Industry Linkages from Joint Production

Xiang Ding ()
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Xiang Ding: School of Foreign Service, Georgetown University, https://www.xiang-ding.com/

Working Papers from Georgetown University, Department of Economics

Abstract: I develop a theory of joint production to quantify aggregate economies of scope. In US manufacturing data, increased export demand in one industry raises a firm’s sales in its other industries that share knowledge inputs like R&D and software. I estimate that knowledge inputs contribute to economies of scope through their scalability and partial non-rivalry within the firm. On average a 10 percent increase in output in one industry lowers prices in other industries by 0.4 percent. Such economies of scope manifest disproportionately among knowledge-proximate industries and imply large spillover impacts of recent US-China trade policy on producer prices.

Keywords: Joint production; knowledge inputs; non-rivalry; economies of scope; industry linkages (search for similar items in EconPapers)
JEL-codes: F12 F40 L25 (search for similar items in EconPapers)
Pages: 83
Date: 2023-01-23
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