Publication: Competition and Demographics in Large Indian Cities
Loading...
Files in English
338 downloads
Date
2011-08-05
ISSN
0022-0388
Published
2011-08-05
Author(s)
Editor(s)
Abstract
Recent studies suggest that consumer-household attributes may be as important in determining the level of competition in certain markets as firm characteristics and the number of firms. However, evidence on which consumer-household attributes matter for competition is limited, especially for developing countries. Focusing on India's retail sector, this article contributes to this literature by showing that the number of adult non-workers per household in the city, a proxy for shopping time opportunity cost, has a strong effect on competition between retailers. Policy implications of our findings in light of the ongoing dramatic reductions in non-workers in India are discussed.
Link to Data Set
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Competition and Demographics(World Bank, Washington, DC, 2008-02)Mainstream economics views demographic changes in the structure of households as of little relevance for the behavior of firms or the functioning of markets. The present paper dispels this view by arguing that changes in the number of non-workers could affect the intensity with which consumers search for best prices and therefore the level of competition. The author also analyzes the relationship between income and competition, which some studies suggest is negative. The author argues that the negative relationship is most likely due to the demographic factors discussed.Publication Does Competition from Informal Firms Hurt Job Creation by Formal Firms? Evidence Using Firm-Level Survey Data(World Bank, Washington, DC, 2021-01)The informal sector is an important source of livelihoods and jobs for a vast majority of people in developing countries. However, there is concern that the informal sector may undermine job creation in the formal sector. According to the “parasite” view of informality, informal firms can compete against formal firms, and often "unfairly" so as they do not have to comply with costly regulations and pay taxes. This "unfair" advantage makes it difficult for formal firms to compete against informal firms, implying a significant loss of formal sector jobs. Using firm-level survey data for manufacturing small and medium-size enterprises in 109 mostly developing countries, this study estimates the impact of competition from informal firms on the growth rate of employment among formal sector small and medium-size enterprises. The results show that the growth rate of employment declines significantly as competition from informal firms rises. According to the baseline specification, for each one standard deviation increase in informal competition, the employment growth rate declines by 1 percentage point. Consistent with the parasite view of informality, the negative impact on job growth is much larger when the business environment is less conducive to operating formally versus informally due to factors such high corruption, weak rule of law, more burdensome regulations, and high profit tax rate. Several checks are provided against endogeneity concerns.Publication Does Competition from Informal Firms Impact R&D by Formal SMEs? Evidence Using Firm-Level Survey Data(World Bank, Washington, DC, 2021-11)The informal sector is an important source of livelihoods and jobs for a vast majority of people in developing countries. However, there is concern that it may undermine growth and development of the formal sector. For instance, the growth literature indicates that research and development activity and innovation are a key driver of long-term growth. How does the competition that formal sector firms face from informal sector firms affect research and development activity by the formal firms The present paper attempts to answer this question using firm-level survey data for small and medium-size enterprises in a large cross-section of mostly developing countries. The results show that higher informal competition leads to greater a likelihood of spending on research and development by formal firms. For the most conservative baseline specification, a one standard deviation increase in informal competition leads to an increase of 5.2 percentage points in the likelihood of spending on research and development by formal firms. This is a large increase given that less than 18 percent of the firms in the sample engage in research and development activity. Further, consistent with the “parasite” view of informality, the positive impact of informal competition on research and development activity is magnified when the business environment is less conducive to operating in the formal sector compared with informal sector due to factors such as higher corruption, weaker rule of law, more burdensome business regulations, and a higher tax rate on profits. As expected, there is no impact of informal competition on research and development activity among large firms. The main findings are robust to several controls, alternative specifications, and endogeneity checks.Publication Does Competition from Informal Firms Encourage the Formal Firms to Obtain Quality Certificates?(Washington, DC: World Bank, 2025-01-09)This study investigates the impact of competition from informal or unregistered firms on the likelihood of formal manufacturing small and medium-size enterprises obtaining internationally recognized quality certificates. The sample includes 16 countries in Latin America and the Caribbean, one of the regions with the highest levels of informality in the world. The study uncovers a positive impact, with a one standard deviation increase in informal competition leading to an increase in the probability of having a quality certificate by 2.9 to 3.6 percentage points across the different specifications. This effect is large, given that only 10.4 percent of small and medium-size enterprises have a quality certificate. These findings are consistent with the “legalist” model of informality, whereby the positive impact of informal competition on the likelihood of having a quality certificate is significantly larger in countries where the business environment is less favorable to operating in the formal versus informal sector due to factors such as the weaker rule of law and greater regulatory burden on formal firms. The paper provides several layers of checks against omitted variable bias, reverse causality, and measurement errors. The findings also show that, as expected, there is no statistically significant impact of informal competition on the likelihood of having a quality certificate among large manufacturing firms.Publication Human Capital and the Changing Structure of the Indian Economy(World Bank, Washington, DC, 2008-03)Using panel data for the fourteen major states of India over the 1980-2000 period, the authors estimate the effect of human capital endowment on the performance of the state economies. They find that greater availability of skilled workers had a positive and significant impact on output in the service sectors. They do not find any such effect for the manufacturing sectors. The paper shows that the differential effect on services and manufacturing arises because service sectors are more skill intensive.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Guide to the Debt Management Performance Assessment Tool(Washington, DC, 2008-02-05)The purpose of this document is to provide guidance and supplemental information to assist with country assessments of debt management performance, using the Debt Management Performance Assessment (DeMPA) tool. The DeMPA is a methodology used for assessing public debt management performance through a comprehensive set of 15 performance indicators spanning the full range of government Debt Management (DeM) functions. It is based on the principles set out in the International Monetary Fund (IMF) and World Bank guidelines for public debt management, initially published in 2001 and updated in 2003. It is modeled after the Public Expenditure and Financial Accountability (PEFA) framework for performance measurement of public financial management. The DeMPA has been designed to be a user-friendly tool to undertake an assessment of the strengths and weaknesses in government DeM practices. This guide provides additional background and supporting information so that a no specialist in the area of debt management may undertake a country assessment effectively. The guide can be used by assessors in preparing for and undertaking an assessment. It is particularly useful for understanding the rationale for the inclusion of the indicators, the scoring methodology, and the list of supporting documents or evidence required, and the questions that could be asked for the assessment.Publication The Mexican Social Protection System in Health(World Bank, Washington DC, 2013-01)With a population of 113 million and a per-capita Gross Domestic Product, or GDP of US$10,064 (current U.S. dollars), Mexico is one of the largest and highest-income countries in Latin America and the Caribbean (LAC). The country has benefited from sustained economic growth during the last decade, which was temporarily interrupted by the financial and economic crisis. Real GDP is projected to grow 3.8 percent and 3.6 percent in 2012 and 2013, respectively (International Monetary Fund, or IMF 2012). Despite this growth, poverty in the country remains high; with half of the population living below the national poverty line. The country is also highly heterogeneous, with large socioeconomic differences across states and across urban and rural areas. In 2010, while the extreme poverty ratio in the Federal District and the states of Colima and Nuevo Leon was below 3 percent, in Chiapas, Guerrero, and Oaxaca it was 25 percent or higher. These large regional differences are also found in other indicators of well-being, such as years of schooling, housing conditions, and access to social services. This case study assesses key features and achievements of the Social Protection System in Health (Sistema de Proteccion Social en Salud) in Mexico, and particularly of its main pillar, Popular Health Insurance (Seguro Popular, PHI). It analyzes the contribution of this policy to the establishment and implementation of universal health coverage in Mexico. In 2003, with the reform of the General Health Law, the PHI was institutionalized as a subsidized health insurance scheme open to the population not covered by the social security schemes. Today, the PHI covers all of its intended affiliates, about 52 million peoplePublication Crime and Violence in Central America : A Development Challenge - Main Report(World Bank, 2011-01-01)Crime and violence are now a key development issue for Central American countries. In three nations El Salvador, Guatemala, and Honduras crime rates are among the top five in Latin America. This report argues that successful strategies require actions along multiple fronts, combining prevention and criminal justice reform, together with regional approaches in the areas of drug trafficking and firearms. It also argues that interventions should be evidence based, starting with a clear understanding of the risk factors involved and ending with a careful evaluation of how any planned action might affect future options. In addition, the design of national crime reduction plans and the establishment of national cross-sectoral crime commissions are important steps to coordinate the actions of different government branches, ease cross-sectoral collaboration and prioritize resource allocation. Of equal importance is the fact that national plans offer a vehicle for the involvement of civil society organizations, in which much of the expertise in violence prevention and rehabilitation resides. Prevention efforts need to be complemented by effective law enforcement. The required reforms are no longer primarily legislative in nature because all six countries have advanced toward more transparent adversarial criminal procedures. The second-generation reforms should instead help deliver on the promises of previous reforms by: (i) strengthening key institutions and improving the quality and timeliness of the services they provide to citizens; (ii) improving efficiency and effectiveness while respecting due process and human rights; (iii) ensuring accountability and addressing corruption; (iv) increasing inter-agency collaboration; and (v) improving access to justice, especially for poor and disenfranchised groups. Specific interventions reviewed in the report include: information systems and performance indicators as a prerequisite to improve inter-institutional coordination and information sharing mechanisms; an internal overhaul of court administration and case management to create rapid reaction, one-stop shops; the strengthening of entities that provide legal counseling to the poor and to women; and the promotion of alternative dispute-resolution mechanisms and the implementation of community policing programs.