“…In doing so, we contribute to a classic literature that emphasizes the role of access to customers and agglomeration forces as major drivers of firm location choice (Marshall 1920, Ellison et al 2010, Combes and Gobillon 2015and Glaeser and Xiong 2017. A growing body of work has focused on access to demand for small firms in developing countries, highlighting that information frictions are a critical source of inefficiency for buyers and sellers (Lagakos 2016, Jensen and Miller 2018, Startz 2021) and that lack of managerial or marketing ability creates a barrier to accessing new markets (Anderson et al 2018, Hjort et al 2020). As a consequence, small firms tend to sell locally.…”