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- Title
Agglomeration of Foreign Automobile Firms in India: Empirical Evidence.
- Authors
Gupta, Neha
- Abstract
Automobile and auto-ancillary manufacturing in India is highly concentrated, with four auto clusters receiving approximately 91% of the total Foreign Direct Investment (FDI) in this sector. Technological spillovers, factor endowments, etc., were identified as some of the factors influencing firm co-location. This paper observes the impact of agglomeration as well as state-specific endowments on the development of automotive clusters in India. In order to determine the motives deriving location choices of foreign automobile firms in India, one agglomeration and nine control variables were identified and tested using Dynamic Linear Programming Regression (DLPR) model. Presence of incumbent Indian automobile firms, higher per capita income and higher demand for vehicles turned out to be some of the important determinants of location choices of foreign automobile firms in the country.
- Subjects
INDIA; INDUSTRIAL clusters; FOREIGN investments; FOREIGN automobiles; AUTOMOBILE industry; EXTERNALITIES; FACTOR proportions
- Publication
IUP Journal of Business Strategy, 2015, Vol 12, Issue 1, p7
- ISSN
0972-9259
- Publication type
Article