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Diversity Matters: The Economic Geography of Industry Location in India
The authors analyze the influence of economic geography on the cost structure of manufacturing firms by firm size for eight industry sectors in India. Findings indicate that industrial diversity is the only economic geography variable that has a significant, consistent, and substantial cost-reducing effect for firms, particularly small firms.
Link
http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2003/07/12/000094946_03070104102643/Rendered/PDF/multi0page.pdf