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The Geographic Concentration of Enterprise in Developing Countries

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  • John S. Felkner
  • Robert M. Townsend

Abstract

A nation's economic geography can have an enormous impact on its development. In Thailand, we show that a high concentration of enterprise in an area predicts high subsequent growth in and around that area. We also find spatially contiguous convergence of enterprise with stagnant areas left behind. Exogenous physiographic conditions are correlated with enterprise location and growth. We fit a structural, micro-founded model of occupation transitions with fine-tuned geographic capabilities to village data and replicate these salient facts. Key elements of the model include costs, credit constraints on occupation choice, and spatially varying expansion of financial service providers. Copyright 2011, Oxford University Press.

Suggested Citation

  • John S. Felkner & Robert M. Townsend, 2011. "The Geographic Concentration of Enterprise in Developing Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(4), pages 2005-2061.
    • Handle: RePEc:oup:qjecon:v:126:y:2011:i:4:p:2005-2061
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    File URL: http://hdl.handle.net/10.1093/qje/qjr046
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    Cited by:

    1. Ning Xu & Chang’an Li, 2023. "Migration and Rural Sustainability: Relative Poverty Alleviation by Geographical Mobility in China," Sustainability, MDPI, vol. 15(7), pages 1-27, April.
    2. repec:unu:wpaper:wp2012-084 is not listed on IDEAS
    3. Wei Xiao & Mingqin Wu, 2021. "Life-cycle factors and entrepreneurship: evidence from rural China," Small Business Economics, Springer, vol. 57(4), pages 2017-2040, December.
    4. Gibbons, Steve & Overman, Henry G. & Patacchini, Eleonora, 2015. "Spatial Methods," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 115-168, Elsevier.
    5. Abel Brodeur & Warn N Lekfuangfu & Yanos Zylberberg, 2018. "War, Migration and the Origins of the Thai Sex Industry," Journal of the European Economic Association, European Economic Association, vol. 16(5), pages 1540-1576.
    6. Berry, Kevin & James, Alexander & Smith, Brock & Watson, Brett, 2022. "Geography, Geology, and Regional Economic Development," Journal of Environmental Economics and Management, Elsevier, vol. 115(C).
    7. Franziska Sohns & Javier Revilla Diez, 2018. "Explaining micro entrepreneurship in rural Vietnam—a multilevel analysis," Small Business Economics, Springer, vol. 50(1), pages 219-237, January.
    8. Krittaya Sangkasem & Nattapong Puttanapong, 2022. "Analysis of spatial inequality using DMSP‐OLS nighttime‐light satellite imageries: A case study of Thailand," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(4), pages 828-849, August.
    9. Jedwab, Remi & Vollrath, Dietrich, 2015. "Urbanization without growth in historical perspective," Explorations in Economic History, Elsevier, vol. 58(C), pages 1-21.
    10. Eric W. Bond & James Tybout & Hale Utar, 2015. "Credit Rationing, Risk Aversion, And Industrial Evolution In Developing Countries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(3), pages 695-722, August.
    11. Jidong Wu & Mengqi Ye & Xu Wang & Elco Koks, 2019. "Building Asset Value Mapping in Support of Flood Risk Assessments: A Case Study of Shanghai, China," Sustainability, MDPI, vol. 11(4), pages 1-19, February.
    12. Alan Manning & Paolo Masella, 2018. "Diffusion of social values through the lens of US newspapers," CEP Discussion Papers dp1559, Centre for Economic Performance, LSE.
    13. repec:esx:essedp:729 is not listed on IDEAS
    14. Felkner, John S. & Lee, Hyun & Shaikh, Sabina & Kolata, Alan & Binford, Michael, 2022. "The interrelated impacts of credit access, market access and forest proximity on livelihood strategies in Cambodia," World Development, Elsevier, vol. 155(C).
    15. Emma Howard & Carol Newman & Finn Tarp, 2016. "Measuring industry coagglomeration and identifying the driving forces," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 1055-1078.
    16. Joseph P. Kaboski & Robert M. Townsend, 2012. "The Impact of Credit on Village Economies," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 98-133, April.
    17. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779, Elsevier.
    18. Shenoy, Ajay, 2018. "Regional development through place-based policies: Evidence from a spatial discontinuity," Journal of Development Economics, Elsevier, vol. 130(C), pages 173-189.
    19. Cazzuffi, Chiara & Pereira-López, Mariana & Soloaga, Isidro, 2017. "Local poverty reduction in Chile and Mexico: The role of food manufacturing growth," Food Policy, Elsevier, vol. 68(C), pages 160-185.
    20. Alan Manning & Paolo Masella, 2018. "Diffusion of Social Values Through the Lens of US Newspapers," CEP Discussion Papers dp1559, Centre for Economic Performance, LSE.
    21. Emma Howard & Carol Newman & Finn Tarp, 2016. "Measuring industry coagglomeration and identifying the driving forces," Journal of Economic Geography, Oxford University Press, vol. 16(5), pages 1055-1078.

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