Abstract
This paper quantifies the nature and effects of agglomeration economies on manufacturing firms of Punjab, the largest province of Pakistan. Using firm level cross-section data, this research first explains the extent of agglomeration of manufacturing firms in Punjab by calculating the agglomeration indicators i.e., urbanization and localization. We used the firm’s distance from urban center as a proxy for urbanization. We used spatial autocorrelation as a measure to show the localization of firms. We constructed the translog production function to measure the effects of urbanization and localization on firms’ annual turnover. The overall impact of both agglomeration economies is positive on firms’ turnover. However, the effect of urbanization economies is more prevalent than the effects of localization economies in Punjab. At two-digit sector level, thirteen out of twenty-three sectors showed positive effect of urbanization on firm’s turnover. For localization, ten sectors showed positive on firm’s turnover. The results are consistent with the literature and the existing status of manufacturing sector of Punjab. Keywords: Agglomeration, urbanization, localization, spatial autocorrelation, manufacturing, Punjab.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
