Intra‐Metropolitan Agglomeration of Formal and Informal Manufacturing Activity: Evidence from Cali, Colombia

Abstract

Abstract This paper compares the agglomeration patterns of formal versus informal manufacturing activity within a metropolitan area of an emergent economy. We use census manufacturing enterprise‐level data for the metropolitan area of Cali for 2005 to calculate the degree of spatial agglomeration and co‐agglomeration by means of M‐functions. We also conduct spatial analysis on the distribution of formal and informal enterprises by means of kernel density mapping of selected industries. We find that although for the industrial sector as a whole informal enterprises display higher agglomeration intensity than formal enterprises of similar size, this is not the case for each individual industry. We also find that significant agglomeration of both formal and informal enterprises of similar size in the same industry does not necessarily imply that they agglomerate in the same areas of the city.