nep-lam New Economics Papers
on Central and South America
Issue of 2015‒11‒01
eleven papers chosen by
Maximo Rossi
Universidad de la República

  1. Impact of agglomeration on the regional growth of Latin American countries By Grace Carolina Guevara Rosero
  2. Fiscal Redistribution In Middle Income Countries:: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa By Nora Lustig
  3. Vertical versus Horizontal Tax Incentives Policies in Brazil: Assessing the Impacts Using a Computable General Equilibrium Model By Alexandre Porsse; Felipe Madruga
  4. Commuting Time and Urban Violence in Brazil By Raul Silveira Neto; Klebson Moura
  5. Tracing Brazilian regions? CO2 emissions in domestic and global trade By Denise Imori; Joaquim Guilhoto
  6. Tracing Brazilian states’ CO2 emissions in domestic and global trade By Denise Imori; Joaquim Jose Martins Guilhoto
  7. Geography of Regional Imbalance: The Role of Higher Education Institutions in Brazil By Mauricio Serra; Louise Kempton; Paul Vallance; Ana Paula Bastos; Cassio Rolim
  8. City of God Redux: Inequality, Migration, and Violent Crime in Brazil between 1980 and 2000 By Tiago Freire
  9. Creation of formal employment in a context of implementation of the Decent Work Agenda: the Territories of Bahian Identity By Laumar Neves de Souza; Helcio de Medeiros Junior; Tatiana de Andrade Spinola
  10. Relevance of management practices for support of Brazilian farming business growth and the regional development By Antonio Bliska Jr.; Flavia Maria de Mello Bliska; Ricardo Firetti; Patricia Helena Nogueira Turco; Fabio Ricardo Ferreira Correa; Felipe Augusto Batoni de Souza; Paulo Ademar Martins Leal
  11. Agglomeration externalities and urbanization in Ecuador By Grace Carolina Guevara Rosero; Stephane Riou; Corinne Autant-Bernard

  1. By: Grace Carolina Guevara Rosero
    Abstract: Theoretical approaches have been developed to examine the effect of agglomeration on growth. However, the understanding of the mechanisms of agglomeration in developing countries remains unaddressed. This paper aims to give empirical evidence of the role of agglomeration on the growth of Latin American regions. The study of the subcontinent is crucial because of the evidence of a rapid pace of urbanization process. Using a database with information of 162 regions of 8 Latin American countries (Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Panama and Peru) during the period 2000-2009, we estimate the effect of agglomeration on regional growth in three periods. The measures of agglomeration are urbanization rate and population density. The data is based on the information provided by the National Institutes of Statistics and the Central Banks of each country. The geographical coordinates were obtained from the GeoHack system of Wikitech. The control variables are: educated labor force, public investment and sectoral specialization. After proving that our variables of agglomeration instrumented with altitude are not endogenous and given the finding of spatial correlation between Latin American regions, a spatial autoregressive panel model with fixed effects is estimated by Maximum Likelihood. For the sake of this estimation, we apply three spatial weight matrices. The first one is the k=1nearest neighbors weight matrix which is interpreted as the configuration of low integration. The second one is the weight matrix based on Gabriel method which is interpreted as the configuration of moderate integration. And the third one is a distance weight matrix where all regions are connected. It is interpreted as the configuration of quasi-complete integration. Our findings suggest that agglomeration is vital for the regional growth. However, the effect of agglomeration is not the same everywhere. In this line, we test Williamson?s (1965) hypothesis of more pronounced agglomeration effects at early stages of development than at later stages of development. Using the statistical theory proposed by Hansen (2000), the threshold value of level of development at which the effect of urbanization changes was 5700 dollars of per capita income. Low-developed regions experience larger positive effects of urbanization on their economic growth than high-developed regions. In our sample, the positive effects vanish at 10,500 dollars of per capita income. Finally, the degree of spatial autocorrelation increases with the level of integration that the spatial weight matrix reflects.
    Keywords: regional growth; spatial; urbanization; Latin America; agglomeration economies
    JEL: R11 O18 O54 R15
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p675&r=lam
  2. By: Nora Lustig
    Abstract: This paper examines the redistributive impact of fiscal policy for Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa using comparable fiscal incidence analysis with data from around 2010. The largest redistributive effect is in South Africa and the smallest in Indonesia. Success in fiscal redistribution is driven primarily by redistributive effort (share of social spending to GDP in each country) and the extent to which transfers/subsidies are targeted to the poor and direct taxes targeted to the rich. While fiscal policy always reduces inequality, this is not the case with poverty. Fiscal policy increases poverty in Brazil and Colombia (over and above market income poverty) due to high consumption taxes on basic goods. The marginal contribution of direct taxes, direct transfers and in-kind transfers is always equalizing. The marginal effect of net indirect taxes is unequalizing in Brazil, Colombia, Indonesia and South Africa. Total spending on education is pro-poor except for Indonesia, where it is neutral in absolute terms. Health spending is pro-poor in Brazil, Chile, Colombia and South Africa, roughly neutral in absolute terms in Mexico, and not pro-poor in Indonesia and Peru.<BR>Ce document de travail examine l’impact redistributif des politiques budgétaires au Brésil, au Chili, en Colombie, en Indonésie, au Mexique, au Pérou et en Afrique du Sud en utilisant la technique d’analyse d’incidence sur des données aux alentours de l’année 2010. L’impact de la redistribution est le plus important en Afrique du Sud, et le plus faible en Indonésie. La performance de la redistribution est principalement déterminée par l’effort redistributif (part de la dépense sociale dans le PIB de chaque pays) et par la mesure dans laquelle les taxes et transferts sont ciblés vers les plus pauvres et les impôts directs vers les plus riches. Les politiques budgétaires réduisent systématiquement les inégalités, mais pas la pauvreté. La dépense publique augmente la pauvreté au Brésil, en Colombie (au-delà même de la pauvreté mesurée avant redistribution) à cause de la forte taxation des biens élémentaires. L‘impact marginal des taxes directes, des transferts directs et des transferts en nature a toujours un impact progressif. L’impact marginal des taxes indirectes est régressif au Brésil, en Colombie, en Indonésie et en Afrique du Sud. Les dépenses totales d’éducation sont plus favorables aux pauvres, sauf en Indonésie, où elles sont neutres en termes absolus. Les dépenses de santé sont plus favorables aux pauvres au Brésil, au Chili, en Colombie et en Afrique du Sud, globalement neutres en termes absolus et favorables aux pauvres en Indonésie et au Pérou.
    Keywords: developing countries, social spending, inequality
    JEL: D31 H22 I3
    Date: 2015–10–26
    URL: http://d.repec.org/n?u=RePEc:oec:elsaab:171-en&r=lam
  3. By: Alexandre Porsse; Felipe Madruga
    Abstract: Since the 2009 financial crisis, some national governments have adopted anticyclical tax policies for recovering and economic growth. These policies can be different in terms of what type of tax incentive policy (income, labor, value added) is chosen as well if the strategy is vertical, benefiting some sectors, or horizontal, benefiting all economic sectors. In Brazil, one of the anticyclical tax policy carried out by the federal government was to reduce the value added tax named ?Imposto sobre Produtos Industrializados? (IPI) using a vertical strategy mainly benefiting the automobile sector among few others. Taking into account this recent experience, this paper aims primary to assess the efficacy of vertical versus horizontal tax incentive policies for promoting economic recovering. Additionally, the paper addresses the distributive effects of these policy strategies considering the impact on the income classes as well on the regional public finances. Considering the price effects of tax policies, the computable general equilibrium approach is the most appropriated methodological framework to achieve the objectives of this paper. We calibrated a CGE model for the Brazilian economy for 2007, recognizing the productive structure for 56 sectors and 8 types of labor segmented by income classes. This model is integrated with a public finance module specifying the government accounts for each level of government (federal, states and municipalities) as well the vertical fiscal linkages. The CGE model allow short run and long run simulations. The CGE model was used for simulating two shock scenarios. The first one represents the vertical tax policy and simulate a reduction in the IPI tax rate of the automobile sector in accordance with the average incentives over the period 2010-2013. The second one represents the horizontal tax policy and the simulation imply reductions in the IPI tax rate of all sector keeping the amount of tax revenue reduction equal to the vertical shock. These shocks were simulated for a short run closure considering the transitory nature of anticyclical policies. The simulation results show that the economic impact of vertical and horizontal tax incentives strategies are quite similar. The policy implication is that both strategies are indifferent in terms of the impact on GDP and employment. Nevertheless, the distributive impact evaluated through the effects on labor factor by income classes shows the vertical policy is more regressive than the horizontal policy. Considering the impact on the regional public finance, both policies imply reductions in the level of transfers to the regional governments due the vertical fiscal linkages of the Brazilian federalism. Despite the positive economic impact on GDP and employment, the magnitude of this effect is not so high and fiscal linkages among governments seems play an important role at least for the Brazilian economy.
    Keywords: tax incentives; economic and distributive impacts; CGE model
    JEL: H23 H25 H30
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p839&r=lam
  4. By: Raul Silveira Neto; Klebson Moura
    Abstract: Empirical evidence about the influence of exposure to public spaces on victimization strongly support the routine activities theory but, maybe reflecting the difficult of available data, specific evidence about the influence of the commuting on probability of victimization is not abundant. As registered by United Nation Office on Drugs and Crimes (UNODOC, 2012), Brazil is one of the most violent country of the world, with homicide rates around 27.1 (homicides per one hundred thousand people) in 2011, the third highest rate among Latin America countries (behind of only Colombia and Venezuela). This situation, in fact, reflect a general situation of high violence related to other kinds of crime in the country; as related to the violence associated to robbery, for example, the numbers of UNDOC (2012) for 2010 put Brazil, with rates (occurrences per one hundred thousand) of robbery and of theft among the three most violent Latin American Countries. But the problem of urban violence is neither the only substantive urban problem of Brazilian big urban centers, nor it is dissociated to other urban problems in these centers. Besides the risk of being victim of urban violence, visitors or inhabitants of Brazilian metropolitan regions must face with the problem of low mobility in these cities. The very bad quality of public transport together with public indirect subsidies for using individual transport make short distance locomotion a very high time demand action (IPEA, 2013). According to the more recent information of PNAD (PNAD 2012), the average commuting time for the inhabitant of Brazilian metropolitan regions was around 40.8 minutes in 2012, a very high number if compared to metropolitan regions around the world (Pereira and Schwanen, 2013; Silveira Neto et al. 2014). In this paper, we analyze this relationship using a large nationally representative cross-section sample of Brazilian individuals for 2009 using more traditional multivariate regressions and propensity score matching techniques to create counterfactuals. We also perform robustness checks, by applying different estimators (Abadie and Imbens, 2002), and implement a simulation-based sensitivity analysis that supports a causal interpretation of the results (Ichino wt al. 2008). We find that individuals with more than one hour of commuting have an overall 2.1% increase in the probability of being victim of robbery, with no robust impact on theft. Also, following the exposure literature we find larger effect on the probability of robbery victimization on women when compared with men, 2.5% and 2.2% respectively.
    Keywords: commuting; urban violence; treatment effect
    JEL: C21 K49
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p757&r=lam
  5. By: Denise Imori; Joaquim Guilhoto
    Abstract: The current Brazilian position on climate change has been formalized with the law of National Climate Change Policy (PNMC, in Portuguese), established in December 2009, which provides a legal framework for national actions aimed at mitigation and adaptation. Within PNMC, the country has defined its national voluntary reduction targets for greenhouse gases emissions, with reductions between 36.1% and 38.9% of projected emissions by 2020. The distribution of the corresponding mitigation efforts by regions is of great concern in a large country like Brazil, with substantial regional variation in economic development, physical geography, production system, and energy consumption. In fact, most of Brazilian states have established public policies on climate change. Out of the 27 states, three have mandatory targets for reducing greenhouse gas emissions: São Paulo and Rio de Janeiro, in the most developed Southeast region; Mato Grosso do Sul, in the Central-West region; as well as Paraíba, in the Northeast region. In this context, questions raised in the literature on global climate change, such as the environmental responsibility for emissions embodied in trade, also apply at the regional level, and perhaps even to a larger extent. In order to analyze at regional level the current relationship between Brazil?s CO2 emissions and domestic and global value chains, in this study we adopt a new framework that combines a world input-output table (WIOT) with an inter-regional input-output table (IRIOT). In our approach, we have chosen not to take one of the datasets (say the WIOT) as a starting point and adapt the other dataset (i.e. the IRIOT) accordingly, instead we construct input coefficients for which both datasets are used. For the empirical application, we use the WIOT for 2008 that was constructed in the World Input-Output Database (WIOD) project. It is a full inter-country input-output table covering 40 countries and the rest of the world as a 41st country. Our IRIOT for 2008 covers the 27 Brazilian states. Both the WIOT and the IRIOT were aggregated to 28 compatible industries. Also, a new database is compiled on Brazilian states? energy use (by fuel) and related CO2 emissions at sectoral level, based on states? official energy balances and estimates of national greenhouses gases emissions for 2008 from Brazil?s Ministry of Science and Technology. We are able to evaluate the CO2 emissions in each of the 27 Brazilian states, considering their respective intra-regional productive structure, energy use, as well as their trade with other states or foreign countries. In this way, our results reveal how CO2 emissions are produced in Brazilian regions by means of domestic and global value chains.
    Keywords: CO2 emissions; input-output analysis; Brazil; global value chains
    JEL: Q56 C67 R15
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p527&r=lam
  6. By: Denise Imori; Joaquim Jose Martins Guilhoto
    Abstract: The current Brazilian position on climate change has been formalized with the law of National Climate Change Policy, which provides a legal framework for national actions aimed at mitigation and adaptation. Within PNMC, the country has defined its national voluntary reduction targets for greenhouse gases emissions, with reductions between 36.1% and 38.9% of projected emissions by 2020. The distribution of the corresponding mitigation efforts by regions is of great concern in a large country like Brazil. In fact, most of Brazilian states have established public policies on climate change. In this context, questions raised in the literature on global climate change, such as the environmental responsibility for emissions embodied in trade, also apply at the regional level, and perhaps even to a larger extent. In order to analyze at regional level the current relationship between Brazil’s CO2 emissions and domestic and global value chains, in this study we adopt a new framework that combines a world input-output table with an inter-regional input-output table. Also, a new database is compiled on Brazilian states’ energy use (by fuel) and related CO2 emissions at sectoral level, based on states’ official energy balances. We are able to evaluate the CO2 emissions in each of the 27 Brazilian states, considering their respective productive structure, energy use, as well as their trade with other states or foreign countries. We find that, in 2008, emissions from the production of inter-regionally traded goods and services corresponded to 36% of Brazilian CO2 emissions. There is great variation among states concerning their emissions intensities and carbon content of their trade relationships with their states and foreign countries.
    Keywords: CO2 emissions; input-output analysis; global value chains
    JEL: Q56 C67 R15
    Date: 2015–10–17
    URL: http://d.repec.org/n?u=RePEc:spa:wpaper:2015wpecon33&r=lam
  7. By: Mauricio Serra; Louise Kempton; Paul Vallance; Ana Paula Bastos; Cassio Rolim
    Abstract: By looking at the official data, it is impossible not to notice that Brazil has undergone profound social and economic transformation. In fact, Brazil's GDP grew approximately 157 times since the early twentieth century to the present day, being this economic performance responsible for placing the country as an important player in South America and in the world as well. This deep transformation also affected the Brazilian higher education system, which has experienced considerable changes over the last decades, most of them driven by two interrelated factors: (a) an intense process of globalization that offers new opportunities as well as imposes new demands for universities; and (b) the perception ? largely influenced by the vast literature on Regional Innovation Systems - that regions are important actors in the development process insofar as they can meet their own and national development goals by supporting innovation, contributing to an increase in productivity as well as in living standards. Despite its successful economic trajectory, Brazil continues to be a highly unequal country in social and economic terms. This inequality can be seen not only within the regions, but principally among them. In this sense, the North region is the poorest Brazilian region, whose share of Brazil?s GDP is very low (only 5.4% in 2013) and whose social indicators are far below the national average. However, it is worth noting that this region has a tremendous potential insofar as it is the country's largest region (it covers roughly 60% of the national territory, comprising Amazonia with its extraordinary biodiversity and natural wealth), its growth rates has been higher than the national average over the last three decades, and has important universities and research institutions. On the other hand, the Southeast is the country?s richest and most dynamic region, its share of Brazil?s GDP is very high (55.4% in 2013), its social indicators are far above the Brazilian average, and its universities are among the highest quality in Brazil and South America as well. This paper focuses on two contrasting Brazilian regions, not only in social and economic terms, but also in terms of innovation and entrepreneurship: the state of Para in the northern region, and the state of São Paulo in the southeastern region. Based on regional innovation system, regional triple helix spaces and entrepreneurial region concepts and also on the recent growing body of literature on the pivotal role of universities in regional development process, this paper can shed light on how universities operate in different contexts within a peripheral country, what kind of interaction they have with the regional actors, to what extent the surrounding environment influences their performance, and what has been their role in the developmental trajectory of their regions.
    Keywords: regional imbalance; higher education institutions; Brazil
    JEL: R1
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p996&r=lam
  8. By: Tiago Freire
    Abstract: There is a long-held belief that inequality is a major determinant of violent crime, particularly homicides. Some previous studies suggest that these results hold in the short term only. This could result from measurement error in income inequality. This study addresses the issue of measurement error in inequality by using the relationship between migration and inequality. Using rainfall shocks and changes in transport costs as exogenous sources of out-migration from rural areas in Brazil between 1980 and 2000, the study shows how migration from rural areas affects income inequality in urban areas. It finds that not only is there a negative and statistically significant relationship between inequality and crime in Brazil, and that the effects are much larger than previously thought, but also that this relationship holds in the long term.
    Keywords: Crime; Inequality; Rural?Urban Migration; Brazil
    JEL: J61 J15 K42 R10
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p658&r=lam
  9. By: Laumar Neves de Souza; Helcio de Medeiros Junior; Tatiana de Andrade Spinola
    Abstract: The positive dynamics of the national economy in relation to the generation of jobs formal has been an issue that has generated a great deal of interest in Brazilian society and, consequently, has gained much space in more different vehicles of communication, in the course of the last decade. The challenge in this work is to describe some specific traits of the formal labor market, in the period covering the years 2001 to 2010, prioritizing a form of analysis that assesses the singularities of employment developments with record book signed in the Territories of Bahian Identity. In fact, we tried to build a kind of profile of formal employment in the state, evaluating its evolution over time, identifying especially who is the worker who has entered this market in previous decade, which the level of salary offered, the level of education required, which the sectors that generated jobs and the territories of state identity that most benefited from with new jobs. In spatial terms, a large part of the quota of jobs generated occurred in a small number of municipalities, because according to the information obtained only 27 of a total of 417 cities of Bahia gathered 62.6% of jobs, and the Territories of Identity responsible for 60.2% of the jobs were the Metropolitana de Salvador and the Portal do Sertão, in which the municipalities of Salvador and Feira de Santana, the two largest cities of Bahia, stand out. The existence of a set of investments implemented in Bahia that resulted in an increase in the demand of work did not reach the majority of the territories. The excessive concentration of jobs generated reflects the great inequality of opportunities of employment the worker baiano in relations of higher quality. In general, the largest volume of freshmen in jobs had 18 to 24 years, high school education, realizing wages between 0.51 and 1.5 minimum wage and in companies located in the Identity Territory Metropolitana de Salvador. The workers who disagreed with these parameters, is the personal attributes, residence or expected return (salary range), are only eligible to precarious relations, taking the informality their port of entry into the labor market. For this reason, in according with census data, in 2010 there were more than half of labor relations characterized as informal in Bahia. Therefore, if there is to be an agenda of State that intends to reduce regional inequality and personal opportunities of worker baiano, a proposal which identifies itself with the assumptions of the Decent Work Agenda for the Bahia, this research provides evidence to policymakers a look less cyclical and more structural.
    Keywords: economy baiana; formal employment; labor market; territories of identity
    JEL: J23 J31 J38
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p1254&r=lam
  10. By: Antonio Bliska Jr.; Flavia Maria de Mello Bliska; Ricardo Firetti; Patricia Helena Nogueira Turco; Fabio Ricardo Ferreira Correa; Felipe Augusto Batoni de Souza; Paulo Ademar Martins Leal
    Abstract: The farmers spend much of their time with technical issues and routine tasks related to the production process. The administrative aspects of rural activities are usually relegated to a second plane. Thus, planning, information and knowledge acquisition, and development of strategies for relations with customers, society and collaborators ? employees or family members ? are harmed, which can compromise the activity. Empower the rural entrepreneurs to assimilate and apply concepts of competitiveness, quality and management, replacing the simple profit idea, is a challenge. The concern for quality management has grown continuously among companies from different economic sectors since the 1950s. For agricultural organizations, to create internal management mechanisms is also very important, from the improvement of agricultural processes to the placement of the product on market. This study analyzes the relationship between the management level of Brazilian farms with land structure, with production system,number of workers on the farm, county, producing region and with certification or not of production. To assess the management level in agricultural organizations ? farms ? we used the Method of Identification of Management Degree, MIGG, for coffee segments, cut flowers and horticulture, including hydroponic production in Brazil. The MIGG can contribute, in an organized manner, for making decisions as to structural changes, and to obtain superior quality products. The results obtained from questionnaires applied from 2010 to 2014 support the view that, despite the technical expertise in cultivation, the agricultural business management is still primitive and intuitive in most cases. In organizations with lower management degree, it was observed that the decision-making are not based on methods that enable a systematic reproduction of processes. In organizations where we have identified high levels of management, it was noted that management practices were integrated into modern farming practices, regardless of company size. In the coffee sector, with larger sample, we observed that in the West region of Bahia state, and in Cerrado region of Minas Gerais state, the management degrees are high and the production processes ? based on intensive use of modern technology ? are quite homogeneous and accompanied by very high yield and quality, compared to other coffee regions. Such practices have contributed to the increase of competitiveness of these organizations and to the development of those regions.
    Keywords: management; rural entrepreneur; sustainability; quality; competitiveness
    JEL: Q1 Q12 Q16
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p236&r=lam
  11. By: Grace Carolina Guevara Rosero; Stephane Riou; Corinne Autant-Bernard
    Abstract: The spatial agglomeration of economic activities play a crucial role on productivity but the composition of such an agglomeration is what really matters. There exists an ongoing debate between the predominance of the effects of agglomeration from specialization and diversity. This paper aims to estimate the impact of the type of externalities on the local sectoral productivity in Ecuador, a country of Latin American region for which literature gives little attention. When measuring agglomeration economies, one concern is the endogeneity issue. In this purpose, the instrumental variables method is implemented. We provide estimations using GMM model and we instrument the endogenous variable with a menace index, long lagged population density and spatial lags. Last, we investigate the specific role of urbanization. The intuition is that a critical level of urbanization is required to produce positive externalities as it guarantees the existence of a minimum level of transport and telecommunication infrastructures, of banking and financial services or other specific services. It is also a manner to capture the great heterogeneity of Ecuadorian cantons in terms of urbanization. Our empirical work is mainly based on the Economic Census of Ecuador 2010 which accounts for information declared in 2009. By aggregating the firm data, we build a two-digits industry database at the cantonal level. Precisely, our estimations are based on 86 industries and 221 cantons. From a first polled estimation on 7988 canton and industry pairs, our results suggest the existence of strong positive externalities from diversity impacting on the local productivity of industries and a lower impact of specialization. We also find economies of density, measured by the density of firms at the canton and industry levels that positively influence the local productivity of industries. Competition of firms has a significant negative effect. Moreover, we conduct regressions by distinguishing the manufacturing from the service industry. The magnitude of the externalities from diversity is positive and significant in manufacturing but much higher in the service industry. Interestingly, our regressions exhibit the non-monotonous effect of urbanization on the various externalities that impact on the local productivity. Precisely, the positive externalities arising from diversity are growing with the level of urbanization of cantons. Last, economies of density occur until a urbanization rate of 61%. Above this threshold, the economies of density cease to be positive suggesting that they are overcompensated by congestion effects. However, the effects of diversity and competition does remain highly positive, we therefore do not consider that the threshold of 68% represents excessive agglomeration.
    Keywords: agglomeration externalities; urbanization; Latin America; industry studies
    JEL: O54 L80 O18 L60
    Date: 2015–10
    URL: http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa15p689&r=lam

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