Language:
English
Pages:
Online-Ressource
Edition:
Online-Ausg. World Bank E-Library Archive Also available in print
Series Statement:
Policy research working paper 3477
Parallel Title:
Available in another form Agglomeration, transport, and regional development in Indonesia
Keywords:
Industrial location
;
Industries
;
Industrial location
;
Industries
;
Indonesia Economic conditions 1997-
;
Regional disparities
;
Indonesia Economic conditions 1997-
;
Regional disparities
Abstract:
"How effective are public interventions in addressing significant regional disparities in formal manufacturing concentration in a developing economy? Deichmann, Kaiser, Lall, and Shalizi examine the aggregate and sectoral geographic concentration of manufacturing industries for Indonesia, and estimate the impact of factors influencing location choice at the firm level. They distinguish between natural advantage, including infrastructure endowments, wage rates, and natural resource endowments, and production externalities, arising from the co-location of firms in the same or complementary industries. The methodology pays special attention to empirically distinguishing the impact of measured production externalities from unobserved local characteristics. Depending on the sector, the authors find that a mix of both forms of regional advantage explains the geographic distribution of firms. Based on the estimated location choice model, they illustrate the potential impacts of policy interventions on manufacturing distribution by simulating the effectiveness of transport improvements on relocation of firms. The findings suggest that improvements in transport infrastructure may only have limited effects in attracting industry to secondary industrial centers outside of Java, especially in sectors already established in leading regions. The findings underscore the challenges for addressing the industrial fortunes of lagging regions, either through local decentralized policy interventions or national policies focused on infrastructure development. This paper--a product of the Infrastructure and Environment Team, Development Research Group--is part of a larger effort in the group to examine the impacts of spatial policy interventions on the location and performance of economic activity"--World Bank web site
Note:
Includes bibliographical references
,
Title from PDF file as viewed on 1/10/2005
,
Also available in print.
URL:
Volltext
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