Local Productivity Spillovers
Nathaniel Baum-Snow, Nicolas Gendron-Carrier, Ronni Pavan
American Economic Review · 2024 · Volume 114 · Issue 4
Abstract
Using Canadian administrative data, this paper presents evidence of revenue and productivity spillovers across firms at fine spatial scales. Accounting for the endogenous sorting of firms across space, we estimate an average elasticity of firm revenue and productivity with respect to the average quality of other firms within 75 meters of 0.024. We find scant evidence that the average firm benefits from being surrounded by a greater amount of economic activity at this spatial scale. Sorting of higher-quality firms into more productive locations and higher average and aggregate quality peer groups is salient in the data.
Keywords
Firm Behavior: Empirical Analysis, Production, Cost, Capital, Total Factor, and Multifactor Productivity, Capacity, Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill, Firm Performance: Size, Diversification, and Scope, Regional Economic Activity: Growth, Development, Environmental Issues, and Changes, Other Spatial Production and Pricing Analysis
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