Geographic Concentration in Indian Manufacturing and Service Industries: Evidence from 1998 to 2013

Abstract

This paper uses a comprehensive new data source to document basic facts about geographic concentration among industries in India from 1998 to 2013. Unlike previous studies, our data allow us to accurately measure industrial concentration at the district level and cover manufacturing and services, as well as the formal and informal sectors. Our most striking finding is that average levels of industrial concentration fell dramatically between 1998 and 2013, driven by steep reductions in capital-intensive manufacturing industries. We provide suggestive evidence that this increasing dispersion may be due to improvements in interregional transportation coupled with inefficient land management policies and limited labor mobility.