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

Emir Malikov and Shunan Zhao

The Review of Economics and Statistics, 2023, vol. 105, issue 5, 1207-1223

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 among 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 cross-sectional dependence in productivity induced by spillovers, which facilitates identification of both the productivity and spillover effects simultaneously. We apply our model to study cross-firm spillovers in China's electric machinery manufacturing, with a particular focus on productivity effects of inbound FDI.

Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://doi.org/10.1162/rest_a_01080
Access to PDF is restricted to subscribers.

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)
Working Paper: On the Estimation of Cross-Firm Productivity Spillovers with an Application to FDI (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tpr:restat:v:105:y:2023:i:5:p:1207-1223

Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=0034-6535

Access Statistics for this article

The Review of Economics and Statistics is currently edited by Pierre Azoulay, Olivier Coibion, Will Dobbie, Raymond Fisman, Benjamin R. Handel, Brian A. Jacob, Kareen Rozen, Xiaoxia Shi, Tavneet Suri and Yi Xu

More articles in The Review of Economics and Statistics from MIT Press
Bibliographic data for series maintained by The MIT Press ().