Institute for Social and Economic Change

Established in 1972 by Professor V K R V Rao, ISEC is an All-India Institute for Interdisciplinary Research and Training in the Social Sciences

Large Agglomerations and Economic Growth in Urban India: An Application of Panel Data Model – isec

Large Agglomerations and Economic Growth in Urban India: An Application of Panel Data Model

Abstract

This paper investigates the impact of urban agglomeration on urban economic growth, using static and dynamic panel data approach, based on data of 52 large cities in India from 2000 to 2009. The results show that agglomeration has a strong positive effect on urban economic growth and support the ‘Williamson hypothesis’ that agglomeration increases economic growth only up to certain level of economic development. The critical level per-capita city income is estimated to be about Rs 37,049 at 1999-2000 constant prices. In addition, the results indicate that human capital accumulation promotes urban economic growth.

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