Propagation and Amplification of Local Productivity Spillovers

Xavier Giroud, Simone Lenzu, Quinn Maingi and Holger Mueller

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This paper shows that local productivity spillovers can propagate throughout the economy through the plant-level networks of multi-region firms. Using confidential Census plant-level data, we find that large manufacturing plant openings not only raise the productivity of local plants but also of distant plants hundreds of miles away, which belong to multi-region firms that are exposed to the local productivity spillover through one of their plants. To quantify the significance of plant-level networks for the propagation and amplification of local productivity shocks, we develop and estimate a quantitative spatial model in which plants of multi-region firms are linked through shared knowledge. Counterfactual exercises show that while knowledge sharing through plant-level networks amplifies the aggregate effects of local productivity shocks, it can widen economic disparities between workers and regions in the economy.

Pages: 70 pages
Date: 2022-08
New Economics Papers: this item is included in nep-eff, nep-geo, nep-net and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www2.census.gov/ces/wp/2022/CES-WP-22-32.pdf First version, 2022 (application/pdf)

Related works:
Working Paper: Propagation and Amplification of Local Productivity Spillovers (2021)
Working Paper: Propagation and Amplification of Local Productivity Spillovers (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:22-32

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