL STOCK, CAPITALISM, CENTRAL BANK, COMPETITIVE ADVANTAGE, COMPETITIVE ADVANTAGE OF NATIONS, COMPETITIVE ENVIRONMENT, CONCEPT OF KNOWLEDGE, DEBT, DEMOCRACY, DEPENDENT VARIABLE, DEVELOPING COUNTRIES, DEVELOPMENT INDICATORS, DEVELOPMENT POLICIES, DEVELOPMENT POLICY, DEVELOPMENT RESEARCH, DISAGGREGATED LEVEL, ECONOMETRIC ANALYSIS, ECONOMETRICS, ECONOMIC ACTIVITY, ECONOMIC ANALYSIS, ECONOMIC DEVELOPMENT, ECONOMIC GEOGRAPHY, ECONOMIC IMPLICATIONS, ECONOMIC STRUCTURE, ECONOMIC STUDIES, ECONOMIC THEORY, ECONOMICS, EMPIRICAL EVIDENCE, EMPIRICAL LITERATURE, EMPLOYMENT, EMPLOYMENT GROWTH, ERROR TERM, EXTERNALITIES, EXTERNALITY, FIRST YEAR, FIXED EFFECTS, FORECASTS, FOREIGN DIRECT INVESTMENT, FREE PRESS, FUNCTIONAL FORM, GDP, GDP PER CAPITA, GEOGRAPHIC LOCALIZATION, GEOGRAPHIC LOCALIZATION OF KNOWLEDGE SPILLOVERS, GROSS FIXED CAPITAL FORMATION, GROWTH PATTERN, GROWTH RATE, GROWTH RATES, HIGH CONCENTRATION, HIGH GROWTH, HISTORICAL CONTEXT, IMPERFECT COMPETITION, INCOME, INCOME INEQUALITY, INCREASE IN LABOR, INCREASING RETURNS, INDUSTRIAL DEVELOPMENT, INNOVATION, INTERMEDIATE GOODS, INTERMEDIATE INPUT, INVENTORY, KNOWLEDGE DIFFUSION, KNOWLEDGE SHARING, LABOR DEMAND, LABOR FORCE, LABOR INPUT, LABOR MARKETS, LABOR PRODUCTIVITY, LABOR SUPPLY, LONG-RUN GROWTH, MONETARY ECONOMICS, MONOPOLY, MONOPOLY RENTS, NATURAL RESOURCES, NEGATIVE EFFECT, NET INVESTMENT, OUTPUT GROWTH, OUTPUT OF SECTOR, PERFECT COMPETITION, POLICY IMPLICATIONS, POLICY RESEARCH, POLITICAL ECONOMY, PRODUCTION FUNCTION, PRODUCTION FUNCTIONS, PRODUCTIVITY, PRODUCTIVITY GROWTH, RENTS, SECTORAL COMPOSITION, SKILLED LABOR, SOCIALISM, SPECIALIZATION, STANDARD DEVIATION, SUPPLIERS, TECHNICAL ASSISTANCE, TECHNOLOGY TRANSFER, TELECOMMUNICATIONS, TFP, TOTAL CAPITAL STOCK, TOTAL FACTOR PRODUCTIVITY, TOTAL FACTOR PRODUCTIVITY GROWTH, TOTAL OUTPUT, TRADE LIBERALIZATION, VARIABLE INPUTS, WAGES,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20111201165345 https://hdl.handle.net/10986/3659
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