Agglomeration and Convergence : Evidence from the Indian Manufacturing

The present study estimates impact of agglomeration on growth for 15 Indian states for the period 2008-2017. The result shows that industrial agglomeration has a positive impact on convergence is not confirmed an increment in agglomeration is contributing to growth across states in terms of income over the period under study, but after a certain point of time agglomeration will hamper growth. Higher growth due to agglomeration benefits can result in interspatial inequality Also the study estimates impact of agglomeration on wages of the organized and unorganized sector for the period 2017 only. The Impact of wages on industrial agglomeration for organized sector is positive confirming the intra wage theory. In case of unorganized sector, on the other hand, the impacts of agglomeration on wages are negative which indicates that when the industries expand in the regions, the diseconomies exceed economies