Economic Geography of Industry Location in India :: India Economics Industries Essays

sparing Geography of Industry Location in India____________________________________Paper watchful for the UNU/WIDER Project Conference onSpatial Inequality in Asia3Economic Geography of Industry Location in IndiaWhere do contrastive industries locate? What factors influence the spatialdistri furtherion of economic activity at bottom countries? Finding answers to these questions isimportant for understanding the development potential of sub bailiwick regions. This isparticularly important for developing countries as they have relatively pooh-pooh levels ofoverall investment and economic activity is concentrated in wizard or a few growth centers.Thus, regions that do not describe dynamic industries are not only characterized by lowproductivity, but also by lower relative incomes and standards of living. These questionson industry mending and their implications are not new. Examining the officeal aspectsof economic activity has long been of rice beer to geographers, planners , and regionalscientists (Weber, 1909 Lsch, 1940 Hotelling, 1929 Greenhut and Greenhut, 1975,Isard 1956). However, analytic difficulties in modeling increasing returns to scalemarginalized the analysis of geographic aspects in mainstream economic analysis(Krugman 1991). Recent research on externalities, increasing returns to scale, andimperfect spatial competition (Dixit and Stiglitz 1977 Fujita, et al. 1999 Krugman1991) has led to renewed interest in analyzing the spatial organization of economicactivity. This is especially true in case of geographic concentration or clustering.Models in the New Economic Geography literature (see review in Fujita,Krugman, and Venables, 1999) allow us to ingrain from the question Where willmanufacturing concentrate (if it does)? to the question What manufacturing willconcentrate where? These perceptive theoretical models provide, for the most part,renewed analytical support for the cumulative former arguments made in earlierdecades on the core-p eriphery relationship, on agglomeration economies, and onindustrial clustering. In this context, we are interested in finding empirical answers tothese (very old) questions, and to go beyond, to ask, What manufacturing will locatewhere and why?Industry reparation and concentration decisions are driven by two fundamentalconsiderations a set of saturated location or economic geography criteria, including wellrecognized elements much(prenominal) as urbanization and localization economies, market access,infrastructure availability, etc. The another(prenominal) is a set of practical or political economycriteria, where the render is a key player in industrial ownership and production, and useslocation considerations that are different from the private sector. The private sectorresponds to the very brawny influence of state regulations, and the result is an industrialgeography that is shaped by factors of economic geography and political economy.To understand the process of industria l location and concentration, it is importantto first analyze the location decisions of firms in particular industries.