The new economic geography and regional growth in Brazil and India
This dissertation tries to contribute to empirically assess hypotheses of the "New Economic Geography". Specifically, we tested the relevance of the combination of lower transportation cost with the role of economies of scale in explaining the regional distribution of total activity and of industrial activity. Economies of scale are assumed to be due to "backward and forward" linkages among firms. We also took into account congestion effects and asymmetry among regions. The model was tested for the regions of Brazil, in the period 1950-1995 and 1970-1995, and for the regions of India, in the period 1961-1991. Using panel results, we observed that transportation costs were generating concentration of total activity in the periods 1950-1995 arid 1950- 1970. For these samples, there is evidence that economies of scales were a cause of concentration of total activity. Other forces, not explained by the model, were generating dispersion and so were congestion effects. For the period 1970-1995, we found that congestion effects and lower transportation cost were helping to disperse economic activity, in the panel results. Economies of scale were not, contrary to the model's predictions, helping economic growth. In the case of Brazil, for the 18-state samples, industrial activity tended to concentrated due to the effects of lower transportation cost, although higher industrial growth rates were a characteristic of the states with less economies of scales. In the case of India, strong concentration effects were taking place, both due to lower transportation cost and due to other reasons. Economies of scale were not important in the explanation of the path of India activity.