This study analyses the impact of industrial agglomeration on the total factor productivity (TFP) of Indian manufacturing. We employ plant-level data from the Annual Survey of Industries (ASI) to measure TFP and industrial agglomeration. Our econometric analysis discerns a positive impact of industrial agglomeration on plant productivity. In addition, we find that the larger plants are the beneficiaries of productivity gains associated with agglomeration. Further, our findings are robust to alternate measures of TFP.
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