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Economic Geography: Real or Hype?
The paper illustrates a potential bias that can arise when firm location choices are not considered in estimating the contribution of economic geography to industry performance. Analysis using microdata of Indian manufacturing firms shows there is an upward bias in the contribution of economic geography to productivity when firm location choices are not considered in the analysis.
Link
http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2005/01/19/000160016_20050119123558/Rendered/PDF/WPS3465.pdf