Journal
JOURNAL OF ECONOMIC GEOGRAPHY
Volume 15, Issue 2, Pages 329-351Publisher
OXFORD UNIV PRESS
DOI: 10.1093/jeg/lbu020
Keywords
Coagglomeration; informal sector; India
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A large and growing informal sector is a major feature of developing countries. I analyze coagglomeration patterns between formal and informal manufacturing enterprises in India, and study (i) the causes underlying these patterns, and (ii) the positive externalities, if any, on the entry of new firms. I find that buyer-seller and technology linkages explain much of formal-informal coagglomeration. I also find that this sectoral, within-industry, coagglomeration matters mostly to small- and medium-sized formal firms births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sectors.
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