FIGURE 4.3 The Impact of Improved Domestic Connectivity Is Contingent on Proximity to Ports in India Output
Employment
Plant count
Secondary, 1994–2000
Interior, 1994–2000
Secondary, 2000–09
Interior, 2000–09
–4
–2
0
2
4
–4
–2
0
2
4
–4
–2
0
2
4
Source: Dasgupta and Grover 2021, for this volume. Note: 1994–2000 is the period before treatment. 2000–09 is the period during treatment. Secondary refers to districts located within 200–400 km from the nearest port. Interior refers to districts that are more than 400 km from the nearest port.
Evidence from China suggests that the disparity between inland and coastal regions increased with trade openness (Fan, Kanbur, and Zhang 2011). Moving inland by 275 miles in China (the median distance from the coast across prefectures) decreases industry employment by 32 percent for an export-intensive industry and by 21 percent for a labor-intensive one, compared with the nationwide average of roughly 15 percent (Coşar and Fajgelbaum 2016). In Mexico, the assembly of parts through the maquiladora program boosted Mexico’s participation in global production networks that accounted for half of Mexico’s exports in 2006— yet most exporting firms remain clustered around the US-Mexico border (Mia and Austin 2008; Hanson 1996). In Canada, detailed data on trucking rates suggest that industries with low transport costs display significantly more geographic concentration and that falling transport costs agglomerate industries. More specifically, the fall in trucking rates between 1992 and 2008 led to a 20 percent increase in geographic concentration on average (Behrens, Brown, and Bougna 2018). Likewise, Vietnam’s participation in GVCs is driven by firms located around Ho Chi Minh City, which account for nearly 83 percent of apparel and textile exports. Even after several decades following their establishment, these activities of global production networks are confined to the city and its nearby hubs (Pham et al. 2013). More broadly,
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Place, Productivity, and Prosperity
