Munich Personal RePEc Archive

Geography Dictates, But How? Topography, Spatial Concentration and Sectoral Diversification

Chowdhury, Mohammad Tarequl Hasan and Rahman, Muhammad Habibur and Ulubasoglu, Mehmet Ali (2018): Geography Dictates, But How? Topography, Spatial Concentration and Sectoral Diversification.

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Abstract

This study investigates the ways in which terrain ruggedness affects sectoral diversification. A cross-country analysis using data from 142 countries over the period 1970‒2007 documents an inverted U-shaped link between terrain ruggedness and sectoral diversification, which mainly works through the extensive margin of diversification. A within-country analysis based on United States (US) state-level data over the period 1997‒2011 confirms this non-monotonic relationship. The within-country analysis further reveals that an important mechanism through which terrain ruggedness affects sectoral diversification is the spatial concentration of economic activity, as measured by the concentration of satellite-based night lights.

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