Is India's manufacturing sector moving away from cities?
By: Ejaz Ghani, Arti Grover Goswami, William R. Kerr
Contributors: Goswami, Arti Grover, 1978-; Kerr, William R. (William Robert); Harvard Business School
Series: Working paper / Harvard Business School -- 12-090; Working paper (Harvard Business School) -- 12-090.
Publisher: Harvard Business School
Published: 2011
Place of publication: [Boston]
Language: eng
Number of pages: 29
Description: This paper investigates the urbanization of the Indian manufacturing sector by combining enterprise data from formal and informal sectors. We find that plants in the formal sector are moving away from urban and into rural locations, while the informal sector is moving from rural to urban locations. While the secular trend for India's manufacturing urbanization has slowed down, the localized importance of education and infrastructure have not. Our results suggest that districts with better education and infrastructure have experienced a faster pace of urbanization, although higher urban-rural cost ratios cause movement out of urban areas. This process is associated with improvements in the spatial allocation of plants across urban and rural locations. Spatial location of plants has implications for policy on investments in education, infrastructure, and the livability of cities. The high share of urbanization occurring in the informal sector suggests that urbanization policies that contain inclusionary approaches may be more successful in promoting local development and managing its strains than those focused only on the formal sector.
Notes: "April 2012" -- Publisher's website.

Includes bibliographical references.