Neighboring capital imports and non-importer productivity: Evidence from geocoded manufacturing firms in China

Jiawei Mo and Zhe Zhang

Journal of Urban Economics, 2024, vol. 143, issue C

Abstract: This article examines the spillover effects of neighboring firms’ imports on the productivity of non-importers. By analyzing geocoded manufacturing firms in China, we find that capital goods imports by neighboring firms within 10 km positively impact non-importer productivity; intermediate goods imports show no clear spillover. These results hold when using imports from distant firms as instruments. Spillovers from capital imports mainly come from neighbors in upstream and downstream industries, which indicate potential supply chain effects. Learning effects from neighboring imported products are not significant. Quantitatively, neighboring capital imports raised non-importers’ average productivity by 0.99% from 2000 to 2006, surpassing gains from their own R&D participation by more than sixfold. Overall, our findings demonstrate substantial societal benefits of capital imports for non-importers connected spatially.

Keywords: Productivity; Spatial spillover; Neighboring import; Capital goods; Supply chain (search for similar items in EconPapers)
JEL-codes: F14 O10 R30 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:juecon:v:143:y:2024:i:c:s0094119024000627

DOI: 10.1016/j.jue.2024.103692

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