Friday, November 16, 2007

The economics of Bangalore

Niranjan Rajadhyaksha writes on the economics of Bangalore. (via) The article is good from a theory perspective - as to why outsourcing happens - because of transaction costs as proved by Ronald Coase.

But that theory is applicable to the whole of India; indeed Bombay, Delhi and Chennai too - which at the beginning of the offshoring boom where largely better developed than Bangalore. But Bangalore trumped them all and does so even now to a great extent though the three cities (in tandem with Navi Mumbai/Pune, Gurgaon/Noida) are picking up.

Why did that happen?

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