Improved transport links could boost productivity and move factories out of costly cities
The article explores how being close to markets and other businesses can boost productivity in Indian industry. By studying different levels of agglomeration economies, the researchers found that better access to markets through improved infrastructure is crucial for firm productivity. However, the benefits of being in crowded urban areas may not outweigh the costs. They suggest that improving transport links between smaller urban areas could help manufacturing plants thrive outside of expensive cities.