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    Urban Development Excessive Entry of Firms and Wages Inequality in Developing Countries

    Beladi, Hamid; Chao, Chi-Chur; Ee, Mong Shan; Hollas, Daniel | January 2017
    Abstract
    This paper examines the short- and long-term effects of urbanization, via favorable urban development policies, on income distribution and social welfare for a developing country. The urban manufacturing sector is characterized by imperfect competition and free entry. Urbanization shifts rural workers to the highly productive urban sector, while causing production in urban firms to expand because of scale economies. However, urbanization may worsen wage inequality between skilled and unskilled labor in the short term. In the long term, urbanization can attract new firms to the urban sector, and favorable urban development policies may result in excessive entry of firms, which can amplify wage inequality in the economy. This entry-amplifying effect is confirmed empirically, especially for low- and lower-middle-income countries. If the entry effect is not considered, the impact of urbanization on wage inequality could be understated by 18% for low- and lower-middle-income countries.
    Citation
    Beladi, Hamid; Chao, Chi-Chur; Ee, Mong Shan; Hollas, Daniel. 2017. Urban Development Excessive Entry of Firms and Wages Inequality in Developing Countries. © Asian Development Bank Institute. http://hdl.handle.net/11540/8661.
    Keywords
    Risk Financing
    Urban Development Finance
    Trade Finance
    Small Business Finance
    Rural Finance
    Roundtable on International Trade and Finance
    Regional Development Finance
    Public Service Finance
    Public Finance
    Project Finance
    Private Finance
    Nonbank Financing
    Non-Bank Financial Institutions
    Municipal Finance
    Local Government Finance
    Local Currency Financing
    Limited Resource Financing
    International Financial Institutions
    Infrastructure Financing
    Industrial Finance
    Government Financial Institutions
    Government Finance
    Financing of Infrastructure
    Financial Sector Development
    Financial Regulation
    Urbanization
    Urban Services
    Urban Projects
    Urban Problems
    Urban Poverty
    Urban Policy
    Urban Planning
    Urban Infrastructure
    Urban Health
    Urban Government
    Urban Economic Development
    Urban Development Finance
    Urban Development
    Urban Conditions
    Urban Communities
    Urban Population
    Taxation
    Public Accounting
    National Budget
    Municipal Bonds
    Local Government
    Local Taxes
    International Monetary Relations
    International Financial Market
    International Banking
    Central Banks
    Business Financing
    Capital Resources
    Budgetary Policy
    Capital Needs
    Corporate Divestiture
    Capital Instruments
    Pension Funds
    Insurance Companies
    Banks
    Portfolio Management
    Fiscal Administration
    Economics of Education
    Development Banks
    Urban Plans
    Urbanism
    Urban agriculture
    Economic Development
    Rural Urban Migration
    Cities
    Migration
    Use tax
    Taxing power
    State of taxation
    Tax-sales
    Tax revenue estimating
    Tax planning
    Spendings tax
    Special assessments
    Tax administration and procedure
    Sales tax
    Real property and taxation
    Progressive taxation
    Effect of taxation on land use
    Effect of taxation on labor supply
    Intergovernmental tax relations
    Inheritance and transfer tax
    Energy tax
    Local government
    Urban renewal
    Urban housing
    Urban sociology
    Transit systems
    Rapid transit
    Public transit
    Mass transit
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/8661
    Metadata
    Show full item record
    Thumbnail
    adbi-wp653.pdf (1.475Mb)
    Author
    Beladi, Hamid
    Chao, Chi-Chur
    Ee, Mong Shan
    Hollas, Daniel
    Theme
    Finance
    Urban
    Labor Migration

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    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise