Mukim, Megha2013-11-122013-11-122013-09-26https://hdl.handle.net/10986/16241A large and growing informal sector is a major feature of developing countries. This paper analyzes coagglomeration patterns between formal and informal manufacturing enterprises in India. It studies (a) the causes underlying these patterns and (b) the positive externalities, if any, on the entry of new firms. The analysis finds that buyer-supplier and technology linkages explain much of formal-informal coagglomeration. Also, within-industry coagglomeration matters mostly to small- and medium-sized formal firm births. Traditional measures of agglomeration remain important in explaining new industrial activity, whether in the formal or the informal sector.enCC BY 3.0 IGOUrban developmentbusiness environmentCompetitive Advantagecompetitive advantageinformal sectorDevelopment Economicsdirect salesdirect saleseconomic reviewEconomic Reviewemployment shareentrepreneurial activityentrepreneursentrepreneurshipfirm entryfirm sizefixed effectsforeign investorsformal sectorformal sector employmentformal sectorsindustry concentrationinformal sectorinformal activityinformal enterprisesinformal firmsinformal sectorinformal sector employmentinformal activityInformal activityinformal enterprisesinformal firminformal sectorinformal sector employmentinformal sector activityinformal sectorslabor marketlabor marketslocal businesslocal businessmanufacturing enterprisesmarket accessmedium enterprisespolicy researchpolitical economyPolitical Economypublic goodspublic sectorscale enterprisesscale enterprisessmall and medium enterprisesSmall enterprisessmall firmsSMEsocial securitytrade liberalizationtransition economiesvillage industriesWorld Bank10.1596/1813-9450-6622