On the Estimation of Cross-Firm Productivity Spillovers with an Application to FDI

Emir Malikov and Shunan Zhao

No 316529, 2023 Allied Social Sciences Association (ASSA) Annual Meeting, January 6-8, 2023, New Orleans, Louisiana from Agricultural and Applied Economics Association

Abstract: We develop a novel methodology for the proxy variable identification of firm productivity in the presence of productivity-modifying learning and spillovers which facilitates a unified "internally consistent" analysis of the spillover effects between firms. Contrary to the popular two-step empirical approach, ours does not postulate contradictory assumptions about firm productivity across the estimation steps. Instead, we explicitly accommodate crosssectional dependence in productivity induced by spillovers which facilitates identification of both the productivity and spillover effects therein simultaneously. We apply our model to study cross-firmspillovers in China’s electric machinery manufacturing, with a particular focus on productivity effects of inbound FDI.

Keywords: Production Economics; Productivity Analysis (search for similar items in EconPapers)
Pages: 71
Date: 2022-01
New Economics Papers: this item is included in nep-bec, nep-cse and nep-eff
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https://ageconsearch.umn.edu/record/316529/files/Malikov_Lopez_AAEA-2022.pdf (application/pdf)

Related works:
Working Paper: On the Estimation of Cross-Firm Productivity Spillovers with an Application to FDI (2023)
Working Paper: On the Estimation of Cross-Firm Productivity Spillovers with an Application to FDI (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:assa23:316529

DOI: 10.22004/ag.econ.316529

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