Melibaeva, SevaraIimi, AtsushiHumphreys, Richard Martin2015-07-162015-07-162015-06https://hdl.handle.net/10986/22178Agglomeration economies are among the most important factors in increasing firm productivity. However, there is little evidence supportive of this in Africa. Using the firm registry database in Tanzania, this paper examines a new application of the logit approach with two empirical issues taken into account: spatial autocorrelation and endogeneity of infrastructure placement. The paper finds significant agglomeration economies. It is also found that firms are more likely to be located where local connectivity and access to markets are good. The paper finds that dealing with infrastructure endogeneity and spatial autocorrelation in the empirical model is important. According to the exogeneity test, infrastructure variables are likely endogenous. The spatial autoregressive term is significant. As expected, therefore, there are positive externalities of firm location choice around the neighboring areas.en-USCC BY 3.0 IGOBUSINESS ACTIVITIESEMPLOYMENTVEHICLE OPERATING COSTSECONOMIC GROWTHINFRASTRUCTURE SERVICESPRODUCTIONAGGLOMERATION EFFECTMATERIALSCARGO HANDLINGTRANSPORT INFRASTRUCTUREGENERATIONEXPORTSELASTICITYINFRASTRUCTURE DEVELOPMENTPOLITICAL ECONOMYECONOMIC STRUCTUREPUBLIC INFRASTRUCTUREINDUSTRIAL DEVELOPMENTVARIABLESLOCAL CONNECTIVITYHIGHWAY SYSTEMTAXINPUTSREGISTRYLOCAL GOVERNMENT FINANCETRANSPORTATION INFRASTRUCTURETRANSPORT ACCESSDRIVERSCOMPUTEROPEN ACCESSTRANSPORT MODESECONOMIC ACTIVITYCHOICEVEHICLEDATAINFLUENCETRANSPORT INVESTMENTSROADINFRASTRUCTURE ACCESSCARGOCOSTSROAD NETWORKTRANSPORTINTERSTATE HIGHWAY SYSTEMINFRASTRUCTURE PROJECTRENTCUSTOMSRAIL LINECOST OF POWERGROWTH PATHPRODUCTIVITYECONOMETRICSEXTERNALITIESINDUSTRIALIZATIONINCREASING RETURNSCRITERIAMARKETSPRIVATE INVESTMENTELECTRICITY SUPPLYCONNECTIVITYWEBENTERPRISESRAIL STATIONSPORTSNATURAL RESOURCESROUTEECONOMIC RESEARCHRESIDENTIAL USERSINFRASTRUCTUREINFRASTRUCTURE INVESTMENTMANUFACTURINGUSERSTECHNOLOGYECONOMIC ZONESTRANSACTIONVALUE ADDEDFIRMSTRANSPORTATIONMARKET POTENTIALWAGESGLOBAL MARKETPOLICIESRESULTSMARKET CONDITIONSNESTED LOGIT MODELVALUECOMPETITIVENESSPOWERFOREIGN DIRECT INVESTMENTELECTRICITYELASTICITIESCREDITPRODUCT DIFFERENTIATIONACCESSIBILITYMARKET ACCESSIBILITYAGRICULTUREINFRASTRUCTURE DEVELOPMENTSMEASUREMENTTRANSACTION COSTSRAILWAYHIGHWAYSGOOD TRANSPORTENDOGENOUS VARIABLESDIVERSIFICATIONTAX REVENUEROADSADMINISTRATIONINFRASTRUCTURE INVESTMENTSRESULTTAXATIONHIGHWAYTRADERAILWAYSINTERSTATE HIGHWAYSTHEORYBUSINESSESBUSINESSINVESTMENTNETWORKAGGLOMERATION ECONOMIESPOSITIVE EXTERNALITIESRAILROADSAUTOREGRESSIONPERFORMANCERAILPOLICY SUPPORTPROFITINVESTMENTSCOMMODITIESROAD CONDITIONSECONOMIC GEOGRAPHYDATABASETRANSPORT COSTSVEHICLE OPERATINGCOMMODITYINTERNATIONAL MARKETSAGGLOMERATIONPRICESAGGLOMERATION EFFECTSDEVELOPMENT POLICYHISTORIC CITIESWorking PaperWorld Bank10.1596/1813-9450-7305