Economic geography and misallocation in Pakistan’s manufacturing hub
| Autor: | Maryiam Haroon, Theresa Thompson Chaudhry, Muhammad Haseeb |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Labour economics
Economies of agglomeration business.industry 05 social sciences General Social Sciences Distribution (economics) Capital (economics) 0502 economics and business Econometrics Economics Revenue Statistical dispersion Allocative efficiency 050207 economics business Total factor productivity Productivity 050205 econometrics General Environmental Science |
| Zdroj: | The Annals of Regional Science. 59:189-208 |
| ISSN: | 1432-0592 0570-1864 |
| DOI: | 10.1007/s00168-017-0824-7 |
| Popis: | In this article, we explore whether localization of industries can reduce economic distortions and dispersion in total factor productivity (TFP) among firms in Punjab, Pakistan’s largest province economically. We consider two types of misallocation: (i) dispersion in the distribution of output-based TFP (TFPQ), in particular the survival of low productivity firms in the left tail; and (ii) dispersion in revenue-based TFP (TFPR), indicative of allocative inefficiency. The results are mixed: On the one hand, we find that the distribution of TFPQ is less dispersed in more agglomerated areas, measured by the localization quotient, local productive concentration, and average firm size. At the same time, we find that average TFPQ is also positively related to localization, especially the presence of small firms in the same sector, even though own-firm TFP is lowest for small firms. On the other hand, we do not find evidence that agglomeration improves allocative efficiency measured as deviations in TFPR from the sector average, concluding rather that greater localization of small firms is associated with firms being more output and capital constrained. |
| Databáze: | OpenAIRE |
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