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Agglomeration Spillovers and Persistence: New Evidence from Large Plant Openings

Carlianne Patrick and Mark Partridge

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

Abstract: We use confidential Census microdata to compare outcomes for plants in counties that “win” a new plant to plants in similar counties that did not to receive the new plant, providing empirical evidence on the economic theories used to justify local industrial policies. We find little evidence that the average highly incentivized large plant generates significant productivity spillovers. Our semiparametric estimates of the overall local agglomeration function indicate that residual TFP is linear for the range of “agglomeration” densities most frequently observed, suggesting local economic shocks do not push local economies to a new higher equilibrium. Examining changes twenty years after the new plant entrant, we find some evidence of persistent, positive increases in winning county-manufacturing shares that are not driven by establishment births.

Keywords: local economic development; agglomeration externalities; persistence (search for similar items in EconPapers)
JEL-codes: H25 R11 R38 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2022-06
New Economics Papers: this item is included in nep-eff, nep-geo, nep-his and nep-ure
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Downloads: (external link) First version, 2022 (application/pdf)

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