Productivity, Place, and Plants

Benjamin Schoefer and Oren Ziv
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Oren Ziv: Michigan State University

The Review of Economics and Statistics, 2024, vol. 106, issue 5, 1167-1186

Abstract: Why do cities differ so much in productivity? A long literature has sought out systematic sources, such as inherent productivity advantages, market access, agglomeration forces, or sorting. We document that up to three-quarters of the measured regional productivity dispersion is spurious, reflecting the “luck of the draw” of finite counts of idiosyncratically heterogeneous plants that happen to operate in a given location. The patterns are even more pronounced for new plants, hold for alternative productivity measures, and broadly extend to European countries. This large role for individual plants suggests a smaller role for places in driving regional differences.

Date: 2024
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https://doi.org/10.1162/rest_a_01275

Related works:
Working Paper: Productivity, Place, and Plants (2022)
Working Paper: Productivity, Place, and Plants (2021)
Working Paper: Productivity, Place, and Plants (2021)
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